Online tax lien certificate auctions. Post 58

YourHub.com Contributed by: Arapahoe County on 11/14/2007

Annual tax lien sale

Move over eBay® …The Arapahoe County Treasurer’s Office takes its annual tax lien sale online Nov. 14 – 17, 2007

Littleton, Colo. – For the first time, the Arapahoe County Treasurer’s Office will conduct its annual tax lien sale Nov. 14-17 online, which will give more citizens the ability to purchase tax liens and bid from the comfort of their homes.

“This is good news for Arapahoe County residents since the increased number of participants will generate greater revenue and give more people the opportunity to participate in the sale,” said Treasurer Doug Milliken.

Previously, the sales were restricted to about 250 bidders due to size constraints of the Administration Building East Hearing Room. Bidders now will be able to participate from their home. The sale is open to anyone who wants to participate, including bidders from other states and around the world.

Conducting the sale online will free up most of the Treasurer’s Office staff to perform their normal duties. The online sale also will save the cost of printing the list of available liens in booklet form for the buyers, which will decrease overtime costs for both the Treasurer’s Office and the County Print Shop.

“Every tax lien available for sale this year could produce a premium, which should generate further revenue for the County,” added Milliken.

For more information or to participate in this year’s tax lien sale online, please visit www.co.arapahoe.co.us or call the Treasurer’s Office at 303-795-4550.

This is the entire article.

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Coach Mitch’s REFLECTIONS

One after another, counties are conducting tax lien certificate auctions on the internet. Like everything in life, there are both good and not so good aspects to this “advancement.”

Good: Internet auctions give any citizen with access to a computer the ability to purchase a tax lien.

Good: Citizens can bid from the comfort of their homes or a library.

Good: This, unheard of before access, allows anyone to participate.

Good: Bidders can and will be from other states and even from other countries.

Good: The tax collector’s office no longer will need to print up a big booklet with all the relevant property tax data, saving printing costs.

Good: The tax collector’s office will no longer need to mail out a booklet, saving paper, labor and postage.

Good: All available tax lien certificates will probably be sold, bringing unprecedented income to the county.

Good: The auction, like most auctions, should produce a hysteria, which will result in greater income to the county in the form of overbid premium income.

BTW, in Colorado, the premium income goes to the county, which is the main reason why the government is trying to drive traffic to the auction.

Not So Good: All available tax lien certificates will probably be sold, bringing unprecedented income to the county.

Not So Good: The auction, like most auctions, should produce a hysteria, which will result in greater income to the county in the form of overbid premium income.

Not So Good: The government has the opportunity to pull more monies out of a citizen’s pocket than it is rightfully due.

Not So Good: Any opportunity to reform the tax collection process will be delayed because of the fact that the on line auctions are bringing in more money than the normal way of auctioning TLC’s.

Government knows what it’s doing.

The county governments need to raise money to pay for town programs, county programs and mandated state and federal programs, many of which are unfunded mandates. In the tax collection area, the county governments answer is to make sure 1) that all TLC’s are sold and 2) that TLC’s are sold at a premium. Both events bring in undeserved cash to the county treasury.

Putting the tax lien certificate auctions online has some benefits; mostly that the property records will also be online. Easy access to these records makes it much easier for serious investors to research their potential purchases.

All TLC’s will be sold – including TLC’s on useless property!!!

The real negative is that the government will sell all the TLC’s. The last TLC auction in Maricopa County, AZ set the standard. All the TLC’s were sold. Every single one!

When I say useless land, I mean it. That includes TLC’s on very narrow strips of land, ravines, landlocked parcels, parcels under a bridge, medians within a highway, environmentally contaminated land, land so far out in the desert that it won’t be developed for 50 years, etc.

Tax lien certificate investors, expecting an owner to pay the taxes on these useless properties will wait a long time. They will lose their investment and the only one that gains is the county. The county has the investor’s money. The only thing the investor gets is an expensive seminar, i.e. a real good lesson.

Hysteria does produce predictable results

Because it is a government auction, the mantle of respectability is imprinted on the proceedings. People will bid because they believe that the government is putting up good merchandise. On this basis, they will bid too much. On this basis, they will bid on property that should not be bid on.

I have written before that the selling of worthless TLC’s to citizens is one of the great frauds being perpetrated on citizens by county government.

The government has the responsibility to FULLY inform prospective purchasers. They often ignore this responsibility because they can. They make the rules. Government often exempts itself from rules that we, as mere vassals, are required to obey.

CAVEAT EMPTOR

For instance, read any set of rules for conducting a government auction and you see that the government guarantees nothing. Caveat Emptor! You buy at your own risk, as is, where is, with no warranties, expressed or implied. I’m sure all used car dealers would love to be able to sell on that basis.

The most unwary investors will be from overseas. There will be an entire movement aimed at enticing foreigners to buy these tax certificates. Americans, themselves sucked into the TLC hype, and desperate to get back their investment, will try to attract unwitting foreign money.

Foreigners should be wary

This undeserved faith in government combined with a significant lack of knowledge in the tax lien investment is not limited to small foreign investors. Not long ago I was contacted for help by a significant real estate investor who had been contacted by a wealthy foreigner whose network had a large amount of investment capital.

The foreigner was enamored by the idea that the TLC gets such a high rate interest and is “government guaranteed.” Well, as you know, these investments are not guaranteed and the only time that you get your investment back is if the owner pays the taxes owed. And, when the investor looks to foreclose on the property in order to recover their investment, they may be in for a rude surprise.

One of the many reasons that someone does not pay the taxes on their property is that the property is not worth the taxes that they must pay. If the investor did not research the property before buying the TLC, then the TLC investor may decide that the property is not worth the ownership responsibility and stop putting out good money after having put it out for a bad investment.

My system takes care of this little known issue

Coach Mitch’s “Ridiculously Simple System…” concentrates on looking at property prior to the tax deed auction. I do not recommend buying tax lien certificates. Rather, look at many tax delinquent properties and either purchase them for a ridiculously small amount or use  Coach Mitch’s famous $1 Option to control the property until you sell it.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

Being careful leads to having good luck,