New Jersey tax sales are different from the tax sales in any of the other states. In a previous post, I covered some information about the online tax sales in New Jersey. If you want to know more about how the online bidding works for New Jersey tax sales you can refer back to that article at https://taxlieninvestingtips.com/?p=3900. In that article I talked about the fact that interest is typically bid down to zero and premium is bid for New Jersey liens, and the fact that you need at least $10,000 to bid in the these online tax sales. In this article I want to give some of the online tax sale results so you get a feeling for what investors are paying for tax liens in New Jersey and why you might want to forego the New Jersey online tax auctions in favor of other online tax lien auctions – like Arizona which is coming up in February.

We’re going to look at the results of 4 different   municipalities (in 4 different counties) that have had tax sales in the last few months:

Clifton City (Passaic County)

Evesham Township (Burlington County)

Ocean Township (Monmouth County)

Voorhees Township (Camden County)

In Clifton, all of the liens except 1 sold at premium. Don’t be fooled by the average interest rate of 18%, only one lien sold at interest at all, and my guess is that there is something wrong with the property because it only received the one bid at 18%. In Evesham Township there were 111 properties sold at the tax sale all were sold at premium except for 4. Two of them went for 18% and 2 at 3%. There were actually lower percentages bid on the 2 that sold at 18%, but the bidders had insufficient funds to pay for them. In Ocean Township there were only 76 tax liens in the sale and all were sold. Only 5 went at interest rates – 1 at 18% and 4 at 4%. The lien that went for 18% also had a 5% bid that was somehow not won, probably because the bidder had already met their budget. In Voorhees Township 232 out of 238 liens were sold and all were sold at premium except for 5. All 5 of the liens sold at an interest rate were gotten at 18%, but in each case a premium was bid, but the bidder had insufficient funds to complete the sale. (They exceeded their budget with other bids they won.)

The surprising thing about these online tax sales is that in three out of the four sales, all of the liens were sold. Even liens on unbuildable parcels of land were sold at the tax sale, which tells me that some of the bidders didn’t know what they were doing.  Another surprise is that high premiums were paid, not only for tax liens

but also for the smaller liens that are for utility amounts. In some of these tax sales investors paid over $1000 for small ($200-$500) utility liens. The problems with paying premiums for utility liens is that you only make 8% on your subsequent tax payments until the delinquent amount is over $1500 – then you get 18% on your subs. So if you pay $1000 to get a $500 lien and you pay subsequent taxes or utilities in the amount of $500 a year for the next 2 years – you’re only going to make 8% per year on sub payments and the 2% penalty on the certificate amount. You’ll only make $130 in interest and penalties after 2 years but your total investment is $2500, so your return on investment is only 5.2%.

If you want to find out about all the counties that have online tax sales, where and when they are, and how the tax sales are conducted – plus get training on how to register, do due diligence and bid at these tax sales, then check out the Buying Tax Liens Online course at www.BuyingTaxLiensOnline.com/main.html

Related posts:

From the Field: Tax Lien Investing in New Jersey Are You Bidding Premium For Tax Liens?