It you are a tax sale bidder in Baltimore City this is the time of year that tax sale redemptions start coming in. I recently started receiving my interest payments from the 2010 tax sale. Four properties have redeemed so far. I am disappointed because two of them were vacant 3 unit buildings. I would love to acquire some small multi-unit buildings via the tax sale.
Baltimore City is Slow
The city is slow getting out the checks. The first check I received worked out to 10 days worth of interest. However it took them 40 days after they received payment to write me my check. Eighteen percent my ass! Because of the delay in getting my check my effective interest rate was only 3.5%
How Much Interest did I Get?
The first check was dated July 6, 50 days after the auction. Two properties redeemed. I received $4.51 in interest on one of the and $17.84 on the other. Tax sale sounds great – 18% interest! But 18% interest for only 10 days doesn’t add up to much. So far to date I have received $47.12 interest. I won’t get rich on that but it’s enough to buy Sushi. Hmm, that reminds me I owe my buddy Craig Fuhr a sushi dinner.
Tax Sale is a Numbers Game
Like so many things in business and life, tax sale is a numbers game. You are not going to get rich by earning $15 interest on 1 lien. However if you have a portfolio of liens many of them will not redeem for some time and the interest can really add up.
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Happy investing,
Ned
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1 response so far ↓
1 Yury // Apr 14, 2011 at 12:48 pm
Ned, good to see you’re blogging again!
I came across this post and wanted to follow up on the results of your last year’s B.City bidding (i.e. how many liens bought, how many redeemed within X months, how many foreclosed on) .
thanks!!
Yury