Fourth Quarter 1996

This year's Jefferson County tax lien purchase was a bit disappointing in terms of overall purchases that we could make. A local bank came into the auction with almost $500,000 to purchase liens and was buying up almost everything in the criteria range that we had said that we wanted to purchase. The total tax liens available in Jefferson County this year was about $2.7 million. This company came in with the ability to buy over 20% of those. They were also not concerned about premiums that they were paying. Their average premium payment was around 11.3% as opposed to a total average last year of 6.5% of the premium. They were paying premiums as high as 18.2% on some properties. Many of these properties fit our purchase price criteria ($900 to $2,500 tax lien), however, since this fell out of the range of what we felt was a good premium to pay and would extend our break-even period to over a year, we did not even bid on most of these. The average premium we paid on properties was 7.3%. The average premium overall for the day was 7.9% (again, way up from last year).


The positive news about this is apparently the planning that we did and the areas that we were looking to purchase have been discovered by others who also think it is a good idea, and are looking into it. I have no intention of changing the upper limit of what we will pay for a premium on future purchases, though, I think it might be a good idea to explore other Denver metro areas and possibly participate in their tax lien purchases next year or to change the criteria to even higher valued liens. We had kept the value below $2,500 in order to purchase more liens, however, properties over $3,000 value on the lien (with only two glaring exceptions) were selling for an average premium of 7.6% of the value of the lien. This follow along with our estimations for purchases. A larger base investment than $30,000 (our target investment for this year) is indicated if we want to purchase these higher valued liens.


The following is a review of one property from last year and this year that we have purchased. I will keep updating you on the status of the properties as time goes on. I have kept the addresses out of these for privacy reasons, but all of the financial information contained here is completely accurate.

 Identifier

 Amount Due

Premium Paid

% of Premium 

  Endorsed

Return

 1995 #3  $487.94  $30.00  6.1 %  Yes  $176.15 (11.5%)
 1996 #7  $885.48  $65.00 7.34%   Not Yet  -$44.22 (-4.6%)


The taxes on the 1995 property almost doubled for 1996 endorsement. This greatly increased the dollar amount of the return and the average yield.

We will try to keep you updated on these properties and our other ventures on at least a quarterly basis.

Thank you for your time in reviewing this. If you have any questions or would like more information on Kaim Chigh, L.L.C. please call me at (888)323-1488 or (303)271-1288. You can also contact me at info@kaimchigh.com. This information and more about the organization is available at our Web Site www.kaimchigh.com/taxlien.html. If you are not interested in receiving this information please contact myself or my associate Karen Best and we will remove you from our mailing list.

Return to Investing In Tax Liens

For a copy of the full proposal please E-Mail your name and address to us.

or write:
Kaim Chigh, L.L.C.
PO Box 1417
Golden, CO 80402
or call:
(888)323-1488

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