I attended the Shelby County tax auction on March 27, and wanted to share a few observations with you. Hedge funds dominated, but targeted properties highly likely to be redeemed. Local investors interested in real estate were under-represented, resulting in many great bargains going unsold.
- 337 properties were listed for sale, 8 paid at the last moment and were deleted.
- 146 had no bidders.
- 71 sold for just the taxes due
- 8 sold for only $1,000 over the taxes, which was the minimum overbid.
- Of the remaining properties, the average overbid was 21.59% of appraised value, with an average effective interest rate of 8.15% per year. This is significantly better than competing investments currently available. The smallest effective interest rate was 5.16% which is still vastly better than CDs or Treasuries.