Getting Started In Arizonia Buying Tax Liens
Hey, I've been studying alot about tax liens and i am about to take the next step. I have researched and picked a few counties and I want to go AZ in feb to the auction. I plan on going a few days earlier to look at the properties before I bid. I am primarialy trying to get some income of it and maybe even foreclose if I am lucky on a home. My question to the experienced is, How do you read the reports correctly? and is there anything special you do online to learn more about the property? I already have gotten parcel numbers, but how can you weed out the bad ones? Ones that are empty lots in the middle of now where. I found one in AZ assessed at 98k and the parcel size is 10000sq ft.. It then says that its limited value you is $8999?
Anyone have any help for a newbie about to dive in?
jripeastwest------------------
Skip Pima and Maricopa Counties. The wall street investment firms dominate the bidding there. You might want to skip the least populous counties also, as there are few properties and very few good properties.
Don't expect to get any good properties, especially improved one on tax sales, unless you know how to target those tax liens likely to not be redeemed. That is, that you have read John Beck's "Free and Clear" or his Arizona tax sale volume. His website is http://www.johnbeck.net (converst " dot " to "
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Telephone the county treasurer's offices in the remaining counties and ask how many people showed up last year. Ask how many improved properties went to sale. Ask how many improved properties they have on the auction block this year. How many properties? How many people do they expect to show up? What percent interest rates were typical last year? Investigate cheaply and time efficiently, not by driving all over kingdom come, as I did when I started studying Arizona liens.
Don't be surprised if there are no houses at all in some counties. Do not be surprised if the few houses are junky shacks.
What I do is use the assessor's parcel number and look in the assessor's office to see how much assessed value they show, split into land and improvements. Little improvements mean not good buildings. Zero improvements means no buildings. I look at the maps and get copies if appropriate, so I can locate the parcels on the ground.
I'd suggest also that you read the state laws on the topic of collection of delinquent property taxes. Also read the websites of the treasurer's offices on the topic.
Good Investing***********Ron Starr***********
Just saw your post, thanks for your reply. I was actually going to use Maricopa counties, but i will take your advice and check others. I understand you have to be very careful in the flagstaff area, due to the radiation issues from past nuclear experiments. There alot of properties people don't care about. I want to make some good interest but how do you do that on properties that no one in their right mind would want to save? Do you plan on going to any auctions in Feb? It would be nice to have a buddy down there to help me out. I assume that you have bought liens before. Where have you had luck? Also I have checked post parcels and Maricopa site is very friendly, i guess there is alot of action there.
Jrip
A good Friend of mine and I will be starting in March...but didn't know that Maricopa County was a Bad place to look!
Yeah Maricopa is the highly populated county. You really should go there in Feb, thats actually when the auction is. If you miss it you get the leftovers. I only plan on investing about 5k, howabout you?
whatever I can have saved by then...Most likely about $3,000
Ok, well today i did some research. I called most of the counties and talked directly to the treasurers, some counties have alot of auction between 50-60 people showing up for the auction, however there are a few counties that less than 15 people showed up. I got my friend to help me out with reading parcel maps, I just need help reading the assessment. I don't have time to see 3000 sites, more like maybe 25. Quick question for the last person that posted. Are you in Az now? do you live there?
Maricopa and Pima counties often have more properties for sale than they have time to auction. I believe that it is possible to obtain a list of the properties that weren't offered at the sale due to time constraints. The nice thing about these liens is that you aren't bidding down the yield that you are willing to accept in a competitive bid. You can pay the delinquent taxes right there, and get your certificate that way. Don't count on acquiring many properties this way though. AZ has something like a 97% redemption rate on the tax sale certificates historically.
Please be aware that the liens available on assignment at this late date from the leftover 2003 tax sale in any county in Arizona is highly unlikely to be of any good value. I have searched through most of them and found nothing so far. Also, be aware that there are some with improvements on them with no source of water!!! The county told me that they had to truck water in from 50 miles away!! So be very aware. I have attended the Maricopa auction and I will never go back again. It's wild and ridiculously unprofitable in comparison to other states. Although I have been told that some other counties were more enticing, i did not discover that to be the case for decent parcels. And the foreclosure rate on homes in Maricopa is less than 0.5%. I have found much more profitable places to invest in than Arizona and being from North Carolina, it's just not worth the effort for me. Many parcels did not exist. Some addresses were between blocks of houses, ie the street between blocks, etc.. Good luck!
RIchen, thanks for the update. Can you maybe specify or hint to the rest to of us were we might find a county in AZ to start? And for that poster that talked about the water supply. Where did you find this info? Was it actually on the assessment?
I'm fine with the redemption rate for the moment, I plan making some income on interest and then waiting patiently to see if So Cal ever crashes.
jripeastwest,
Actually I was really lucky. I did not find that info. The nice lady at the del tax dept told me about it and warned me that that entire subdivision had that problem and to stay away from bidding them and that that was why they were all going to tax sale!!! Otherwise, i probably would have bid for them and got stuck!
AS for where to go in Az, my comments would be nowhere. Dont go to Arizona to buy liens if you want to make money. Just because someone wrote a book on 16% solution does not mean it is the best place to invest. If you are close to Texas, i would highly recommend you look there at redeemable deeds. Good luck!
RC
Thanks,
For the reply, I will take that into account. There are just so many ways to invest. In Southern California were I live it is quite hard. I have other investments, but i really want property, A single family would be nice, but not at these prices. It would be impossible, and if i did take that plunge, and interests rates went up, so would the value of my investment, pretty much screwing myself. Honestly tax liens are great for me, i make constant income, and then if something were to happen I (foreclosure) that would be just an extra benefit. For the time being I'll focus my time on tax liens, it isn't a huge jump, and lots can be learned that will come in handly later. ie. assessments, improvements, lots size, reading parcels, etc.
Its a win win, but like any other investor amatuer to expert, I must account for risk.
Mainly due my homework, be calm and think things through, not just bid. I understand fully, that my money may be taken, that i might become a co-owner in a deliquent tax lien, and even foreclosure issues. I'm in the process of being incorporated, step one, I'll all you viewers posted. Feburary is coming full steam ahead.
If anyone reading this has other investment ideas, or comments start posting. I am all ears to any information that can be thrown my way.
Hi Gang,
In regards to the areas of AZ that have no water and it must be trucked in... These are usually rural area on larger acreages. The state really only has two areas of groundwater. One in the NE part and one more towards Tucson. Phx gets almost all of its water from the Co river. What little snowfall we get in the mountains and comes down to the lakes makes up the rest of it. So if you are in the city areas you will have water. Out in the rural areas, you bring it in by truck or trailer.
Strange place here. Have little groundwater, but lots of man made lakes, and more boats per cap than any other state. Oh yeah, to try and get out of the 110 degree heat.
Best,
Ryno
I have a friend who bought a piece of land in Cochise county that was close to power and phone, but had no water.
He paid to have a well drilled. There are lots of services out in Az that will do that -- the problem comes in that you may have to drill a couple of hunderd feet to hit water (if they know what they are doing). It can be pretty stressful seeing you money being spent (drilling) through the hard rock until they finally hit water, so it may not be for the faint of heart, but it can be done. If you were going to buy some land in the rural areas I recommend working with a hydrologist to get an idea what it will take to find water on the property.
There are areas in the "White Mountains" where this is really not an issue so consider that area also.
Glenn