Sign up, and you can make all message times appear in your timezone. Sign up
Oct 7, 2015
1:18:01pm
Just participated in my first tax lien sale
I went to the sale for my local county rather than the nearby large municipal county. It was smaller. It took place within an hour and I was able to get a little more attention as a beginner investor. The coordinators of the sale explained the process and reiterated the things that we as winning bidders would be responsible for. The sale got started and wow. There were some big hitters, bidding liens up well out of my range. As the sale progressed, I thought, oh well, I'll just sit here and content myself with learning. I took notes to see what the winning bids for each property were (so in the future, I could get an idea for how much overbid properties generally went for).

During the course of the sale, a number of properties did not get bid on. Some of them I was familiar with from my due diligence and understood why they would not be bid on. Some of them though, I was scratching my head wondering why no one would bid on them. When the sale was over, the auctioneer gave the crowd an opportunity to revisit any parcels that were not bid on. I checked through my list and found a couple I had circled as having an interest in them. After a couple others had brought other parcels up for bidding, I had him re-open the bidding for two parcels I had circled on my list. Nobody else was interested in them, so I got them for minimum bid.

PARCEL 1 is a 2.2 acre property fronting a major road and it was one parcel out of many originating from the same family (basically some farm land). Given that it fronted a major road, I was kind of surprised nobody wanted it (not to mention the other parcels that totaled another 114.33 acres). My post diligence informed me that those parcels are landlocked so that was why no one was interested in them, but that didn't explain the lack of interest in my 2.2 acre plot I secured a lien for. Why did no one bid on that? Umm...Hoosier, that's a pond. Oops. So I now have a lien on a pond. Hooray. But wait! I re-examined all the parcels from the one family that nobody bid on and found that they all together connect to my little gate-keeping Gozar parcel (1 Shrute buck for anyone who gets the reference). Basically, my parcel IS the road frontage that kept everyone else from bidding because it was missing in those other parcels and making them "land-locked". Yes, my parcel is a pond, but it also has some land through which access to all the other parcels can be granted. There is an opportunity here. The other parcels will come up again next year (if the owners do not pay their taxes) and I could be the sole bidder for whom bidding on the other parcels actually makes any sense. Granted the taxes for those parcels this year totaled $359,100.39, so that's a little bit of an impediment, but I can work with it, especially since land in this corridor can go for $70-200K+/acre (you can do the math for 114.33 acres). That would be a nice little boost to my IRA (through which I bought these liens). *sigh* I feel so "dumb" for buying a lien on a pond.

PARCEL 2 had me excited until I just checked it again. I went by the address after the sale and looked at the house. A very nice 3BD/1BA house that backs to the high school. First house on the parade route. Great condition. No reason anyone would not want to live there. That said, when I checked the GIS, it became apparent why no one bid on the parcel. It only covers a portion of that property. Oddly enough, it appears that my parcel would divide the house (as part of it sits on what would be my property if it doesn't redeem). Hmmm...not sure how that works. I suppose that I could invite tons of people over to the property whenever there is a parade and make a general nuisance doing nothing more than what any owner could be expected to do with their property and curtailing the current owner's usage of what used to be her property until she agrees to make good on paying what she owes. She would have a hard time selling her place with that encumbrance. It's not a complete disaster, but that one could be a bit of a pain in the butt. A saying was going through my head when I bid on these liens - "If you are the only one bidding on it, you're the idiot". Alternatively, if it does not redeem, I could take ownership of the property quietly and hope that she misses taxes on the other half in an upcoming year and gain full control of the property (since other bidders would be unlikely to bid on the "other" portion.

Most likely...each parcel redeems and I get a little interest for putting my money to work. We'll see.
Hoosier Cougar
Bio page
Hoosier Cougar
Joined
Jul 9, 2001
Last login
Oct 28, 2023
Total posts
24,035 (1,523 FO)