Correctiongreenspun.com : LUSENET : A Village Commons : One Thread
In the interest of accuracy I'd like to note an error I made in an earlier post. The post was titled "Going to a tax sale" and was dated 9-13, for anyone who wants to read it first.
I had stated that on a tax sale certificate purchase here any party who later wanted to redeem the property had to pay a 10% premium of the amount of the tax bill if redeemed within six months and a 15% premium of the amount of the tax bill after six months plus 10% APR on that amount plus any overbid amount. That is not correct.
The 10% and 15% premiums are correct but the 10% APR return applies to the overbid amount ONLY. In my case, that means I would receive either 10% or 15% of the tax bill depending on the date of redemption plus 10% APR on the $35,000+ by which I overbid the amount of the tax bill.
Essentially, if someone redeems the tax certificate today I earn something just over $400 on the whole deal. If it's redeemed at six months, I'd earn the same $400+ along with something over $1800 in interest on the overbid for a total of something over $2200. One day later, the $400+ becomes $600+ and the total bumps up to something less than $2500 because the premium changes from 10% to 15% (adding a bit over $200).
If the certificate is redeemed on the last possible day the $600+ on the tax bill itself remains the same but the interest on the overbid becomes something over $3700 for a total return of around $4400 for the year.
As I'd said in the original 9-13 post, my situation is different than most tax sale certificate bidders in that I bought this particular tax sale certificate in order to protect my already established interests in the subject real estate.
The smart money (in terms of return on investment) went for tax certificates on properties which could be acquired for little or no overbid. With no overbid, the premium at day one through day 182 is a flat 10% with the APR STARTING at over 9 1/2% and going up from there. At day 183 the premium becomes a flat 15% with the APR ranging from just over 14% to in excess of 28 1/4%.
I apologize for the 9-13 error and hope this clears up any misconceptions created from it. All I can say by way of explanation is I was totally new to this and didn't read the information I had as carefully as I should have. While a reason, it's certainly no excuse. ;o)
-- Gary in Indiana (firstname.lastname@example.org), September 17, 2001
Gary...R e L a X. We all post things and make mistakes. It's ok.
Check your e-mail. :o)
-- Kenneth in N.C. (email@example.com), September 17, 2001.