May 18, 2009

"I bought a certificate of purchase at the tax lien auction. I understand that gives me a right to pay subsequent delinquent taxes on the same parcel and add those amounts to the certificate of purchase. Why should I?"

On or after June 1, existing certificate of purchase holders have the first right to add the next delinquent year's taxes on the parcel to their certificate. The additional tax amounts will bear interest at the original bid rate on the CP. There are several considerations to keep in mind when deciding whether or not to pay subsequent delinquent taxes on a certificate of purchase. The decision can impact both the likelihood of CP redemption and successful foreclosure.

February 9, 2009

"I bought tax liens several years ago that have not been redeemed and I don’t want to deal with foreclosure on them. What else can I do?"

Arizona tax liens are now subject to statutes of limitations so that if you do nothing, they will eventually expire and you will be able to write them off as a tax loss. Assuming you would like to receive some value for them, if not have them be redeemed, you could sell the tax lien to a willing buyer for whatever price you can negotiate. That price may simply be the redemption value of the tax lien, which you can obtain from the County Treasurer’s office, or a greater or lesser amount based on other variables such as the quality of the property and unique facts known about the owner or the likelihood of foreclosure.

February 1, 2009

"I bought a tax lien at the auction in February and it was redeemed right away, before the end of February. My refund check was less than what I paid in the first place. I thought I was supposed to make money with this investment. What happened?"

Your negative return on investment was likely caused by two factors - an unreimbursed transaction cost, and no interest earned in the sale month.

$47.5 million in delinquent bills set for investors

by J. Craig Anderson - Jan. 22, 2009 12:00 AM
Arizona Business Gazette

Maricopa County is gearing up for its largest sale of delinquent property tax liens on record, an estimated $47.5 million worth of unpaid taxes available for purchase by investors.

Bidding on property tax liens occupies a relatively obscure niche in the arena of real estate investment, but experts say investors who know what they're doing can achieve a fairly reliable rate of return with interest as high as 16 percent.

"It's a pretty small universe of people that actually get into it," said Mark Manoil, a Phoenix lawyer who specializes in property tax issues and has written a book about tax lien investing.

Read More