GETTING STARTED WITH YOUR TAX LIEN CERTIFICATE AND TAX DEED INVESTMENT BUSINESS TED THOMAS The state of Colorado, on the other hand, uses a rotational bidding process. This means the bidders are all given a card with a number; the auctioneer will go around the room in order from lowest to highest number asking for bids. At some rotational bid auctions, the numbers are printed on ping pong balls and put into a big drum, much like you might see at a bingo game. Know the Rules Each county is different when it comes to auctioning tax lien certificates and tax deeds. They have specific rules and particular bidding procedures. There are many bidding processes, I’m only mentioning two in this tutorial. The bidding process at a tax lien certificate or tax deed auction varies. Two types are a reverse auction and rotational bidding. At a traditional auction, bidding starts with a minimum amount and each subsequent bid goes up; in a reverse auction, it starts at the high point and then goes lower. This type of auction is used in the states of Arizona and Florida. In Florida, the bidding is on an interest rate that starts at 18 percent. The interest rate gets progressively lower as the bidding continues and may go down to less than one percent. Dates and times vary widely amongst tax districts, too. For instance, the state of Texas sells tax defaulted properties every month. Texas counties sell tax deeds; however the deed has an encumbrance. Texas allows the property owners to pay the investor directly and redeem the taxdefaulted property anytime within 180 days. The owner must pay the amount of the defaulting taxes on the deed plus 25%, no matter the amount of days the debt has been outstanding. You could easily make a tidy profit in less than 30 days and that is why Texas is a popular state when it comes to tax deed investing. Obviously, there is a lot to learn about the particular rules imposed by each county and municipality but learning them forms the foundation of your business.