A Shameless Plug
Before we get started, let me go ahead and put a plug-in for my latest book, The Ultimate Dictionary of Real Estate Terms. If you want to invest in Colorado Tax Sales, you NEED this book! This book is the consummate real estate reference on the market today. I took great pains to make sure that it’s the biggest thing out there. 4300 terms defined over 250 pages. The closest thing that’s even similar is something like 2500 definitions. You can get it at Barnes & Noble or Amazon or something like 200 other retailers throughout the world for about 20 bucks. However, if you stick around with me until the end of this, I’ll tell you how you can get it for free. But of course not stick around to the end.
So let’s get into Colorado Tax Sales, shall we?
Colorado Tax Sale Facts:
Colorado has 64 counties and is a lien state. The state has a three year redemption period, and the official bid system is Premium Bid although some counties use a rotational bidding system. What’s interesting about Colorado is that their interest rate is 9% plus whatever the prime rate is set by the Federal Reserve. At the time of the writing of this particular video the Fed just changed the prime rate to zero so 9% is all you’re going to get at a maximum.
A little over 1/3 of the counties unions online auctions with either RealAuction.com or ZeusAuction.com. The rest are done in person. The timing for auctions is between October and December and while the state of Colorado has no official policy about over-the-counter liens most counties offer them. You have to check with the county are interested in.
The Most Important Thing
The most important thing to understand about Colorado is only the lien pay is interest. In other words if you buy a $2000 lien at 9% but you pay $2500 when it gets bid up, you are only going to receive interest from the $2000 not the $500 premium.
Overall a great state to pick up liens. Hint here – attend the in-person auctions in the more rural counties to avoid the competition from the institutional bidders. Although the interest rate is not so great, I still give Colorado a 3 out of 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.