A Colorado-based investment group bought an interest in 48 Howard County properties at an Internet tax sale earlier this month, raising eyebrows among local investors.
The Howard County Auditor’s Office received just over $29,000 from Hai Minh Ventures LLC for tax certificates on the properties, officials said Wednesday.
The certificates entitle Hai Minh and other investors purchasing certificates to either a guaranteed profit or first shot at acquiring title to a property.
The county, in return, collected more than $50,000 in unpaid property taxes at the Internet auction, which ran from April 5 to 13.
Henry Clingaman, a Kokomo homeowner, tried bidding on the property next to his, but was outbid by Golden, Colo., investor Ma Pham. Hai Minh paid the funds for the properties Pham bid on, explained Peggy Mallabar of the auditor’s office.
“I know the guy who actually owns it, and he’s not going to pay the back taxes,” Clingaman said. “He’s been talking about just letting it go.”
Most investors purchasing tax certificates (also called tax liens) do so hoping the property owner will pay off the back taxes, said Josh Boeke, a representative of SRI Inc., Indianapolis, the realty firm the county used for the recent tax sales.
If that happens, the tax certificate holder gets their money back, plus 10 percent interest. That’s how most tax lien investors make their money.
If the current property owner doesn’t redeem the property by paying off the past-due taxes, the tax certificate holder can either try to gain title to the property or simply eat their investment, Howard County Treasurer Martha Lake said.
In Clingaman’s case, Pham purchased a certificate on a property in the 1000 block of Apperson Way North for about $800.
The owner of the property, however, owes about $8,700 in back taxes. If he doesn’t pay, Pham would have to go to court to gain title on the property, Lake said.
The $8,700 in back taxes would be waived, but Pham would have to pay a property tax penalty from last year, all of this year’s property taxes on the property and any new liens that might be attached to the property, she said.
In addition, Pham would have to pay for a title search and public notice of his intention to seek the title.
All of that could get expensive for a property that had already been through several tax sales with no takers.
Mallabar said the county initially put 435 properties up for a live auction tax sale on April 3. Of those, 178 were sold at the live auction, netting the county about $269,000.
The remaining 257 properties went to the Internet auction, which was open to investors across the nation. Another 102 properties sold at the Internet sale, netting just over $50,000.
County officials called both sales a “cleanup sale” — basically an attempt to get some money back on the properties that had been delinquent the longest. Many of the properties are vacant lots, or have numerous city sewage and weed liens against them, Mallabar said.
Pham offered only a post office box address to the county, and couldn’t be reached for comment.
• Scott Smith is a Kokomo Tribune staff writer. He may be reached at 765-454-8569 or via email at scott.smith@ kokomotribune.com