Hello Rogue Investors,

This might be the quickest year I have ever encountered. Would you agree? I can’t believe that Christmas just passed and the New Year is fast approaching. We even managed a true White Christmas where I live.

As always, I want to give you a gift. I am working on a 2010 Report for California Tax-Defaulted Properties. This newsletter contains most of the same information, especially the good parts, so please read on if you are interested in California tax sales.

Here is the information that will prepare you for the upcoming sales in California.

Summary of California Tax-Defaulted Sales

California is authorized to sell tax lien certificates (18%), but no sales have been conducted. At least one county has considered having a tax lien sale. Instead, California uses the tax deed process. State law refers to their process as Tax-Defaulted Land Sales.

After five years of tax-defaulted status, defaulted properties become subject to the "Power to Sell." These properties may be sold at future auctions, unless redeemed for the full taxes, penalties, and other associated costs.

Note to Governor Schwarzenegger: If you want to help rescue the local county governments, switch to tax lien sales and you will have investors from all around the world paying local government taxes. Not only that, you won’t have to wait out a five-year process to recover taxes that haven’t been paid. It would be one year. Maybe there is a position in the administration for Tax Lien Czar of California.

Okay, back to California sales. Unfortunately, state law does not allow for an over-the-counter process so you cannot buy tax-defaulted properties through the mail. Here’s another change I would recommend to the Governor.

You should know that many sales are now held through Internet auctions. One of the primary vendors responsible for handling the sales is a company called Bid4Assets (www.bid4assets.com). I have worked with Bid4Assets for many years and I have found their service to be very reliable.

For many years California tax sales frustrated me because investors were willing to bid the values of properties to retail or even above retail. That was crazy, because as you know you can’t look inside a tax sale property and the deed is not clear for at least one year due to California’s one-year legal challenge period. The legal challenge period is a safeguard for homeowners in case the sale was not conducted properly or all owners were not notified. Of course, this is not an easy process and must be done through the courts. In the event of a successful legal challenge, the investor has to be compensated for what she paid, but improvements may not be reimbursed.

During this one-year challenge period you are still the owner and you have rights of occupancy, rental, even sales through a contract for deed. However, you will not be able to get a free and clear title until this period is over or you quiet the title.

The legal challenge period is not a right-of-redemption period, so please don’t confuse that with the right-of-redemption process that occurs in some other tax deed states like Texas and Georgia.

Now, times are changing, and with record numbers of foreclosures in California sales are better than they have been in years and I expect 2010 to be even better.

Our rating for California has been 3 out of 5 stars; however, I would consider bumping that up to 3.5 or even 4 stars depending upon how 2010 sales shape up. I suspect they will be much better this year.

Tax-defaulted sales occur year round and according to state law each county must conduct a sale at least once every four years. State law dictates that the minimum bid for property offered at a public auction tax sale be an amount not less than the total amount necessary to redeem the tax default, plus cost. An exception is when property interests have been offered at a previous sale and no acceptable bids were received. Pursuant to Section 3698.5(c) of the California Revenue and Taxation Code, the Tax Collector may offer that property or property interest at a minimum bid that is less than the amount of the tax default, plus cost.

California conducts a great number of tax deed sales, with more than 10,000 individual parcels sold every year. California is an above average tax deed state. In most cases you will need substantial capital to bid on properties since property values are so high. Be careful not to overbid on properties at highly competitive auctions. Do your research, stick to a number that provides safety and don’t budge.

I am not comfortable paying more than 75% of the true market value and my goal is 50%. That provides me with a nice safety factor and a good deal.

Property tax collection information is available on the website of the California State Controller’s Office. Counties must notify the State Controller's Office not less than 45 days nor more than 120 days before a proposed sale. As notifications are received, they are posted on the California State Controller's website.

This is convenient to note because you only have one link in the entire state to check for upcoming sales, rather than looking at individual counties like I have to do in my own state of Kansas.

Upcoming 2010 Sales

COUNTY	SALE DATE(S)	PARCELS FOR SALE
Imperial Bid4assets.com (760) 482-4301	2/13/2010	297
San Benito Bid4assets.com (831) 636-4034	2/23/2010
Kern Bid4assets.com (661) 868-3424	2/22/2010 - 2/24/2010	781
Riverside Bid4assets.com  (951) 955-3900	2/23/2010 - 2/24/2010	200
Stanislaus Tenth Street Place County/City Administration Building 1010 Tenth Street, Board Chambers Modesto, CA 95354 (209) 525-6388	2/24/2010	49
Shasta Shasta County Administration Center 1450 Court Street, Room 263 Redding, CA 96001 (530) 225-5511	2/26/2010	32
Amador Board of Supervisors' Chambers Amador County Administration Center 810 Court Street Jackson, CA 95642 (209) 223-6364 TaxCollector@co.amador.ca.us	3/10/2010	9
Riverside Riverside Convention Center 3443 Orange Street Riverside, CA 92501 (951) 955-3900	3/16/2010	354

Don’t forget the upcoming Sedona, Arizona Tax Lien and Tax Deed Workshop:

On February 6 - 8, 2009, Rogue Investor is hosting its Super Investor Tax Lien/Tax Deed Workshop 2010 in Sedona, Arizona. Join us in Sedona for some of the most beautiful real estate in the world. We will be focusing on online auctions coming up in Arizona and California. Arizona is a tax lien state and California is a tax deed state, so you will learn how to invest in both. And why not learn how to invest from the comfort of your home through online auctions and over-the-counter sales (in the case of Arizona)? For 3 days you will learn about tax liens, tax deeds, self-directed IRAs, 401ks, asset protection, small business and real estate funding and credit. Together we will learn in the class, in the field looking at actual properties, at the county offices and on the computer. I promise you will not find a more hands-on class. I only teach about 3 to 4 workshops per year so if you are interested, consider it now as your 2009 Tax Deductible gift to yourself or your business partner. Last year we had a great time! I even throw in a wine and cheese networking party. This year we will plan on watching the Super Bowl together for any fans who attend.

Details on the Super Investor Workshop in Sedona may be found at:

http://www.rogueinvestor.com/tax_lien_course.html or call 1-913-381-4520.

I hope to see you there!

Happy Investing,

Michael Williams
1-913-381-4520