Colorado Tax Lien Sales Now Live

[Vigilante]

I know just enough to be dangerous in Tax Lien investing, and don't know shit about investing in tax liens in Colorado. So, if anyone here on the forum knows specifically about Colorado tax liens, please post. Meanwhile, here is the text of an email that I received today from the company hosting the online auctions of tax lien certificates for Colorado :

To All Tax Certificate Investors,

The Colorado tax certificate auction season has begun! Realauction is once again hosting the 2012 Annual Tax Sales for ten Colorado counties which includes the newest addition to our roster, Douglas County. Please take the time to review this year’s offerings and posted deadlines to ensure your participation in the 2012 Annual Tax Sales. The links to all of the upcoming auctions are noted below for your convenience.

Adams County – https://www.adamstaxsale.com – Auction Opens 10/9/2012
Arapahoe County – https://www.arapahoetaxsale.com – Auction Opens 10/9/2012
Archuleta County – https://www.archuletataxsale.com – Auction Opens 10/9/2012
Denver City & County – https://www.denvertaxsale.com – Auction Opens 10/15/2012
Douglas County – https://www.douglascotaxsale.com – Auction Opens 10/22/2012
Grand County – https://www.grandtaxsale.com – Auction Opens 10/1/2012
Mesa County – https://www.mesataxsale.com – Auction Opens 10/11/2012
Morgan County – https://www.morgantaxsale.com – Auction Opens 10/2/2012
Park County – https://www.parktaxsale.com – Auction Opens 10/8/2012
Weld County – https://www.weldtaxsale.com – Auction Opens 10/8/2012

Thank you for your continued interest. We wish you great success in this year’s auctions!

Customer Service
Realauction.com

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Vigilante]

Info on colorado tax liens from Colorado (CO) Tax Lien Sales | Tax Lien and Tax Deed States :

Colorado (CO) Tax Lien Sales


Sale Type: Tax Lien Certificates
Interest Rate: 9%
Bid Method: Highest Bid
Redemption Period: 3 Years
Sale Date(s): October - December
Statute Section(s): Title 39, Article 11
Over-the-Counter: Yes
Colorado State Overview

Colorado is classified as a tax lien certificate state. County tax sales are typically held each year between October and December. The county posts a list of all tax delinquent properties prior to September first of each year. The county sends out certified notification letters to the last recorded address of the property owners as well as all parties with a vested interest in the property being sold. The county also publishes a notice of the impending sale in local newspapers for a period of four consecutive weeks. All affected property owners have the right to redeem their property by making a full payment on their delinquent taxes, penalties, and related fees prior to the posted deadline. All properties that are not redeemed will be sold at a public auction held by the respective county. The county treasurer is responsible for conducting and officiating all tax liens sold. The starting bid is the combined total of all delinquent taxes, penalties, and fees.

Tax liens are purchased with a redemption period of three years. The original property owner can redeem their property ownership at any time during the three year redemption period by submitting a full payment of all delinquent taxes, penalties, and any related fees along with the designated interest rate. If the property owner does not redeem the property during the three year redemption period, the buyer may apply for a deed to the property by presenting the tax lien certificate and paying off the property's unpaid tax balance.

Colorado has a rate of return at 9% above the federal discount rate. This means the interest rate can change from year to year. The federal discount rate is set by the federal government.

Colorado uses the "Premium Bid" method. Counties that use this method will have a starting bid that includes all delinquent taxes, penalties, and fees. Bidding starts at the set minimum and is bid up in price until the bidding stops. The highest bidder is awarded the tax lien to the property.

Many counties in Colorado, especially the larger ones (more population like Denver County, El Paso County- Colorado Springs, Adams County- Aurora, Jefferson County- Lakewood, and Larimer County- Fort Collins ) may use realauction.com for online bidding. They have some wonderful educational opportunities to get you familiar with bidding prior to the auction's start. Be sure to take advantage of that!

NOTE: In Colorado, the bidder does NOT receive back any premium bid over the tax lien amount or any interest on that amount.

 

[quamism]

Thanks for posting this Vigilante. I've always wanted to get involved with these auctions. Might be time to sit down and do some solid research.

 

[Vigilante]

There's a TON of great material out there on this type of investing. I attended a one day seminar on this, and need to really spend some time learning this. I have a full (dated, but valuable) DVD series that we bought off of eBay that paralleled the seminar we went through. It was one of those seminars where they try and sell you a $1500 investor's kit at the back of the room... but we took the seminar and then bought the kit off of eBay from someone who no longer needed it (I think we payed $300 for a "used" kit instead of the back of the room $1500 retail).

What I like about it is :

1. research pays off
2. guaranteed/predictable return on investment
3. it's not available to everyone, because it requires a skill set and knowledge base to participate (which most people will not go through the effort and education to gain)

I am less interested in trying to acquire properties using this method, and more interested in getting tax liens from properties with a high likelihood of satisfaction of the lien.

If there is anyone on the forum skilled in this form of investment, PLEASE start a thread with best practices. I will be stepping into this arena over the next several months. A year from now, I will be able to share some wins and losses here... but if there's anyone here capable of keeping my losses mitigated... please post.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Vigilante]

*** Paging RUNUM ***

Any words of wisdom on tax lien investing?

 

[AnneC]

I live in Colorado, but I've only bought tax liens in Wyoming. The liens in Colorado get bid up so much by institutional investors that they weren't really worthwhile. At least, that was the case when they were held in person. I doubt it's changed for the better now that it's online. Interest rate is 18% in Wyoming, but they don't hold them online (yet). Downside is that the population in Wyoming is not very large, so there weren't too many liens for sale, even in the largest county.

I think tax liens are a relatively safe place to park extra cash you have lying around, but somewhat unpredictable in terms of how much you will be able to buy and when they will be redeemed.

 

[Vigilante]

Anne...

If you ever wanted to start a thread here on the tax lien investing you have done, it would be well received and well read. Considering sharing what has worked, what hasn't, and how the process works over all. There's a bunch of rookies like me that would really love to read about someone that has done this before.

Thanks. Glad you are here! - Dave

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[G-man422]

I'm following this thread closely, as I too am interested in tax liens vesting. Thanks for starting it, Dave and thanks for the comments, Anne.

 

[preciseau]

For those investing in liens - I saw this ad on facebook. Looks like a pretty useful tool for staying organized: LienLog | Tax Lien Certificate Investment Portfolio Management and Servicing Software | LienLog - Personally have done no research into the lien niche and/or tried out this tool. Just might be useful for someone.

 

[H. Palmer]

I have done some extensive research into tax liens but haven't got around to investing yet.

It’s a very complicated subject, even more complicated for me because I would be investing from Europe and there’s a lot of stuff that is very US specific.

However, my latest findings are that timing is very important. Anyone can browse through lists of tax liens online that were not sold at the auction. These are still for sale, but if you research them it turns out that a lot of them are liens on vacant land that haven’t been paid taxes on for years. In other words, many tax liens that are for sale online are just non performing.

However, I guess timing is of the essence here and the trick seems to be to either go to the live auction (not an option for me) or start selecting tax liens online as soon as they appear online.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[AnneC]

I've only invested in Wyoming, so I don't know how helpful that would be to everyone else. I posted about it in the other thread back in August. And when I attended the Denver auction, it was back when they did it in person, but now the auctions are held online. I'm happy to post about my Wyoming experience, but it's not really earth-shattering.

When I first got started, I bought the "The 16% Solution: How To Get High Interest Rates in a Low Interest World with Tax Lien Certificates" by Joel Moskowitz. But remember, this was 10 years ago! This book is probably really out of date, and you can find better information online now. If you can find it, it might be worth a skim just to orient yourself.

I think the key is that laws and rules vary state to state, county by county. I've found that most counties do a pretty good job of outlining general information, procedures, and dates.

 

[H. Palmer]

As a matter of fact, not all US states sell tax liens. What you have is tax lien states and tax deed states. Only a few do both.
I collected an overview of the tax lien states.

Alabama
Arizona
California
Colorado
Florida
Illinois
Indiana
Iowa
Kentucky
Louisiana
Maryland
Massachusetts
Mississippi
Missouri
Nebraska
New Hampshire
New Jersey
New York
North Dakota
Oklahoma
South Carolina
South Dakota
Vermont
Washington D.C.
West Virginia
Wisconsin
Wyoming

Anne is right in saying that all states have different laws regarding tax liens and deeds. The differences in calculation of the interest, the redemption period and the type of bidding. The 16 percent for instance refers specifically to Arizona.

 

[Vigilante]

Just like Anne stated, most people I have met that invest in tax liens specialize in a single state, and counties within that state.

Amschel, are there restrictions on foreigners purchasing tax liens in the United States?

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[CTamme]

I just looked and at least Scott County, Iowa uses tax deeds.

Tax Deed Properties

I am still trying to understand what they are doing when they sell a tax deed.

 

[AnneC]

@Vigilante, Everyone who purchases tax liens or deed are required to fill out the IRS Form W9. I believe most states allow foreign investors, but there may be restrictions or additional red tape. Real estate laws and foreign investors will vary state-to-state. For example, in Colorado, if you are a foreign investor (including out-of-state, not just out-of-country) and sell a property, the title company must withhold 2% of purchase price for state taxes.

@CTamme, I know enough about these things where I can summarize the basics: tax lien vs tax deed, redemption period, bidding methods, etc. I will start another thread for it. However, I probably won't have time to do this until Monday.

 

[H. Palmer]

Just like Anne stated, most people I have met that invest in tax liens specialize in a single state, and counties within that state.

Amschel, are there restrictions on foreigners purchasing tax liens in the United States?

Vigilante, from my research I concluded that in principle foreigners can invest in tax liens in any state.

Taxwise, the foreigner has to fill out a so called W8BEN form from the IRS.
But that's not the problem.

The problem is the differences in payment systems that the US uses in comparison to for instance Europe. For example all counties ask you to forward money in advance of the tax lien auction, even when it's held online. The method of payment they require is often ACH. As a European I only have a suspicion what this is, but am not entirely sure.

Then if you have acquired a couple tax lien certificates the county or state should send the check to your address. In my country checks aren't used anymore and a few years ago it turned out I had to pay a significant fee to cash a US check at a bank.

If it turns out I can't comply with the payment methods that the counties require, then another option is to buy tax liens from brokers. I haven't gotten to that point yet.

By the way if you want to brainstorm on this with me, just send me a PM.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Vigilante]

ACH is basically a wire transfer. Electronic bank to bank transfer.

http://answers.yahoo.com/question/index?qid=20080909064659AAIHyu3

 

[H. Palmer]

Vigilante, that's right, but now I remember it was a bit more complicated. This is from the Baltimore tax lien website:

"An ACH debit is an electronic funds transfer from your bank account, initiated by the Tax Collector with your prior authorization. For more information on ACH, please visit the NACHA, the Electronic Payments Association at www.nacha.org. Funds must be drawn from a US financial institution."


So what this basically means is: the investor puts xx amount of money on a bank account. At a certain date the county tax collector orders its bank to withdraw the amount from the bank account of the investor.

I wiki'd it and it seems the general word for this is "direct debit".

In principle this can be done by a foreigner, but it means he has to open a US bank account.

 

[CTamme]

@CTamme, I know enough about these things where I can summarize the basics: tax lien vs tax deed, redemption period, bidding methods, etc. I will start another thread for it. However, I probably won't have time to do this until Monday.

I would appreciate the clarification on the process. After looking further it looks as though they almost use tax lien and tax deed intechangeably but from my limited knowledge these would be deemed tax liens in Iowa.

"An ACH debit is an electronic funds transfer from your bank account, initiated by the Tax Collector with your prior authorization. For more information on ACH, please visit the NACHA, the Electronic Payments Association at www.nacha.org. Funds must be drawn from a US financial institution."

ACH stands for Automatic Check. I use this method of funding for my trading accounts. Funds usually take a day or so to clear and are usually 3 days at most. Very efficient and cheap way to transfer funds as there are no charges like other methods that may be used. I am not sure what the difference is between an ACH and a wire transfer.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[H. Palmer]

ACH stands for Automatic Check. I use this method of funding for my trading accounts. Funds usually take a day or so to clear and are usually 3 days at most. Very efficient and cheap way to transfer funds as there are no charges like other methods that may be used. I am not sure what the difference is between an ACH and a wire transfer.

ACH stand for Automated Clearing House. But this is not the point. The point for foreigners is - in response to Vigilante's question - that the counties use ACH Debit, but only on US bank accounts.