2012 tax lien sale - Home - Weld County · PDF file · 2016-12-06According to the county treasurers I interviewed, 98% of all tax lien certificates are paid off by the property owner

Presented byPresented by

John LefebvreJohn LefebvrePresented byPresented by

John LefebvreJohn Lefebvre

Weld County TreasurerWeld County TreasurerPO Box 458PO Box 458

Greeley, CO 80632Greeley, CO 80632

Weld County TreasurerWeld County TreasurerPO Box 458PO Box 458

Greeley, CO 80632Greeley, CO 80632y,y,(970) 353(970) 353--3845 x32903845 x3290

http://www.co.weld.co.ushttp://www.co.weld.co.us

y,y,(970) 353(970) 353--3845 x32903845 x3290

http://www.co.weld.co.ushttp://www.co.weld.co.us

Weld County Treasurer John Lefebvre

PurposePurpose

Explain tax lien salesDispel mythsDispel mythsPresent risksD ib h iDescribe the opportunity


ScopeScope

What is a tax lienHow and why it is soldHow and why it is soldHow can you profit from themWh h i kWhat are the risksHow does the investor get their money back


Treasurer’s DutiesTreasurer’s DutiesTreasurer s DutiesTreasurer s Duties1) Collect property taxes ($386 million)) p p y ( )

2) Disburse funds to 300+ underlying districts

3) Invest the difference ($100 to $200 million)

• The underlying tax districts, as well as the county, depend on full tax collection each year.

Selling tax liens helps meet that goal


According to the county treasurers I interviewed, 98% of all tax lien certificates are paid off by the property owner within two years. What if the property owner doesn't pay the taxes and redeem the certificate???

This could be your change to win the lottery!! If the property owner doesn’t pay the taxes, then your attorney, with the help of the county government can perform a foreclosure You'll own the property for only the taxes and aThi I Th P f Ithe help of the county government, can perform a foreclosure. You ll own the property for only the taxes, and a small fee. The tax foreclosure wipes out (removes), Yes, clears all the mortgages off the property. You own it free and clear

EXPECT TO DOUBLE YOUR MONEYThis little known armored care safe investment pays two to three times what you can earn on T-Bills or CDs and more than twice what you earn on other government bonds. If your CDs are making 6% it will take 12 years to

This Is The Perfect Investment

double your money. If you owned government sponsored Tax lien certificates yielding 18% you could double your money in four years or less.

UNBELIEVABLE YIELDS! WHAT THE BROKERAGE HOUSES ARE

TERRIFIED YOU'LL DISCOVER… TAX LIENS WILL PAY YOU…

New Jersey, 18%. City of Baltimore, 24%. Florida, 18%. Michigan (year one), 15%. Arizona, 16%. Michigan, (year two) 50%. Iowa, 24%. Cook County, Illinois auctions 100,000 certificates every year. You can buy small certificates at $500 or spend $10,000, it's up to you.

This program is brand new and there is nothing else like it! Guidebook, National Directory, software - Cash Flow interest rate manual and software and 7 separate videos of the auctions plus access to our new exclusiveinterest rate, manual and software - and 7 separate videos of the auctions, plus access to our new, exclusive TAXSALE.COM Internet site and Tax Lien Strategies Newsletter.

FOR YOU…To duplicate the airfares, hotels and expenses to visit the auctions would cost well over $10,000. The manuals are professionally produced. Every page of the guidebooks were designed for easy understanding and readability. A professional computer graphic designer developed each page.p p g p g p p g

Thousands of hours were spent developing this comprehensive program, all to teach you on e of the most exciting investment opportunities I have ever seen. Adding together the research, editing, cover designs professional graphics on the guidebooks amounted to more than $30,000, plus the seven video shoots at $8,500 per session and you have almost $100,000 and that doesn't count my time. I have invested more than 2,000 hours of my time to learn how to be a tax lien expert.

If you see what a fantastic investment opportunity this is and recognize how small, inexpensive $842 investment

Pennies on the dollar

y pp y g pcould change your future, then call me today for a risk free trial.

My guarantee is simple. If you don’t think you'll make 10 times the cost of the course in the first year you own the program, that's $2970, simply send it back.

If it sounds too good to beIf it sounds too good to be true?

Tax liens can be good investments. This presentation acquaints you with the process in Colorado and

helps you make an informed decisions before you invest.decisions before you invest.

Tax LiensTax Liens• What are they?

They are liens placed against real property for the amount of unpaid taxes.

• Is this a way to acquire real estate?Is this a way to acquire real estate?No. We issue roughly 4 to 6 deeds each year usually on unimproved property.

• Is this a way to get rich quick?No. Be careful of misleading information.


Why Would Someone Let Why Would Someone Let Property Go To Tax Sale?Property Go To Tax Sale?

• Land developers use it as a line of credit

• Undesirable property that people don’t• Undesirable property that people don’t want to retain

• Inability to pay the taxes• Miscommunication on who is to pay p y

the taxes – usually in estate situations


Property Tax TimelineProperty Tax TimelineTaxes are collected in arrears

• January – The statements of taxes due are sent.

• February - First half taxes are due the last day of the y ymonth - if paying in installments.

• April 30 - Full payment due.p p y

• June 15 - Second half of taxes are due.

J 16 All id t d li t• June 16 - All unpaid taxes are delinquent.

• July - Delinquent properties are sent tax statements.


Property Tax TimelineProperty Tax Timeline

S b O b

• August - Endorsements

• September-October - All delinquent real properties are advertised in a local paper for purchase at the tax lien sale.

• Prior to December - Delinquent real property tax liens in Colorado are sold to investors at annual tax lien sales. This is the final ff ll d f h h ieffort to collect taxes due for each tax authority.

• The tax lien sale is generally held in November• The tax lien sale is generally held in November.


Tax Sale CertificatesTax Sale CertificatesT Y C tifi t V l R tTax Year Certificates

SoldValue Rate

2002 1276 $1 37 ill 10%2002 1276 $1.37 mill 10%

2003 1752 $1.76 mill 11%

2004 1689 $1.74 mill 12%

2005 1925 $1 78 mill 14%2005 1925 $1.78 mill 14%

2006 2480 $1.88 mill 15%


Tax Sale CertificatesTax Sale CertificatesT Y C tifi t V l R tTax Year Certificates

SoldValue Rate

2007 2429 $2 59 ill 10%?2007 2429 $2.59 mill 10%?

2008 3209 $4.25 mill 11%

2009 4032 $6.50 mill 10%

2010 1274 $3 84 mill 10%2010 1274 $3.84 mill 10%

2011 3915 $3.99 mill 10%


Redeeming CertificatesRedeeming Certificates

How are certificates redeemed?Owners pay the delinquent back taxes and interest due to the Treasurerinterest due to the Treasurer.

The tax lien certificate may be redeemed atThe tax lien certificate may be redeemed at any time until a Treasurer’s deed is issued.


Rate of RedemptionRate of Redemption

1 Month 7%1 Month 7%3 Months 22%

After 12 months over half of the certificates

6 Months 38%12 Months 64%

are redeemed.

24 Months 80%36 Months 90% -1 in 5 certificates are redeemed 36 Months 90%48 Months 96%

after just 3 months. - Depending on your bid, you

could LOSE money!could LOSE money!

PremiumsPremiumsPremium is the amount bid at the sale over and

above the tax lien.above the tax lien. NOTE: Premiums are not returned nor do they earn interest.

Premiums - How much to bid?

C l l h i illiCalculate the premium you are willing to pay before the sale. Know when to stop.


Return on a $1,000Return on a $1,000,,Tax LienTax LienBased on a

12% yearlyRedemption (Maturity)

12% yearly coupon rate

Premium 1 Month 6 Months 1 Year

$ $10%-$100

5% $50

($90)

($40)

($40)

$10

$20

$705%-$50

2% $20

($40)

($10)

$10

$40

$70

$100Weld County Treasurer John Lefebvre

2%-$20 ($10) $40 $100

Rate of ReturnRate of ReturnHow is the interest rate determined?

It i 9 t i t b th di t t• It is 9 percentage points above the discount rate on September 1st, to the nearest full percent, bringing the rate to 10% for this year

I it t t?

the rate to 10% for this year.

Is it constant?

• Yes - through the life of the tax lien certificate.g


Difference Between Rate and Yield

Yield is the total amount of true profit.

$1200 Taxes paid+ $50 Premium

$1200 Taxes paid+ $50 Premium

$120.00 1 yr. of 12% interest - $50.00 Premium$120.00 1 yr. of 12% interest - $50.00 Premium$120.00 1 yr. of 12% interest - $50.00 Premium$120.00 1 yr. of 12% interest - $50.00 Premium

= $1250 Total paid out = $1250 Total paid out

= $70 Net Amount EarnedResulting in a 7% Yield = $70 Net Amount Earned= $70 Net Amount Earned= $70 Net Amount EarnedResulting in a 7% Yield


Investment ExamplesInvestment Examples(Examples are based on a 12% yearly coupon rate and $1 000 tax lien)

November 8, 2005You buy the tax lien

(Examples are based on a 12% yearly coupon rate and $1,000 tax lien)

You buy the tax lienand pay a 5% premium $1,050.00.

November 12, 2005The property ownerThe property ownerpays the taxes and 1 month’s interest for a total of $1 010 It is possible to lose money if an owner total of $1,010.

You lost $40 in 4 days

redeems the tax lien before enough time has passed to recoup the premium.


You lost $40 in 4 days.

Investment ExamplesInvestment ExamplesNovember 8, 2005November 8, 2005You buy a $1,000 tax lien and pay a 5% premium, investing $1050.

August 2006The taxes remain unpaid andyou endorse (pay the second year).

In this second example, a profit is earned on a typical

t tiy (p y y )You now have a total of $2,050.00 invested.

transaction.

September 2006The property owner pays thetaxes for a total of $2,150.

The Treasurer’s office pays the investor. You made a profit of $100.


ade a p o t o $ 00

EndorsementEndorsement

Is the option for the current lien holder to buy the current year’s lien on the same

property prior to the tax lien sale.


Advantage ofAdvantage of Endorsements

• No need to pay a premium.

D i t t f d t d t• Draws interest from endorsement date (August) rather than from tax sale in O t b N bOctober or November.

• If discount rate drops, endorsing locks in p , ghigher rate from the earlier tax sale.


DeedingDeedingWhen to apply

A Treasurer’s Deed cannot be issued until after a minimum of three years from the date of the original t ltax sale.

Often, lien holders apply for deeds in September (prior , pp y p (pto the three-year point in November) after they endorse the third year.

The deed process takes approximately 6 months.


DeedingDeeding

Applying for a Treasurer’s Deed

Pay application fees in the Treasurer’s office.

Complete Deed application.


Costs Associated with Deeds

Deed Costs - $400 - Any remaining balance ( ll ll) i f d d(usually small) is refunded.

Included in the Deed Cost:Included in the Deed Cost:- Treasurer’s fee of $75- Owners & Encumbrances (reports

follow chain of title)- Notice to Parties- Plus advertising - usually $80+


Possible Additional Costs with DeedsPossible Additional Costs with Deeds

C t t i l d d th t ld b i d t• Costs not included that could be incurred to obtain a good title

S r e- Survey- Quiet Title - secures a clear title

• A Treasurer’s deed is NOT a warranty deed and can be contestedcan be contested


DeedingDeedingPriority of the Treasurer’s Deeds

A Treasurer’s deed is superior to encumbrances such as:A Treasurer s deed is superior to encumbrances such as:

• Mortgage Lenders• Judgement Creditors

• Mechanic Liens


Deed ProcessDeed Process

Receive Deed March 2013

Apply for DeedApply for Deed September 2012Endorse

Aug 2012EndorseAug 2011

Aug 2012

EndorseAug 2010

Aug 2011


BuyNovember

2009

Treasurer’s Deeds IssuedTreasurer’s Deeds IssuedYear Deeds Begun Deeds Issued2006 18 112007 7 12007 7 12008 13 72009 9 52010 24 132011 47 20


Investigate properties Investigate properties ffbefore investing!before investing!


Property InformationProperty Informationp yp y• Tax Lien Sale List:

http://www.co.weld.co.us/Departments/Treasurer/TaxLienInformation/index.htmlml

• Assessor’s Office:htt // ld /D t t /http://www.co.weld.co.us/Departments/

Assessor/index.html


Possible ProblemsPossible Problems

Contamination


Possible ProblemsPossible ProblemsMinerals


Possible ProblemsPossible ProblemsSpecial Improvement Districts -

SIDs


Possible ProblemsPossible ProblemsStrips


Possible ProblemsPossible Problems•Property Value Inaccuracies

Drainage ditch and is unbuildable.

New Unless broughtSubdivision

-

Unless brought to the Assessor’s attention, this lot

All lots valued at

a e o , s owill probably be valued at

Weld County Treasurer John Lefebvre$30,000$30,000

Registering as a Tax BuyerRegistering as a Tax BuyerWho can register?

Anyone except a County employee and theirAnyone except a County employee and their immediate families

Register with the TreasurergFor tax sale see web site


The AuctionThe Auction

• The Treasurer has discretionary power in

• Sales are FINAL! Know what you are buying

The Treasurer has discretionary power in conducting the sale

P h t b id f t th d f th l

Sales are FINAL! Know what you are buying remember “Caveat Emptor” let the buyer beware

• Buyer receives a Certificate of

• Purchases must be paid for at the end of the sale

Purchase


The Physical AuctionThe Physical Auctionyy• Tax liens are sold in property schedule number order to the highest bidder.

• The amount bid is OVER and above the tax lien andThe amount bid is OVER and above the tax lien and applicable fees. It is called a premium and is nonrefundable and does not earn interest.

• Determine the maximum premium you are prepared to pay prior to biddingare prepared to pay prior to bidding.


Important ConsiderationsImportant ConsiderationsppThis is notnot a way to obtain

real estatereal estate

• Tax liens are not a liquid asset, your money willTax liens are not a liquid asset, your money will be tied up for an unspecified amount of time

• Early redemption may result in a loss on your investment

• There is no guarantee it will be paid


Profit PotentialProfit Potential• Potentially high-yielding investment.

•After 3 years, the lien holder has the right to apply for a Treasurer’s Deed to the property.

You could end up owning the property!

• The interest rate is fixed for the life of the investment.


ConclusionConclusion• Tax Liens are an investment

You buy the lien not the property.

• Watch Out for the Pitfalls

You buy the lien not the property.

S i S S i OSevered Minerals, S.I.D., Strips, and Outlots

• Know what you are buying

S B Y Af Y

y y gBuy in a familiar location and investigate beforehand

• Same Buyers Year After YearMany buyers come back year after year.


20122012 T Li S lT Li S l2012 2012 Tax Lien SaleTax Lien SaleOctober 31October 31

Online, see web site forOnline, see web site forOnline, see web site for Online, see web site for detailsdetails


•Weld County Treasurer

•John LefebvreJo e ebv e

•[email protected]

•970-353-3845 x3290

•A special thanks to the Jefferson pCounty Treasurer’s office for their contributions to this presentation.


Documents

2012 tax lien sale - Home - Weld County · PDF file · 2016-12-06According to the county treasurers I interviewed, 98% of all tax lien certificates are paid off by the property owner