The Calhoun County, AL Tax Lien Sale: [The A-Z Guide]

If you’re looking to dip your toes into the world of tax liens in Alabama, specifically in Calhoun County, you’re in the right place.

I’m going to break down everything you need to know about the Calhoun County, Alabama tax lien sale, so you can invest confidently and get a great return on your money.

The Tax Collection Process in Calhoun County, AL

Let’s start with the basics. Every year in Calhoun County, property owners need to pay their property taxes by October 1st.

If they don’t, these taxes become delinquent after December 31st. Once that happens, penalties start racking up—interest kicks in at 1% per month starting in January, and this continues until the taxes are paid.

If they’re still unpaid, those properties go to a tax lien auction in May.

Why Do You Care About Delinquent Taxes?

Well, as a tax lien investor, your opportunity comes from the fact that these unpaid taxes accumulate and lead to properties being auctioned off.

You don’t actually buy the property outright at the auction—you buy the tax lien, which means you’re paying the back taxes in exchange for the right to collect them, along with interest, from the property owner.

Image Credit: https://www.calhouncounty.org/revenue/#collection

Understanding the Calhoun County Tax Lien Auction

The big event you want to mark on your calendar is the tax lien auction in May.

It’s an online event, and the platform used is GovEase.

Before I dive into how the auction works, let’s cover some essential terms:

Right of Redemption: If you win the bid on a property tax lien, the owner has a three-year period to pay you back, plus interest, to reclaim their property. If they don’t redeem it within those three years, you can start the process of foreclosing on the property.
The “Bid Down” Process: The auction works on an interest rate bid-down model.

Here’s how it goes:

The bidding starts at 12% interest per annum.

You, the bidder, are essentially offering to accept a lower interest rate on the tax lien.

The lower your bid, the more likely you are to win, but you’ll also receive a lower return if the lien is redeemed.

The lowest bid wins the auction, but if there’s a tie at 0%, a random generator picks the winner.

Image Credit: https://govease.helpscoutdocs.com/article/108-alabama-pre-bidding

Prepping for the Calhoun County Tax Lien Auction

1. Registration Process
If you’re serious about bidding, you’ll need to set up an account on GovEase.

Once registered, you’ll also have to complete some county-specific documentation—make sure to double-check what Calhoun County requires.

Don’t forget the W-9 form, which is standard for all new bidders.

Payment arrangements are made directly with the County Revenue Commissioner’s Office.

2. Research Is Key
Not all liens are created equal. Before the auction, it’s critical to research the properties you’re interested in.

Remember, you’re not buying the house itself; you’re buying a lien on it.

So, look into the condition of the property, its location, and any other factors that could impact its value or the likelihood of the owner redeeming the lien.

Actionable Tip: Use resources like the Calhoun County Tax Collector’s website and local property databases to gather as much information as possible.

3. Pre-Bidding
You don’t have to wait until the auction day to place bids.

Pre-bidding is an option, and it allows you to set your minimum acceptable interest rate ahead of time. It’s handy if you have a specific return in mind or you’re bidding on multiple properties.

Image Credit: https://govease.helpscoutdocs.com/article/107-alabama-getting-registered

What to Expect During the Calhoun County, AL Tax Sale Auction

Since the auction is online, you can bid from the comfort of your home.

It’s held in real-time, so be ready to monitor your bids and adjust as needed.

Each property will be listed with its delinquent taxes, and you’ll be able to see the current interest rate bid.

Remember, you’re competing against other investors, and the goal is to bid down the interest rate you’re willing to accept as your return.

But don’t forget, the lower the rate you bid, the less you stand to earn if the lien is redeemed.

Pro Tip: Have a clear maximum and minimum bid in mind for each property you’re interested in.

Don’t get caught up in the competition and end up bidding lower than you’re comfortable with.

Image Credit: https://govease.helpscoutdocs.com/article/109-alabama-live-bidding-and-reports

Post-Auction: What Happens Next?

Congrats! If you’ve won a lien, here’s what happens next:

Collecting Interest on the Lien

If the property owner decides to redeem their property, they’ll have to pay you back the delinquent taxes plus the interest rate you won with. For instance, if you won with a bid at 8% interest, that’s the rate you’ll get on top of the back taxes you paid.
Redemption Period & Foreclosure

The property owner has a three-year period to redeem the property. If they fail to pay during that time, you have the right to foreclose on the property and potentially take ownership.

Pro Tip: If you’re looking for properties to own rather than just collect interest, focus on liens that are less likely to be redeemed, like those with larger amounts due or on properties in poorer condition.

Finding Delinquent Properties & The Official Tax Lien List

1. How to Search for Tax Liens
Before jumping into the auction, you’ll want to search for delinquent properties in Calhoun County.

You can do this through:

The Calhoun County Tax Collector’s website.
GovEase’s portal, where they often list properties going up for auction.

Pro Tip: Keep an eye on the list regularly before the auction to track which properties remain unpaid and are therefore going to auction.

2. Evaluating the List of Delinquent Properties
The list will contain essential details: owner names, property descriptions, tax amounts owed, and interest rates.

This is where your research skills come in. Use these details to determine if a property is worth bidding on.

Image Credit: https://altags.com/calhoun_revenue/property.aspx

Calhoun County, AL Bidding & Auction Tips

Keep Your Budget in Mind

It can be easy to get carried away during bidding, but make sure you’re sticking to your budget.

Overextending yourself can lead to financial strain, especially if multiple liens don’t get redeemed quickly.

Know the Rules

Each county has slightly different rules, so make sure you read up on Calhoun County’s specific requirements.

Things like how payments need to be made (typically, certified checks only after April 2nd) and any specific documentation you’ll need are all important.

Be Ready to Act Fast

When the auction goes live, each property will only be up for a limited time.

Monitor the auctions closely and act fast when the interest rates drop to a level you’re comfortable with. Use the pre-bid option if you can’t be present during the live auction.

Image Credit: https://www.govease.com/bidder-help-support-by-state

The Redemption Process for Property Owners

If you hold a tax lien certificate and the property owner redeems it, here’s how it works:

They’ll pay you back the full amount of delinquent taxes, fees, and any interest accrued at the rate of your winning bid.
The county handles the redemption process, so you’ll be notified and paid directly once it happens.

Pro Tip: Keep track of which liens you hold and their respective redemption periods.

It’s good practice to be aware of when you might see a return on your investment or need to start considering foreclosure.

Image Credit: https://www.calhouncounty.org/revenue/#collection

Resources & Next Steps

To be a successful tax lien investor in Calhoun County, AL, make sure to:

Sign up for GovEase: This is the platform where the auction happens. Familiarize yourself with its layout and features.
Check the County’s Tax Collection Website Regularly: Get updated information on the tax collection process, delinquent property lists, and auction dates.
Research Properties Before You Bid: The more you know about the property, the better prepared you’ll be to make informed bids.
Have a Clear Strategy: Know your goals, whether they’re to earn interest on liens or potentially acquire properties, and bid accordingly.

Wrapping Up

Investing in tax liens in Calhoun County can be a lucrative venture if you understand the process and go in prepared.

By keeping track of key dates, researching properties, and understanding the auction bidding process, you’ll be ready to participate confidently and potentially earn a solid return on your investment.

Pro Tip: You can certainly continue to research these tax liens the long way which is 100% free but very tedious and time-consuming, or you can use a high-quality research software such as Tax Sale Resources to get your time back!

Image Credit: Tax Sale Resources Homepage

They Provide:

Access To Upcoming Auctions
Access To Property Reports
Access To Over The Counter List Downloads
Access To Auction Raw List Downloads
And Much More!
Sign Up For A 7-Day Trial Today.

Finally, I believe the best way I’ve found to learn is by doing and “failing forward” as they say.

I bought my 1st investment property in 2020 during the middle of (you know what..cough..cough), and I had no clue what I was doing despite spending months researching how to invest in real estate.

But guess what? I did it.

And learned a ton of valuable lessons along the way!

So,If you’re truly interested in tax lien investing, consider subscribing to my newsletter and following along my journey from landlord to “leinlord” as a new tax lien investor.

As Leinlord grows, my goal is to provide a “behind the scenes” inside look at the tax lien auctions I participate in and thoroughly profile any properties that I win.

You’ll get to ride along with me as I walk through my risk analysis, deal structures, ROI calculations, bidding tactics, and exit strategies all documented for the world to see (even my L’s).

So please show your support and sign up for my newsletter OR if you are a Google Chrome user hit that “follow” button!

(screenshot instructions found on my about page:))

Additionally, if you’re interested in booking a consultation to talk tax lien strategy feel free to schedule a one-on-one here.

P.S. I am still fairly new to tax lien investing but willing to share what I’ve learned so far, so please keep that in mind before you book!

I’m not an expert… (yet)

Look forward to having you in the Leinlord community!

**Disclaimer

I am not a lawyer, financial advisor, or tax professional. This article is based on my personal research and experience as a tax lien investor. The information provided is for educational purposes only and should not be considered legal, financial, or tax advice. Always consult with qualified professionals before making any investment decisions or taking action related to tax liens. Laws and regulations vary by jurisdiction and can change over time, so verify all information independently. Investing in tax liens carries risks, and past performance does not guarantee future results.