Welcome to another episode of Ask Al How.
This video is part of my series where I explain how Tax Sales are conducted in Each State. In this video I will discuss Arizona.
Arizona Tax Sales Facts:
Arizona’s got 15 counties and is a lien state. The maximum interest rate is 16% and they use a Bid Down Interest method for their auctions. Now Arizona has two different types of redemption periods. Three years in a judicial foreclosure in five years in a nonjudicial foreclosure.
The most important thing about Arizona Tax Sales is that the liens are not in first position. When you have to go in for close that is probably going to be an issue so due diligence is heavily advised. The auctions are in January and February. Interestingly, the life of the lien is 10 years one of the longest of any state however depending on the type of foreclosure you do you could do in foreclosure in 3 to 5 years. Arizona does allow over-the-counter sales at the county level and if you buy a lien there you’ll be guaranteed the full 16%.
While generally speaking Arizona would be a fine state to work in, the fact that I would not be in the first position scares me a bit. I like control. That also means I have to do a lot more due diligence to get properties that are going to be Unencumbered by a first lien such as a mortgage. Therefore Arizona only gets a three on a scale of 1 to 5.
Interested in Tax Sales in Another State?
Tax Sales investing is a niche that has the potential to be insanely profitable.
However, most investors do not have a deep understanding of this investing strategy.
Every state has a unique set of rules and regulations. There are some basic rules you need to understand as to how the process works. Generally, states will fall into one of three categories:
- Tax Lien States
- Tax Deed States
- Hybrid States
Hybrids are states who conduct their tax sales by selling tax deeds with a caveat. The deeds have a redemption period much like a tax lien certificate.
This map provides links to information for every state as well as Washington DC.