Introduction to Ohio Updates on RFP Sales with Maureen Zink Delaney
Brian Seidensticker, CEO of Tax Sale Resources, recently hosted a podcast with Maureen Zink Delaney of Carlisle Law, an expert on Ohio tax sales. She provided an update regarding what’s happening in Ohio, including how county treasurers now use the unique Request for Proposal (RFP) format to manage tax sales.
Overview of Tax Sales in Ohio
Approximately 88 Ohio counties in the state offer tax sales, and 18% is the statutory maximum interest rate. Bidding usually occurs in a bid-down process that starts at 18%. If you bid down to zero and win the auction, but the property is redeemed during the one-year redemption period, you are only compensated for the face value of your investment. You must also pay any outstanding property taxes that may have come due since you purchased your lien at the tax sale. But if it is not redeemed and you submit a Notice of Intent (NOI) to foreclose and the county signs off on that, then the interest rate you are entitled to receive jumps to 18%. Any funds submitted along with your NOI also earn 18%, as do any subsequent certificates you purchase from the county.
The Unique Request For Proposal Process in Ohio
While Ohio used to have only traditional type tax sales, county treasurers now have the option and authority to use the RFP sale process instead. Almost all counties, except for Hamilton County (where Cincinnati is located), now do Request For Proposal (RFP) sales. However, the elected person can change the format because the treasurers are elected in Ohio. A notable example is the recently elected treasurer in Hamilton County, who has indicated that they intend to move toward using the RFP process. If so, all counties doing tax sales in Ohio will be using that format.
How this Request For Proposal Process Works
The RFP process can and does vary from county to county. Still, typically, the county releases a list of properties before the RFP submission date, and bids are submitted each year in September or October. Investors are strongly encouraged to perform due diligence at that time to help them put together well-informed proposals. It’s also noteworthy that most of these lists, especially in larger counties, include lots of properties you are bidding on all at once in a bundle. So, the cost of bidding competitively can be pretty expensive and generally favors larger, better-capitalized investors versus small investors who may not have the funds to compete effectively.
Evaluation of Your Request For Proposal Before Submission
While the lowest bid can win in a traditional bid-down sale, that does not necessarily hold when submitting an RFP in Ohio. That’s because the county will evaluate each proposal on its own merits. The interest rate is only one factor considered, and others include such things as the investor’s professional reputation, financial stability, and proof of funds. The county may also evaluate the investor’s capability to service lien payments. Counties also tend to favor investors willing and able to engage with them as long-term partners over multi-year contracts.
The Bottom Line
Investing in tax sales in Ohio can be a very profitable undertaking even though the bidding is becoming increasingly aggressive and the competition can be fierce. To learn more about the Ohio tax sales process and its RFP format, listen to the entire podcast conversation between Brian Seidensticker and Maureen Zink Delaney, accessible by clicking here.
