Tax Lien and Tax Deed Investing in Colorado Springs: A Complete Guide for Real Estate Investors
By Charles "Uncle Charles" Hernandez, UNC360 | Published: March 4, 2026 | Updated: March 5, 2026
8 min read
Key Takeaways
Colorado Springs uses the tax deed system, meaning you can potentially acquire actual property ownership, not just liens El Paso County holds tax lien sales typically in October, with a three-year redemption period before properties can be sold at tax deed sales Military PCS moves and economic fluctuations create unique opportunities in Colorado Springs' tax sale market Due diligence is crucial — properties may have title issues, environmental concerns, or be located in challenging areas Success requires understanding both the legal process and local market conditions specific to the Pikes Peak region
Key Takeaways
- Colorado Springs uses the tax deed system, meaning you can potentially acquire actual property ownership, not just liens
- El Paso County holds tax lien sales typically in October, with a three-year redemption period before properties can be sold at tax deed sales
- Military PCS moves and economic fluctuations create unique opportunities in Colorado Springs' tax sale market
- Due diligence is crucial — properties may have title issues, environmental concerns, or be located in challenging areas
- Success requires understanding both the legal process and local market conditions specific to the Pikes Peak region
HOMESELL USA has helped thousands of homeowners in this exact situation. Contact us today for a free, no-obligation cash offer — visit homesellusa.com
Understanding Tax Lien and Tax Deed Investing in Colorado Springs
Look, here's the deal with tax investing in Colorado Springs — it's not like flipping houses you see on TV, but it can be profitable if you know what you're doing. I've been in the distressed property business for years, and I've seen investors make good money and I've seen them lose their shirts. The difference? Understanding the local market and doing your homework.
Colorado Springs operates under Colorado state law, which uses a hybrid tax lien and tax deed system. When property owners don't pay their taxes in El Paso County, the county doesn't just let it slide. They put those properties into a process that creates opportunities for investors like you.
How Colorado's Tax Sale Process Works
First, let me explain how this works in Colorado Springs specifically. When someone can't or won't pay their property taxes, El Paso County starts the process. The county treasurer publishes a list of delinquent properties and holds what's called a tax lien sale, usually in October.
Here's where it gets interesting — when you buy at the tax lien sale, you're not buying the property yet. You're buying a lien that earns interest. In Colorado, that interest rate can be quite attractive. But here's the kicker: the property owner has three years to pay you back with interest. If they don't pay within those three years, then you can apply for a tax deed and potentially own the property outright.
I had an investor call me last month who bought liens on three properties near Peterson Space Force Base back in 2021. Two of the owners paid him back with interest — nice return. The third one didn't pay, so now he's going through the tax deed process and might end up owning a property worth $180,000 that he paid $8,000 in back taxes for.
The Three-Year Redemption Period
That three-year waiting period is crucial to understand. During this time, the property owner can redeem the lien by paying you back the amount you paid plus interest and fees. In Colorado, the interest rate is set by statute and can be quite favorable for investors.
But here's what many new investors don't realize — you're not guaranteed to get the property. The owner might pay up at the last minute. I've seen it happen countless times. That's why successful tax lien investors treat it like a secured investment first and potential property acquisition second.
Colorado Springs Market Dynamics
What makes Colorado Springs unique for tax investing? A few things. First, you've got a significant military population with PCS moves happening constantly. Sometimes military families get orders and have to move quickly, leaving behind properties they can't sell fast enough. Financial stress can lead to unpaid taxes.
Second, the area has seen tremendous growth and development, but not every neighborhood has grown equally. You might find tax sale properties in areas that are still transitioning, or in neighborhoods that haven't benefited from the overall market appreciation.
This is exactly what HOMESELL USA does every day. We've helped thousands of families navigate these exact situations — whether they're facing tax liens, foreclosure, or need to sell quickly due to military orders. Call Uncle Charles — no pressure, just straight answers.
Third, Colorado Springs has a mix of property types — from downtown condos to ranch properties on the outskirts. This variety means tax sale lists often include everything from small residential lots to larger parcels that might have development potential.
Due Diligence: The Make-or-Break Factor
Here's where a lot of investors mess up — they get excited about the potential profits and skip the homework. I've seen people buy tax liens on properties that had environmental issues, were landlocked with no access, or had such severe title problems that they were essentially worthless.
Before you bid on any tax lien in El Paso County, you need to:
Research the Property Thoroughly
Drive by the property. I don't care if it's a $500 lien — go look at it. Is it in a flood zone? Is there access to utilities? Are there obvious environmental concerns? I once knew an investor who bought a lien on what he thought was a great deal near Garden of the Gods, only to discover the property had been used for auto repair and had soil contamination issues.
Check the Title History
Just because there's a tax lien doesn't mean that's the only problem with the property. There might be other liens, easement issues, or title defects that could make the property difficult or impossible to develop or sell later.
Understand the Neighborhood
Colorado Springs has some great neighborhoods and some challenging ones. A property in Old Colorado City has different potential than one in a less desirable area. Know what you're buying into and what realistic exit strategies look like.
Profit Strategies That Actually Work
The most successful tax lien investors I know don't put all their eggs in one basket. They typically follow one of these strategies:
The Interest Play
Some investors are perfectly happy earning the statutory interest rate and getting paid back during the redemption period. It's like a secured bond with a good return. You're not trying to acquire property — you're making money on the interest.
The Property Acquisition Strategy
Other investors specifically target properties they'd like to own, hoping the owners don't redeem so they can go through the tax deed process. This requires more capital upfront and more due diligence, but the potential returns are higher.
The Hybrid Approach
Smart investors often do both — they buy liens on properties they wouldn't mind owning, but they're happy to collect interest if the owners pay up. This gives you multiple ways to win.
Common Mistakes to Avoid
I've been dealing with distressed properties in every condition imaginable, and I see the same mistakes over and over again in tax lien investing:
Bidding too aggressively: Some investors get caught up in auction fever and pay way too much. Remember, you need to leave room for profit.
Skipping due diligence: That bargain-priced lien might be cheap for a reason. Always investigate before you invest.
Not understanding the timeline: Three years can feel like forever when you've got money tied up. Make sure you can afford to wait.
Ignoring ongoing costs: You might be responsible for certain carrying costs during the redemption period. Factor this into your calculations.
Working with Professionals
Tax lien and tax deed investing has legal complexities that can trip up even experienced investors. The smart money works with attorneys who understand Colorado tax sale law and local title companies that can help with due diligence.
At HOMESELL USA, we've worked with thousands of property owners who were facing tax problems. We understand both sides of this equation — the investor opportunity and the homeowner's distress. Sometimes we end up buying properties from investors who acquired them through tax deed sales, and sometimes we help homeowners avoid tax sales altogether by buying their properties quickly for cash.
The Reality Check
Look, I'm going to be straight with you — tax lien investing isn't a get-rich-quick scheme. It requires patience, capital you can afford to have tied up, and the discipline to do thorough research. But for investors who understand the process and do their homework, it can be a profitable part of a diversified real estate investment strategy.
Colorado Springs offers some unique opportunities because of its military population, growing economy, and diverse property types. But like any investment strategy, success comes down to education, due diligence, and realistic expectations.
Whether you're looking to invest in tax liens or you're a property owner facing tax problems, the key is understanding your options and making informed decisions. If any of this sounds like your situation — whether you're an investor looking for opportunities or a homeowner dealing with tax issues — give Uncle Charles a call at HOMESELL USA. No pressure, no judgment — just straight answers about your real estate situation. Visit us at homesellusa.com or call today.
Sources
Information in this article is based on general knowledge of Colorado tax sale procedures and El Paso County practices. For current specific dates, procedures, and requirements, contact the El Paso County Treasurer's office directly or consult with a qualified attorney familiar with Colorado tax sale law.
Frequently Asked Questions
When does El Paso County hold tax lien sales?
El Paso County typically holds tax lien sales in October each year. Contact the El Paso County Treasurer's office for specific dates and procedures, as these can change. HOMESELL USA works with investors and homeowners throughout the tax sale process.
How long is the redemption period in Colorado?
In Colorado, property owners have three years from the date of the tax lien sale to redeem the property by paying back the lien amount plus interest and fees. If they don't redeem within this period, the lien holder can apply for a tax deed.
What interest rate do tax liens earn in Colorado?
Colorado sets tax lien interest rates by statute, and the rate can vary. Check with the El Paso County Treasurer's office for current rates. The interest compounds and can provide attractive returns for investors willing to wait through the redemption period.
Can I lose money on tax lien investing?
Yes, tax lien investing carries risks. You might buy a lien on a property with title problems, environmental issues, or other complications that reduce its value. That's why due diligence is crucial. HOMESELL USA has helped many investors who needed to sell properties acquired through tax deed sales.
What happens if multiple people want the same tax lien?
Tax lien sales are typically conducted as auctions. In Colorado, bidding usually starts at the amount of delinquent taxes owed, and investors bid up from there. The highest bidder wins the lien. Some counties use different bidding methods, so check the specific procedures for El Paso County.