Weld County Colorado Auction Results

Well, the Weld County results are in. It was an internet auction held by RealAuctions.Com and the results are very interesting.

First thing to keep in mind is that a lien in Colorado that is sold this year and redeems on the last day of the redemption period (three years) would earn a total of 45% on the taxes owed ($450 on a $1,000 lien). Also keep in mind that the premium you bid you don't get back. With those thoughts in mind, here are the results.

There were 1,462 liens sold and 165 liens struck off to the county (no bids).

The sane people:
1,280 liens were sold at an average premium bid of 5.80% of the lien amount, i.e. if the lien was $1,000 it took an average bid of $58.00 to buy the liens.

50 liens were sold at no premium whatsoever.

The escapees from the "Happy Dale Home for the Mentally Bewildered":
132 liens were sold at a an average premium of 75.50%, in other words on a $1,000 lien they bid a premium of $750.50! Remember, if the liens redeem the last day they would make a total of $450 on that lien or, in other words, they would lose $300.50. The only chance they have to make any money on these liens is if they don't redeem and Weld has a very high redemption rate.

And the prize goes to a bidder who bid a premium of $600.00 on a lien that was $28.99 or a premium of 2,069%!!! - what were you thinging? Or were you thinking at all?

South Dakota goes to tax deeds

South Dakota has changed their tax sale laws, House Bill 1069 now requires the counties to keep all tax liens and not to sell them. What now happens is the county, after a period of 3 to 4 years (depends on city or county land) will be able to sell the property in a tax deed sale. Unfortunately, the time of the sale is a county option and no specific time for sale is set. We will get you more information over the next few weeks.

Colorado Internet Tax Lien Sale Training Dates

There will be two new Internet sales this year in Colorado, Weld County and Denver County. Both are being run by RealAuction.com who has run the most successful Internet sales in Florida and Arizona. They will have training classes for any who want to attend. The schedule is as follows:

Weld County the site is http://www.weldtaxsale.com/

October 11th 2006 at 3:30 PM MSTOctober 25th 2006 at 6:30 PM MST
Weld County Training Center 1104 H StreetGreeley, Co 80631


Denver County the site is http://www.denvertaxsale.com/

October 12th 2006 at 1:00 PM MSTOctober 26th 2006 at 5:30 PM MST
Wellington E. Webb Municipal Building201 West Colfax Avenue
Room 4.G.2Denver, CO 80202

Why care about a "Bulk" sale of tax liens?

An example of a "Bulk" sale of tax liens is shown below. Why would you care if you don't have an extra $10 million hanging around to bid? The reason is the buyer of this package of liens may well have an interest in selling some of the liens to limit their risk.

The Lucas County Treasurer's Office expects to distribute payments totaling about $9.8 million to school districts, cities, and other taxing districts from the sale of liens on delinquent property taxes, Treasurer Wade Kapszukiewicz announced yesterday.

The money will come from the sale of liens on about 4,800 tax-delinquent parcels to a New Jersey collection company.

Mr. Kapszukiewicz said Lucas County is the seventh county in the state to take advantage of the power approved in 1997 to sell liens on parcels with delinquent taxes to a collection agency.

He said his office awarded the tax-lien sales to Xpand, of Morristown, N.J., a subsidiary of Bear Stearns Cos. Inc., for $9.8 million, which gives it the right to collect on the delinquent parcels and to charge interest rates of up to 18 percent.

The lien sales will take effect Nov. 30, unless the owners of the 4,800 properties pay their bills in full or qualify to be put on a payment plan.

Mr. Kapszukiewicz campaigned in 2004 on a promise to try the tax-lien sale, which he said would help dislodge millions of unpaid taxes that were not being collected by his predecessor, Ray Kest.

"This program does not target anyone who is making a good-faith attempt to pay their taxes," Mr. Kapszukiewicz said. (this is from the Toledo Blade)

Interest Rate versus a Penalty Rate - You need to know the difference

One thing that seems to catch some people unawares is the interest rate that is quoted for a tax sale. There are two types of interest rates - one is an interest rate and one is a penalty. Why do you care? Because it can make a substantial difference in your return on investment.

Lets assume there are two different tax lien sales, one has a 10% interest rate and the other has a 10% penalty. You buy a $1,000 lien in both sales and both liens redeem exactly 90 days later. Which one was the better investment? Let's do the numbers.

The 10% interest rate lien will earn the following: $1,000 times 10% for 90 days will earn $24.70 (1000 X .10/365*90)=24.70. A 10% percent penalty for 90 days (or 180, 0r 365) will earn $100.00 (1000 X .10)=100. Which would you rather have? The anualized return on the penalty is 40.6% (100 / 90 X 365 /1000). So, obviously 10% is not always 10%. You need to know if you are earning a penalty or an interest rate.

Some of the penalty states are SC, TX, IL and IN. there are others. Check it out and know what you are getting.

Three Colorado Sales on the Internet

For the first time there will be three Colorado Tax Sales on the web. For the last couple of years Jefferson County has held a web sale, but this year they will be joined by both Denver County and Weld County. Jefferson County will be October 18th, Denver County will be November 6th, and Weld County will be November 1st.

These Colorado counties have pretty good real estate on their sales although the foreclosure rate in Colorado has been one of the highest in the nation, there should be some good values for tax lien sale investors.

One word of caution - remember that in Colorado the amount you bid above the taxes owed you do not get back, so make sure you have done your due diligence and that you don't get carried away. Also, don't forget that this is a three year redemption period so you have to be able to post subsequent taxes for the liens that have not redeemed.

Good luck and good bidding!