Bloodsuckers and bottom-feeders
November 9, 2007
ASPEN ” If you don’t pay your property taxes, beware: People are cueing up to pay them for you.
Every year in early November, the Pitkin County treasurer’s office holds a tax lien auction at the courthouse in Aspen. On Thursday, 28 buyers forked over more than $250,000 to buy back-taxes.
Investors can earn as much as 15 percent on any tax liens they buy. And, if they pay a homeowner’s taxes for three years in a row, on the fourth year the investor can take possession of the property in a tax foreclosure, county treasury officials said.
Dave Wyman and his wife, Nancy, have been coming to tax auctions in Aspen since 1994.
“We’re a bunch of bottom-feeding bloodsuckers,” Wyman joked.
An investor by trade, Wyman travels all across Colorado and Wyoming to tax lien sales. He uses the Internet to conduct title searches and even gets an overview of a parcel using Google Earth, he said.
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Wyman said it’s important to research properties, and said he’s bought the same lien on the same land for many years.
It’s the Internet that is changing the sale business, Wyman said, with counties all across the U.S. conducting auctions online.
But it’s the human element and the challenge of bidding with someone eye to eye that’s the draw, he said.
“You do it because it is interesting and it’s fun,” Wyman said, adding that the big-money breaks are rare. “It’s a crapshoot.”
The room went quiet Thursday when Tiffany Wancura, Pitkin County chief deputy treasurer, opened up the bidding.
She started with a round robin auction for unpaid taxes not in excess of $5,000. Wancura matched numbered bidders with numbered properties. Bidders could accept a property and earn 15 percent on their investment ” 1.25 percent for every month a property owner doesn’t pay taxes.
That means buying a $1,000 tax lien earns $150 in one year, Wyman said.
Taxes exceeding $5,000, or “premium” properties, go to regular auction, and bidders battle it out in $10 increments ” a risky investment if the homeowner pays up right away.
“I think it’s the best investment in the world for young people,” said Ray Poarch, a retired railroad worker from Grand Junction.
Poach was the top bidder Thursday, spending $118,000 on a handful of properties.
He warned about dangerous premium bids, saying, “I lose money all the time.”
But Poach paid some $8,000 in overbidding Thursday and said the county would probably “have a party” on the money he spent.
Overbid funds go to the county general fund, and this year’s auction earned $13,050.
Poach was surprised one year when he bought a tax lien on an Eagle County house owned by Goldie Hawn, he said. And he’s earned a number of tax foreclosures on properties across the state.
But in pricey Pitkin County, a tax foreclosure hasn’t happened in a long time, officials said.
Charles Agar’s e-mail address is firstname.lastname@example.org.