Earn 18% interest

I have a limited number of tax liens for sale. These are Baltimore City Tax liens which accrue interest at 18%!  I am trying to raise money for this years tax sale and would be willing to let some of my current liens go.  Some have foreclosures started and I have an attorney ready to start work on the others.

Contact Us Now

Some of these certificates will expire soon if foreclosure isn’t filed. My attorney is ready to go. If you are interested reply to this post or use the contact us link near the to of the page.

Happy investing  – Ned

How does the mortgage holder get wiped out for a small amount of taxes.?

Because those are the rules!  It may not see fair but I explain in the video below

Now I Can Relax

Well it is 11:30 PM and I can relax.  Last year I was up all night entering bids so this is a welcome relief.  I just finished uploading 1200 bids for tomorrow’s Baltimore City Tax Sale.   Thanks to a joint venture with other investors, we have a pool of money that is 4-5 times what I have bid in the past, so this is significantly more bids  than I have ever done .  With the help of some interns and my partner we have inspected over 1500 properties.

A New Strategy

Working with a bigger pile of money has led to a new strategy.  In the past I have mainly gone after vacant houses, thinking this would increase the odds of getting a property.  I have hit a lot of home runs with that strategy.  Having more money to place means we must buy more liens. This has led to less stringent inspections and more bids on good homes.

Baltimore’s Tax Sale

Baltimore City’s tax sale is in 8 batches tomorrow all ending one hour apart starting at 9:00 AM.  This year 10,800 properties are going into the sale.  That is a couple of thousand less than last year.  Perhaps that is a sign the economy is getting better.

If you are bidding tomorrow good luck. If not wish me luck!

Ned

The Anne Arundel County Tax Sale is coming up soon.  The date is June 7th, 2011.  As many Maryland counties have done, their auction will be online this year.  The website is Anne Arundel County Tax  Sale.  Registration is now open and you must register by June 4 at 4:30 PM.

A list of properties is available now and bids may be submitted starting on June 1, 2011

Good luck and remember  – don’t bid too high!

Ned

Baltimore County Tax Sale

The Baltimore County Tax Sale is scheduled for June 2, 2011.   For the second year it will be held online at the Baltimore County Tax Sale Website.  To register you need to have a bank account that will accept an ACH debit.  It will cost $100 to register for the sale and registration must be completed by May 25, 2011 at 4:00 PM.

2900 Tax Sale Properties Listed

The tax sale  list has approximately 2900 properties but I suspect that will be a much smaller number by the time of the sale.  The sale will be held in four batches each ending  one hour apart starting at 10:00 AM the day of the tax sale.

Good Luck and remember the biggest risk in tax sale is bidding to high! !

Ned

Maryland’s High Bid Premium

Maryland uses a complicated system for their tax sale bidding called the “High Bid Premium” method.  This formula determines how much you pay the day of the auction as well as what your effective interest rate is.

High Bid Premium Determines Three key Amounts

Your bid at the Baltimore City Tax sale or most other Maryland tax auctions determines three key things.

1. How much you will pay for the property if you foreclose and get the property. This amount is only due, if and when a foreclosure is complete.
2. The high bid premium, this premium is added to the lien amount and due the day of the sale
3. Your effective interest. You only earn interest on the lien amount NOT the high bid premium.

The High Bid Premium Formula

The formula is, 20% of the amount of your bid, over 40% of the assessed value of the property equals the High bid premium.  If the bid is below 40% of the assessed value there is no high bid premium.  Presuming the bid is above 40% the formula can be expressed as shown here.

Bid amount – (Assessed Value X 40%) X 20%  =  High Bid Premium

That’s about as clear as mud, eh?

High Bid Premium Examples

Assessment $100,000
Bid amount $50,000
40% of assessment = $40,000
$50,000 – $40,000 = $10,000
$10,000 X 20% = $2,000 High Bid Premium

Assessment $155,000
Bid amount $70,000
40% of assessment = $62,000
$69,000 – $62,000 = $7,000
$7,000 X 20% = $1,400 High Bid Premium

Assessment $60,000
Bid amount $6,500
40% of assessment = $24,000
No High Bid Premium Due

High Bid Premium Graph

How the high bid premium affects your Rate of Return

The high bid premium is added to the lien amount to get the amount that is due the day of the sale.  You earn interest only on the lien amount, NOT on the high bid premium.  So a $500 lien with a $1,000 high bid premium reduces your effective return to 6%.  On a $5,000 lien, that same $1,000 high bid premium would make your effective interest rate approximately  16.4%.  That is a big difference. You need to understand the rules and how they affect you when bidding at tax sale.

You Get the High Bid Premium Back

When the lien is paid off (redeemed) you will get your lien amount, interest on the lien, and the high bid premium will be returned.  If you have a successful foreclosure the high bid premium goes toward the price you bid for the property.

Good luck and don’t bid too high.

Ned

It is Tax Sale Season

Yes it is tax sale season in Maryland.  Anne Arundel County, Baltimore County, Baltimore City, Frederick County, Howard County,  Prince Georges County, along with other Maryland counties are all having their tax sales in May and June.

How I Learned Tax Sale

I have learned from a variety of sources including the School of Hard Knocks.  But a key turning point for me was a chance meeting with Anthony Onwuanibe that I wrote about earlier here.

Learn Tax Sale Investing

Anthony has previously held a multi-day classes on tax sale investing however he has received feedback asking for a one evening class.  He will be offering a class Friday May 6, 2011, from 5:00-8:00 PM.  The price is $295.  Based on what I have made in tax sale I can tell you that that is a bargain.  Just as importantly if you are going to invest in tax sales you need to know the pitfalls to avoid.  That $295 can sale you a lot of hard earned lessons.

Readers of this blog Save $15.00

To sign up call Anthony’s office at 410-779-7040.  Just tell them that Ned sent you and you will get $15 off the price.

Prince Georges county has announced their tax sale for 2011.  Once again it will be held online.  The date is May 9, 2011. Important dates for the sale are at PG Tax Sale Dates. The most important date is coming up this Friday the registration deadline.

To register go to the PG county tax sale website.  Full instructions are on the site.  It is a non refundable deposit of $150 to register.  Good luck bidding and remember:

The biggest risk in tax sale is bidding too high.

Happy bidding,

Ned

Howard County has made a change for the 2011 tax sale. Traditionally their sale has been a live auction.  This year it will be held online at the Howard County Tax Sale Website.

The date is May 4, 2011.  Registration is open now and must be done before 4:30 EDT April 25, 2011.  To register prospective bidders must provide the county a $1,000 deposit via ACH debit of their bank account.

The interest rate for 2011 is nominally 18%.  Howard County uses the high bid premium method of bidding which can dramatically change your effective return.

Happy bidding

Ned

Tax Sale Attorney Anthony Onwuanibe

Anthony Onwuanibe was in the line at the tax sale office.

As he patiently answered questions from others in the line, I listened in. This guy really knows his stuff.  I took the opportunity to pick his brain with every question I could think of about tax sale investing.

He told me he was an attorney that handled tax sale foreclosures and offered to meet and answer even more questions.  This started our long relationship. A very profitable relationship.

Anthony handled my first first successful tax sale foreclosure transaction.  I made $30,000 on that one.
While that is not typical, it isn’t the only tax sale property that I have made 5 figures on.

Update – New Class See this Post

I have made a LOT of money in tax sale.

But Maryland tax sale investing can be tricky, especially in Baltimore City.  Now you can learn from the attorney that taught me.  Anthony is offering a class to learn all the ins and outs of tax sale investing. Three sessions totaling 6 hours on March 29th, April 5th and April 12th. Click here for the tax sale course outline. Quality education is never cheap but this class is a bargain for serious investors.  Only $975.00!      To Register Click Here

Readers of this blog save $50!

Because of my close relationship with Anthony he said I could offer my readers $50 off.  Your price will be $925.  Just mention my name, Ned Carey when registering and save $50!  Or click here for a special registration form.

Happy Investing,

Ned

PS: If you sign up, let me know what you think of the class.