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Joe,
The way it works here (Maricopa County) is via tax lien cert. "auction" once a year. All of the tax-delinquent properties are issued liens, which you get to bid on. But, what you are bidding on is the interest rate itself. It starts out at the max of 16%, and people bid down the rate to whatever the lowest % of interest/return they are willing to accept.
On most decent properties, it usually ends up between 5-10%. But yes, it is a GUARANTEED investment, and you are paid directly from the county treasurer. The property owner will either redeem and pay the taxes (+ your interest rate)
OR, if it isn't redeemed in 3 years, you can foreclose and get the property (free and clear of all junior liens) for a song.
Keep in mind that about 96% redeem, so it is usually seen as a solid investment vehicle, rather than a real-property portfolio building vehicle. BUT, for that off chance that the owner doesn't redeem, you want to be sure that the property is desirable/saleable, AND as described by the assessor. In other words, due diligence is key.
Last edited by Eric Coffey; 06-02-2008 at 07:29 PM..
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