The Baltimore City Tax Sale was held May 18, 2009. A total of 8569 liens were sold with a total face value of $20.8million. There were 172 bidders. 91 bidders had winning bids.
There were a total of 33,426 bids meaning about four times as many bids a liens awarded.
If you compare that to last year they sold 9026 liens for a face value of about $22.8 Million. Last year had 177 bidders of which 98 had winning bids.
The top bidders was #83 ETS Maryland LLC who spent $12 Million the day of the sale and was awarded 3670 liens. Runner up was bidder #87 Two Thousand Nine LLC at $9.3 million and was awarded 1501 liens. The top 10 bidders spent $33.6 million and won 7749 out of the 8569 liens sold that day.
The average effective return was 10.46%. The lowest return I saw was bidder 157. He’s earning a whopping 2.7% on the $37,000 he spent.
So what were Ned’s results?
My IRA is earning 17.37% on my winnings ! (more on investing with your IRA in a future post). I won 38 liens this year. Not quite as much as last year but I had less money to invest this year, so I’m happy.
I won 17% of the liens I bid on this year compared to 20% of the liens I bid on in 2008. This is a good thing. My bidding was more intelligent, lower bids but higher quality properties and higher interest rate returns.
Thank you!
A big thank you goes out the the interns that helped me this year. I hope those that inspected properties or those that just came to the intro meetings learned something that will help them in their investing.
What do the results mean to the small investor?
It was another year of the big guys dominating the auction. You’ve probably heard of the 80/20 rule, well in the Maryland Tax sale it is 90/10. The 90% of us small guys are fighting for 10% of the liens. While statistically the odds of winning a lien were 1 in 4 but I wouldn’t count on that kind of result unless you are willing to accept a very low return.
The results confirm what I have said before, this is not as easy as the late night infomercials make it sound, however if you are prepared you can do a decent job in this game even at a modest level.
Happy investing,
Ned
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13 responses so far ↓
1 Sire (53 comments.) // Sep 9, 2009 at 7:05 pm
It seems that no matter where you go the big guys always seem to get the premium slice of the pie. This isn’t surprising considering they have a lot more money behind them.
I wonder though if the smaller guy does a better job with whatever he has managed to acquire?
.-= Sire´s last blog ..Sometimes It just Doesn’t Pay Being Jack =-.
2 Ned // Sep 10, 2009 at 11:08 pm
>I wonder though if the smaller guy does a better job with whatever he has managed to acquire?
Yes Sire,
The big guys are “winning” more because they bid higher. The second highest bidder has an effective interest rate of about 5-6%, my effective interest rate is 17%. I am not sure he “won” 🙂
3 Sre (4 comments.) // Sep 11, 2009 at 12:57 am
I reckon I like your rate better Ned. Maybe you’re not getting as big as slice of the pie, but at least your enjoying your slice a whole lot more. 🙂
.-= Sre´s last blog ..Why I Don’t Comment On Blogger Blogs =-.
4 Ned // Sep 11, 2009 at 5:26 pm
Well Put Sire.
By the way for those of you reading along click through to Sire’s blog. One of the nicest guys on the net. If you enjoy blogging, reading and commenting on blogs I think you’ll like his.
5 Sre (4 comments.) // Sep 11, 2009 at 10:59 pm
Thanks Ned, appreciate the little plug mate. If you’re ever DownUnder I will shout you a beer.
6 Ken Holmes // Oct 9, 2009 at 8:13 am
Ned
How many properties as a percentage do you ever actually take title to? Just curious. Nice return.
7 Ned // Oct 9, 2009 at 11:19 pm
Ken,
Perhaps 15-30%. I bid mainly on vacant properties so I have better results than the average. Typically it would be more like 2-5% that get taken over. I still get surprised how many vacant abandoned properties redeem. When the market was stronger often a buyer would find the owner and work out a deal before I could foreclose. I expect to start getting more properties now that there are fewer buyers out there.
Thanks for reading, Ned
8 Ronald Starr // Oct 11, 2009 at 12:56 am
Ned–MD————
Thanks for the information. Buying properties at tax deed sales is my favorite way to buy. I’ve done a little lien investing, but not much.
I wish you well in your investing********Ron Starr*******
9 Ned // Oct 11, 2009 at 9:52 pm
Hey Ron,
Thanks for stopping by and Commenting.
10 Robert // Oct 29, 2009 at 11:14 am
What is the process once you “win”? Do you forclose and how does that process work? Also, if I put in a bid and lost, is there a way of tracking that tax certificate as it moves through the system?
11 Ned // Oct 29, 2009 at 9:05 pm
Robert, Thanks for stopping by, I hope to see you again.
Yes you need to foreclose. The foreclosure is a long process. It can take a year or more. There are a number of attorneys who specialize in this. The owner has to reimburse you for your attorneys fees if he or she redeems before the foreclosure is final.
You can track court cases by going to MD Judiciary case search
12 Craig // May 4, 2010 at 10:13 pm
I’m new to the site and the tax sale.
1. Where can I find the results from the 2009 tax sale that you are referencing?
2. After you buy the lien, what about other liens on the property (i.e. the mortgage)? If I bid on a lien and win for $6000, but the bank is owed $200,000 from the unpaid mortgage, do I have to pay this amount to the bank?
13 Ned // May 4, 2010 at 10:55 pm
Craig, welcome to my site and thanks for commenting. I hope you become a regular. I write a lot about tax sales.
1. The results from last year are at BidBaltimore.com. I am not sure but may have to be a registered bidder to download the results. If you only need one or two I would be happy to look them up for you.
2. No, The tax sale holder is in first place. If you foreclose you wipe out all the other liens. In the situation you proposed the bank would likely redeem (pay you off) because they don’t want their position wiped out.