2013 Arizona Tax Lien Certificates Auctions

2013 Arizona Tax Lien Certificates Auctions

The 2012 Arizona tax lien certificate auctions are just around the corner!  You should start preparing now.  In fact, the Maricopa tax lien list is already out.  The Maricopa tax lien auction is the largest in the state and one of the largest in the US (it comprises of Pheonix and the surrounding area).

See below for a list of Arizona tax lien auction dates and links to the Arizona Tax Lien Sale Websites

I’ve added a schedule of each Arizona tax lien certificate auction (in Arizona, they call tax liens Certificates of Purchase).  Most of the larger counties sell their tax liens online.  However, the Pima County Tax Auction is a live auction (Tucson).  
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The ONLY Five States Where You Should Buy Tax Lien Certificates

The ONLY Five States Where You Should Buy Tax Lien Certificates

I get the questions all the time…what are the best states to buy tax lien certificates in?  Like all real estate investments, the natural answer to this is to only buy delinquent tax certificates in areas that you know best—your local market or areas you have other real estate investments in.  However, the explosion of online auctions and wealth of due diligence information on the web has now given us the ability to invest in just about any state that sells tax liens.  I’m not limiting my buying to just Arizona and Colorado which are near me, I now can buy anywhere in the nation.

So, now, there is competition among states for investors—what separates them are their statutes governing tax lien investing (do they favor the investor or the taxpayer?) and the ease of buying the liens (are the auctions online and is the assessor’s information up-to-date?).  Feel free to post your comments and reasons why you think I’m wrong, but below are the only states I feel you need to invest in.

Florida Tax Lien Certificates

Florida tax lien certificates should be at the top of everyone’s list for many reasons: the ease of buying liens at the online auctions, the laws and processing of tax payments are very investor friendly and the online information from assessment data to tax data is very current and accurate compared to other states.  Florida sets the bar for all the other states that sell their property taxes and will set the trend going in the future.  The main downside that there is a lot of competition out there the bring rates down quite a bit—but with Florida being the largest tax lien certificate market out there, you can usually find a niche to buy at higher rates. You can also find out more about Florida tax lien certificates in my Kindle e-book called: A Beginner’s Guide to Investing in Florida Tax Lien Certificates.

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Arizona Tax Lien Auction – Prepare Now to Make February Profitable

Arizona Tax Lien Auction – Prepare Now to Make February Profitable

Buying tax liens in Arizona is a relatively easy and profitable investment opportunity.  Since most of larger counties’ auctions are held online, you can invest in these liens from anywhere.  The initial bid rate of 16% is very good; however, there is a lot of competition, so most returns fall below 10%.  The auctions are held in February, so get ready to start your due diligence now to prepare.        

Arizona Property Taxes

 Arizona property taxes are paid in arrears.  So, property owners pay the first half of their annual taxes in the Fall and the second half the following Spring.  The second half taxes become delinquent after May 1st and by December, the county treasurers have compiled their list of delinquent taxes to auction in February. 


Delinquent Tax Auction 

            The smaller counties in Arizona still perform open outcry auctions where you or your representative will have to show up to the county on auction day to participate.  However, more and more of these counties are going to online bidding including the counties of Maricopa (Phoenix) and Pima (Tucson).  You can find these online auctions via the major auctioneers—Grant Street, Real Auction or Bid4Assets.  You can go to either of these sites for a demo of how the process works.

             The bidding starts at 16% and works its way down in 1% increments until a winner is awarded the lien.  If there is a tie, then the computer (online auctions) awards the bid randomly those at the lowest rate.  This creates a bit of an unfair advantage to the larger investment funds who often register hundreds of entities to bid.  This is completely legal and forces the individual buyer to either accept a low rate – 5-6% or bid on lower quality properties. For those that subscribe to the newsletter, we’ll go into different strategies to beat these large, corporate investment funds.

 Tax Lien Foreclosure 

           Arizona has a three-year maturity period in which the property owner may redeem.  This is great if you purchase the lien at a high rate but a very long time to hold if you are looking to foreclose on the property.  After three years, the tax lien purchaser may begin foreclosure.  There is a mandatory 30 day notice of intent to foreclose which must be given to all parties on title.  This notice is good for 180 days; but if a foreclosure suit is not filed within this period, another 30 day notice must be sent.  The foreclosure action is handled as a civil matter in the court and results in a Treasurer’s Deed being awarded to the tax lien investor which extinguishes the right of redemption of all interest holders.  This deed can then be recorded and the property is now owned by the tax lien holder.

All in all, tax lien investing in Arizona is great for those looking for a relative simple process and for those who are just looking for yield.  Since the redemption period is long and the tax amounts relatively low, most of the tax liens redeem and it is a rare case where one would actually take title to a decent property.  Bidding begins at the end of February so begin your due diligence at the start of the year.