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Arizona Tax Lien FAQs

IMPORTANT: While the following frequently asked questions will help you better understand Arizona Tax Liens, to ensure you only buy tax liens that will give you a great ROI and not cause you serious time-consuming financial problems, be sure to get the education you need.

Q: What is an Arizona Tax Lien?
A: An Arizona Tax Lien is a lien imposed on property by the local county government to secure payment of delinquent taxes owed on real property or personal property.
 
Q: What is an Arizona tax lien certificate?
A: An Arizona tax lien certificate is the first lien on the real estate. When a property owner doesn't pay his property tax, the local county government puts a lien on it. Those liens are sold as tax lien certificates to investors.
 
Q: How much do Arizona Tax Liens pay?
A:

Arizona Tax Liens provide up to 16% interest (pro-rated monthly) and the opportunity to foreclose on the tax lien and sell the property at a substantial profit.

If the property owner pays off his back property taxes, he is required to pay a 16% late fee (pro-rated monthly) that is then passed on to you, the investor.

If the property owner fails to pay off his property taxes within three years, you, the tax lien certificate holder, have the right to foreclose on the property and sell it for a substantial profit.


 
Q: How do I acquire the tax lien certificate on a property?
A:

Step 1. Buy the latest Arizona Tax Lien List.

Step 2. Research the tax lien lists using the tools and due diligence taught in the Intermediate and Advanced Education section of our website.

Step 3. Use our tax lien investing tutorials to get a basic understanding of where the property is and what it looks like.

Step 4. Purchase the tax lien certificate in the yearly auction (typically in February) or after the auction, when typically over 60% of the tax lien certificates remain. Learn more about buying at the auctions and post-auctions in the Intermediate and Advanced Education section of our website.

Learn more on how to buy tax liens.

 
Q: When is the yearly tax lien sale?
A:

Arizona tax lien sales are held every year in February. Many institutional investors purchase at these tax lien sales, but the majority of our customers prefer to buy their tax lien certificates after the auctions. Learn more below.

 
Q: Should I buy tax lien certificates at the yearly auction in February?
A:

You can if you want to, but we don't know why you would.

At the yearly tax lien certificate auctions, investors from around the world bid down the tax lien certificates they want. Instead of receiving 16% interest, some investors (such as institutional investors with millions to invest), will bid down properties to 3% or 4% interest!

There are always so many left over tax lien certificates after the February auction, we don't know why anyone in their right mind would purchase tax lien certificates at the auction. Why make 3% or 4% when you could make 16%?

Instead, most of our customers purchase the latest list they want after the auction, do the necessary due diligence from their computer, and then purchase the tax lien certificates they want through the mail.

 
Q: When is the best time to buy Arizona Tax Lien Certificates?
A:

Anytime you want to make 16% or more on your money is a good time to buy Arizona Tax Lien Certificates.

Every year new tax lien lists comes out with hundreds and thousands of delinquent properties to choose from. That list shrinks over time, but even by the end of the year there are still hundreds, if not thousands, of properties to choose from.

In fact, some investors purposely wait until after the yearly auctions in February so they can buy them without competition that drive the ROI down from the usual 16%.

Learn which strategy is best for you in the Intermediate and Advanced Education section of our website.

 
Q: Once I acquire a tax lien certificate, what do I do with it?
A:

When the property owner eventually pays his property tax, the county will redeem your tax lien certificate by sending you a check for your tax lien certificate purchase price plus the 16% interest pro-rated on a monthly basis.

If the tax lien property owner does not pay off his tax liens off within three years, you have the right to foreclose on the tax lien and sell the property at a substantial profit.

 
Q: Do I need to travel to Arizona to buy Arizona Tax Liens Certificates?
A:

No, you do not need to travel to Arizona to buy Arizona Tax Liens. In fact, you can do all your due diligence from any computer in the world with an internet connection.

 
Q: Which Arizona Counties are the best to buy in?
A:

Most people like to buy in Maricopa County, which contains Phoenix, Scottsdale, Chandler, Gilbert, Mesa and many other well known cities.

However, sometimes its best to go where no one else is such as Mohave County, which contains beautiful Lake Havasu City!

Learn which strategy is best for you in the Intermediate and Advanced Education section of our website.

 
Q: Will I make a full 16% if the owner pays his late property taxes before the end of one year? Will I make 16% every year until he pays his property taxes? Even 5 years?
A:

Delinquent property taxes accrue interest at an annual rate of 16% simple interest prorated monthly.

As an example, if the owner pays his delinquent property taxes 6 months after they are due, you will be reimbursed for the property taxes you paid, plus 8%.

If the owner pays his delinquent property taxes 1 year and 6 months after they are due, then you will receive a full 16% on the first year and an additional 8% on the second year.

If the owner pays his taxes after 5 years, you will make 16% every year for five years, which will result in you making 80%!

 
Q: How do I know what a property is worth to determine what my profit will be when I sell it?
A:

The best way to determine the value of a property is to use the Electronic Appraiser service.

We have tried several different online valuation tools and find Electronic Appraiser to be the best. It will not only tell you the value of the property, but also what like kind properties have sold in a one-mile square radius in the last six months.

 
Q: What happens in the event there is still an outstanding loan on the property? In the event of foreclosure who is responsible for the remaining balance/pay off of the note(s) on the property & are you able to still foreclose (after said time period) on the property regardless of the status of notes/monies owed on the property?
A:

There are two ways to answer that question:

1. If the homeowner doesn't pay his mortgage and the bank forecloses on him, then the bank will pay off his other liens when they take it back and put it up for sale with a Realtor. This includes the property tax lien certificate you own. You'll get your initial investment and the 16% (pro-rated monthly) in interest owed.

2. If you foreclose on the tax lien, then all other liens are typically wiped out as property taxes take precedent to almost all other liens.

They work this way because the government ALWAYS wants to make sure it gets paid. Any mortgages that existed on the property are typically wiped clean when the property is transferred into your name. Those mortgages will still be owed by the homeowner, it's just that the property they were tied to, is no longer his to use as collateral.

But don't just take our word for it, be sure to do your due diligence first as detailed in the Intermediate and Advanced Education sections of our website.

 
Q: How else can I get Arizona Tax Lien Lists?
A:

You can also get the Arizona Tax Lien List for the County you want to invest in, by contacting the County's Tax Assessor's office.

They will ask you to mail in a check (typically for $39.99 to $99.99 depending on the county). Once they have received your check and it has cleared (2-3 weeks), they will mail you your list. Total time required to receive the tax lien list is typically 6-8 weeks.

Or you can order them online from us. We typically charge less than the county tax assessor's office does and you can download them immediately, online. We update our lists on a quarterly basis to make sure you always get the freshest list.

 
Q: What is the most important thing to look for to make sure you buy the best tax lien certificate?
A:

That's a tough question to answer as it depends on where your interest and experience lie.

Some people prefer purchasing tax lien certificates on raw land as they're easy to acquire. Some prefer single family homes as they're the easiest to flip. Some prefer commercial property as they know how to rent them out for a great cash flow.

Which ever type of property you choose to focus on, the most important thing to remember is to do your due diligence on the property you want to buy the tax lien certificate on.

The due diligence on each type of property is different so your best bet is to get the education you need to make sure you're buying a great tax lien certificate that you'll be sure to make a great profit off of.

To that end, I highly recommend you get the due diligence education that will ensure your safe investments and maximum ROI. Please see the Intermediate and Advanced Education sections of our website for more details.

 
Q: Where can I find the laws that govern Arizona Tax Liens?
A:

The Arizona Revised Statutes that pertain to the tax liens are available online at Title 42, Chapter 18, beginning with Article 3.

You can also find them at the Maricopa County Law Library, 101 W Jefferson Street, Phoenix AZ 85003, Phone 1-602-506-3461.

 
Q: Are Arizona Tax Lien Certificates transferable?
A:

Arizona Tax Lien Certificates may be transferred by completing an endorsement form and paying the applicable fees. Learn more in the Intermediate and Advanced Education sections of our website.

 
Q: What is the "life" of a tax certificate?
A:

Arizona Tax Lien Certificates are dated as of the date the purchase was made.

Ten years later, if the purchaser has taken no additional action to foreclose the tax lien, the lien expires and is voided. No payments will be made to the purchaser. A purchaser may initiate a Judicial Foreclosure action after three years from the initial purchase date.

Learn more in the Intermediate and Advanced Education sections of our website.

 
Q: What happens if the property owner declares Bankruptcy?
A:

Bankruptcy rulings may also affect the interest rate on your tax lien certificate. Learn more in the Intermediate and Advanced Education sections of our website.

 
Q: Once I buy a Tax Lien Certificate, do I have to buy the tax lien certificate on that property every year after that until I can foreclose on the property or is it a one time purchase?
A:

You only need to purchase the tax lien certificate for one year. After 3 years, you can then foreclose on the tax lien. When you foreclose on the tax lien, you will need to pay any additional back taxes that are due.

As an example, if you buy the tax lien for 2003 in 2005 and by 2008 the owner does not pay his back property taxes, you can foreclose on the tax lien and pay any additional back taxes that may be due.

If the owner did not pay his property taxes in 2005, then it’s likely that he did not pay them in 2004, 2005, 2006, 2007 and 2008, so you may need to pay those too. You can pay for those (plus the additional 16% late payment) at the time of foreclosure.

You can learn how this works in greater deal in the Intermediate and Advanced Education sections of our website.

 
Q: If the property I acquire the tax lien certificate for has a fire and is completely damaged, do I still get my initial investment plus interest?
A:

If the owner pays his property tax, then yes, you would get your initial investment plus interest.

If the owner does not pay his property taxes, then you could foreclose on the property and then sell it for a far superior ROI (even in its damaged condition).

 

Foreclosure Questions

 
Q: What is the foreclosure procedure?
A:

42-18201. Action to Foreclose Right to Redeem; Applicability

A. At any time beginning three years after the sale of a tax lien, but not later than ten years after the last day of the month in which the lien was acquired pursuant to section 42-18114, if the lien is not redeemed, the purchaser or the purchaser's heirs or assigns, or the state if it is the assignee, may bring an action to foreclose the right to redeem.

The action to foreclose the right to redeem shall be filed in the superior court in the county in which the real property is located. If any applicable law or court order prohibits bringing an action to foreclose the right to redeem, the limitation provided herein shall be extended twelve months following the termination of such prohibition.

B. This section applies to liens purchased from and after August 22, 2002.

 
Q: If I buy a tax lien certificate dated the year 2003, do I still have to wait 3 years to foreclose on it, or can I do it right away if the redemption period is 2006?
A:

If you buy a 2003 Arizona tax certificate in 2006, you still have to wait three years before you can foreclose on the tax lien.

Be sure to do your due diligence first though, as detailed in the Intermediate and Advanced Education sections of our website, to ensure you know what you're doing.

 

Non-US Citizen Questions

 
Q: Can anyone purchase Arizona tax lien certificates? Even non-U.S. citizens?
A:

Anyone can buy Arizona tax lien certificates. No matter where you are from. In fact, buying tax lien properties is such a lucrative investment, that around 20% of all tax liens are purchased by investors outside the US.

As a non-US citizen, you can purchase tax liens from Arizona and collect the 16+% the same way an American citizen can. The steps are all the same as detailed in the Intermediate and Advanced Education section of our website.

 

List Questions

 
Q: How often are your Arizona Tax Lien Lists updated?
A:

We update our tax lien lists on a quarterly basis, by our representatives physically located in each county, to make sure you always get the freshest lists available.

 
Q: I don't have MS Excel on my computer. How else can I open the tax lien list Excel files?
A: Google has a free web based excel tool you can use to view excel sheets. See Google Docs & Spreadsheets for more information.
 

Purchase Questions

 
Q: I don't have a PayPal Account. How else can I buy Arizona tax lien lists?
A: You don't actually need a PayPal account to buy our lists. When you are sent to PayPal to pay for your purchase, click the "Continue" link next to the text "Don't have a PayPal account? Use your credit card or bank account. Continue." On the following page you can use your credit card or bank account to pay.
 

Account Questions

 
Q: How soon after I purchase a tax lien lists will I receive it?
A:

As per the email we sent you at the time of your purchase, you can immediately download your tax lien list by following these three steps:

Step 1. Login to your account at
http://www.arizonataxliens.com/store/index.php?main_page=account.

Step 2. Under your previous orders, click the VIEW button.

Step 3. Then, click the DOWNLOAD button.

 
Q: How long will I have to download my tax lien lists?
A: You have 30 days from the time of purchase to download your list.
 

Tax Lien Removal Questions

 
Q: How do I remove tax liens from my credit report?
A:

Removing a tax lien from your record is VERY hard, which is why it is best to work with the #1 tax lien removal firm in the industry: Lexington Law Firm.

Remove Negative Items From Your Credit Report

Lexington Law specializes in removing tax liens from credit reports so you can get your credit scores back up to where it belongs. Let Lexington Law improve your credit score!

 
 

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