Today’s lesson is about over the counter tax liens in Arizona, and you’re going to find out how profitable it can be.
The topics I’ll be covering in “How to Buy Over the Counter Tax Liens in Arizona” are:
- Buying Tax Liens in Arizona Over the Counter
- The Difference Between Tax Liens and Tax Deeds
- What Are Over the Counter Tax Liens?
- Tax Lien Interest Rates by State
- How to Find Tax Lien Certificates Sold Over the Counter
- How to Make Money on Tax Liens
- A $169,000 Profit From an Over the Counter Tax Lien in Arizona
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Buying Tax Liens in Arizona Over the Counter
Let’s talk about how to buy over the counter tax liens in Arizona, what they are, and how they work. So, stay with me because I’m going to show you how to make big dollars right away.
I’m Ted Thomas, and I’ve been involved in tax liens as an investor, a guide, and author for well over 30 years’ time. Anybody can do this business, but it usually takes just a little bit of training. So, let’s learn about over the counter tax liens in Arizona.
First, I’m going to explain a little bit about tax liens and a bit about tax deeds, then I’m going to point out a student couple who made over $100,000 shortly after they finished their training on buying over the counter tax liens in Arizona. They purchased a certificate in Phoenix and ended up making six figures.
Think to yourself, would that work for you if you can make a small investment? Well, I’ll show you how to do it, and you can make up your mind.
What I’m about to share with you is a solution to making money in the future, and I’ll discuss a step-by-step process.
The Difference Between Tax Liens and Tax Deeds
Now, let’s talk about tax liens and tax deeds. They’re obviously a lot different. Liens and deeds are sold in over 3,000 counties across the United States. What are they selling?
Some of the counties are very benevolent. They sell tax lien certificates. That means you can earn an interest rate, but the person that’s in the property stays there even though they’re in default. What’s happening is the local government is starting a process to confiscate the property.
If you were to buy tax deeds, the property has already been confiscated. When they confiscate the property, the treasurer wipes out the mortgage and deed of trust and is going to sell that property for very close to the back taxes.
What’s really going on? The county and the municipality need money to run the government, and that money comes from property taxes. Anyone who doesn’t pay the tax is subject to having the property confiscated and taken away. All of the states can take the property away, but about half of the counties sell tax lien certificates.
The government has the authority to not only sell tax lien certificates, but they have the authority to seize, confiscate, and sell those properties for the back taxes. These auctions are called tax defaulted auctions, or they’re called tax lien certificate auctions. It depends upon which auction you go to.
If you’re comparing a tax lien and a tax deed, then with a tax deed, you’re going to get a property that will come with a tax deed. With a tax lien, you’re buying a piece of paper that allows you to earn interest. You can’t evict the people. The property owner stays there. You have no right to that property until the redemption period expires.
When you buy a tax lien certificate, you’re just pretty much guaranteed that you’re going to get a high interest rate. Purchasing a tax lien usually means you’re going to hold a certificate for two to three years.
What Are Over the Counter Tax Liens?
If it’s a tax lien certificate and they can’t sell it at auction, they’ll attempt to do it again and again, meaning they might try to sell it at two or three auctions.
If they can’t sell it, what are they going to do with it? The county is going to take it off the regular auction list and put it on a special list of tax lien certificates, then anybody who wants to can go to the county and buy the tax lien certificate over the counter.
What does over-the-counter mean? The counter is just a big long desk that separates the people who are working for the treasurer and the public. They could bring a tax lien over to the counter and sell it to you. Anybody could buy over the counter tax liens in Arizona, and what would you pay?
You’d pay the same back taxes that you would at an auction, except now there’s no bidding going on.
Tax Lien Interest Rates by State
1,500 different counties will sell tax lien certificates. What do tax liens pay? You can earn 16%, 18%, 24%, or even 36%. All states pay different amounts. In Arizona, it’s 16%, Florida is 18%, and it’s 24% in Iowa. Different states have different rules and different amounts that they pay.
You can either get issued a tax lien certificate, which means you’re just buying a piece of paper to earn interest, or you can go to an auction, buy a tax-defaulted property, and you would get a deed to the property.
In one case, you get a deed. In the other case, you get interest on your money. In both cases, if those certificates or deeds are not sold at auction, the county will try again and again to sell them. If they can’t sell them, they take them off the regular auction list and put them on another list, but they’re always at the local county.
How to Find Tax Lien Certificates Sold Over the Counter
What do you ask for when you go there? You just want to buy tax liens or tax deed properties that didn’t sell in the last auction. Don’t make it complicated. Just tell them what you want. They can have all kinds of different names for them. Don’t worry about the different names. Just say you want to buy tax liens that no one bid on, then the county will give you a list.
It could be a long list and could have hundreds or thousands of tax liens on it, then you can look at the number of the property and research it. You would want to check the condition of the property and if are there any defects in the title?
In other words, you would do what we call due diligence because this is a tax defaulted property that someone else didn’t want and walked away from. Could it be used and abused? Plan on that. Could it be junk? You don’t want to buy junk. You want to buy properties that could just be cleaned up and resold.
The point is, you can buy over the counter tax liens in Arizona and in any state that sells tax liens. People buy them over the counter all the time, and you want to learn how to do that. Most people don’t reveal this information because they don’t completely understand it.
The county is going to try to re-auction all the time. Once they stop the re-auction, they’re going to have it at the county, you’re going to be able to go there and buy it over the counter.
How to Make Money on Tax Liens
In this business, you make your money when you buy. If you can buy over-the-counter property for 10 or 20 cents on the dollar, that would be a pretty good deal.
What if it’s a tax lien certificate, and the people never come in and pay the tax? Property tax is usually only 1% or 2% of value, so you’re not going to put up very much money to buy a tax lien certificate.
What if they don’t pay it in a subsequent year and you kept paying it? If they don’t pay it, you’re going to end up with that property. Now, does that really happen? Let me show you what can happen, really happen. I’ll do that now.
A $169,000 Profit From an Over the Counter Tax Lien in Arizona
Shortly after this young couple finished their training, they decided to buy tax lien certificates. Before they bought the certificates over the counter, they looked at the number and went out and inspected the property. What did they find? A property that was in a large development of condominiums, all sitting on a huge lake. A lake in the middle of Phoenix, Arizona is pretty good property, I can tell you that.
It was less than 10 years old and in good condition so they paid the taxes over the counter. Then they paid the subsequent taxes and invested $7,000 in total taxes.
The property owner never came forward to redeem the property. They took the defaulted property to the judge, and the judge said, “Well, you own the tax certificate, and if you don’t get paid on the tax certificate, you get the property,” and they got the property, which they sold for a $169,000 profit.
Let me review the numbers. They paid $7,000 in delinquent taxes on the tax certificate. The people never came in and redeemed it, so they ended up with the property. Once they had the title to the property, they sold it and made $169,000. That’s just from one over the counter tax lien in Arizona. How many deals like that would you have to do in your lifetime to be happy about it?
This works for anybody who wants to do it, but don’t kid yourself. This is a business that you have to work at. In order to make big money, you need to follow a very specific system, and that’s exactly what we teach here.
Conclusion
We hope you enjoyed Ted’s lesson, “How to Buy Over the Counter Tax Liens in Arizona.”
Buying over the counter tax liens in Arizona is not complicated. Tax lien certificates that don’t sell at auction will eventually end up on a different list at the county. You can just go to the county, ask for the list, and purchase the certificates right there over the counter without having to do any bidding.
Before you purchase over the counter tax liens in Arizona, be sure to do your due diligence. There may be a very good reason why a property didn’t sell at auction. So be sure to do your research on the property before you buy.
If you’d like to learn how to reap huge rewards from tax delinquent property investing, Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, and personal coaching with certified coaches.
Get started today by taking advantage of this Free Gift from Ted. Act now, it costs you nothing and will give you a big head start!
Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.
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