Arizona tax lien sales auction tax lien certificates, a little-known but lucrative passive investment opportunity and excellent hedge against inflation.
Arizona tax lien sales are both exciting and profitable for savvy investors. Investing at Arizona tax lien sales doesn’t have to be complicated, thorough due diligence helps you make the right choices; it’s essential to know what you’re buying. Learning about over-the-counter tax liens and the specifics of county tax lien auctions can greatly improve your chances of success.
Ted Thomas, America’s tax lien certificate and tax deed authority, has been guiding newcomers for over 30 years on how to navigate this business. To help you better understand the process, let’s dive into some of the most commonly asked questions about Arizona tax lien sales.
Key Takeaways
- Arizona tax lien sales use a reverse auction process where the interest rate is bid down
- The tax lien certificate interest rate in Arizona is up to 16%
- Conducting proper due diligence on properties can help avoid potential pitfalls and maximize returns
- Familiarizing yourself with over-the-counter tax liens and county tax lien sales can open up new investment opportunities
- Arizona permits foreign investors to purchase tax liens
How Arizona Tax Lien Certificate Sales Work
What is the Bidding Process at Arizona Tax Lien Sales?
Arizona tax lien certificates are sold via a reverse auction process. What you’re bidding on is the interest rate that you will receive. The bidding begins at the maximum rate that the state allows and is then bid down with the lowest bidder ultimately winning the certificate.
What is the Highest Return I Can Make on Arizona Tax Lien Certificates?
The maximum rate that Arizona pays on a tax lien certificates 16%. Bear in mind that the bidding at Arizona tax lien sales starts at a 16% return and goes down if there are other bidders.
Can I Finance the Purchase of a Tax Lien Certificate in Arizona?
When it comes to financing Arizona tax lien certificates, banks usually do not provide loans unless you offer collateral. As a result, investors typically rely on cash or use IRA funds from a self-directed IRA to purchase tax lien certificates in Arizona. You can use your personal financial assets, like IRA money, savings accounts, or even cash equivalents such as cashier’s checks and bank drafts to make the purchase.
Are There Any Restrictions on Foreign Investors Investing in Arizona Tax Lien Certificates?
There are no restrictions on international investors investing at Arizona tax lien sales. In fact, thousands of Canadians are already investing in tax lien certificates in the United States, including in Arizona. The state welcomes these “snowbirds” with open arms at Arizona tax sales, which are typically held in February.
What Type of Due Diligence Do You Have to Do on a Tax Certificate?
Due diligence is crucial when it comes to investing in tax lien certificates. To avoid potential complications, such as purchasing a property with environmental problems, you should always check the property before making a decision and research the title online, checking for additional liens and encumbrances or other potential issues.
To avoid costly mistakes, Ted strongly recommends that you physically walk on the property to check its condition or have someone do it for you. Always ensure that you know exactly what you’re buying when purchasing tax lien certificates at Arizona tax lien sales.
Even though you’re purchasing the tax lien and all the rights that come with it rather than purchasing the property outright, there is always the chance that you could end up owning the property if the property owner does not pay the delinquent taxes plus interest.
95% to 97% of tax delinquent property owners will redeem their property, but a small percentage will not. Therefore, ensure you evaluate the location, environment, and overall condition of the property and the state of the title before buying tax lien certificates at Arizona tax lien sales.
How Can I Find Pima County Tax Lien Auctions?
In Pima County, Arizona, tax lien auctions are held online via the Real Auction platform, and these tax sales usually occur in February. To stay updated about upcoming tax lien auctions in Pima County, check the county’s official website or contact the treasurer’s office to obtain auction dates and additional details.
On the Pima County Treasurer’s Office website, you will find the auction schedule, information about the auction rules, bidding procedure and fees, plus a downloadable tax lien sales booklet. Additionally, on the treasurer’s website, you can find Pima County over-the-counter tax liens, which are called “New Assignments,” and you can register to purchase tax liens online.
Buying Over-the-Counter Tax Liens in Arizona
Another commonly asked question is, “Is it possible to buy over the counter tax liens in Arizona?” and the answer is, yes, you absolutely can. Over-the-counter tax lien certificates are available in Arizona and numerous other states.
Over-the-counter (OTC) tax liens are tax lien certificates that were not purchased at Arizona tax lien sales. After an auction, the unsold tax lien certificates are typically available for direct purchase from the county treasurer’s office. This is referred to as buying “over the counter” because the transaction takes place at a physical counter in the office.
When investing in OTC tax liens in Arizona, you can expect a high return on investment because the maximum return percentage on a tax lien certificate in Arizona is 16% and that’s what you automatically get on Arizona OTC tax liens because there are no competing bidders. No bidding at all required, you simply buy them over the counter from the county. Just ensure you verify that the certificate is still for sale and research the property.
Conclusion
Arizona tax lien sales provide ample opportunities to earn inflation-beating interest rates because they typically have multiple tax lien certificates up for grabs and pay returns of up to 16%.
Consider purchasing over-the-counter tax liens to secure the highest return since there is no bidding involved in the sale of OTC tax liens. However, since there is a chance that you could end up owning the property, always conduct proper due diligence on real estate before buying tax lien certificates at Arizona tax lien sales and particularly if you’re purchasing over the counter because there may be a good reason why the tax lien certificate did not sell at the auction.
You can visit the county website for information about upcoming Arizona tax lien sales and lists of tax lien properties for sale. With diligence and careful research, Arizona tax lien certificates can be a lucrative investment opportunity for both local and foreign investors.
If you’d like to know more about tax lien certificates and tax deed investing Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, auction buying tours, personal coaching with certified coaches, and an interactive map and auction calendar research tool that allows you to visit each county online to find the details about upcoming auctions.
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