Transcript:
Welcome to the Tax Sale Podcast, where tax sale investing is made easy.
I’m Casey Denman, a tax sale veteran, expert, and trainer, author of the tax sale playbook, founder of the tax sale academy and your host here on the tax sale podcast.
Thanks for joining me on today’s podcast, and as always, at the conclusion of this podcast, if you’re looking to learn more about investing in tax defaulted real estate head to taxsaleacademy.com. That’s taxsaleacademy.com.
Today we’re discussing something that’s so important for all aspects of business, but is often overlooked. We’re talking about developing a plan for your tax sale business. Sure, the stuff you can take immediate action on is where so much of our attention goes – getting tax sale lists, attending auctions, selling properties and everything in between. But, before you can even get this far you MUST have a plan established if you want to see any long term success. I can sit here and tell you every week on this podcast exactly what to do and how to do it. I can go into great detail and provide the step by step process of doing everything required as a tax sale investor inside the academy, but the deal is, without some sort of long term game plan, you’ll eventually fail in this business or you’ll get burned out and won’t see the success you desire.
So let’s go over an outline, a 5 step outline, that will help you to develop your own plan of attack to succeed in this business.
The first step is absolutely the most important step. Learn what you’re doing. I’ve committed the better part of my life to tax sale investing. Just about half of my life has been spent in this business and I can promise you that the most crucial thing you can do and the largest ROI on your investment will be the time you spend learning how to properly invest in this business. And I’m not saying that because I’m in the education space. In fact, if you’ve followed me for any time now, you probably know that when it comes to the tax sale business, there really isn’t anyone anywhere close that provides as many completely free training videos as I do. So it’s not a plug or anything like that. If you want the step by step process I’ve used to see success, join the academy. If you don’t want to join, then learn however you can. But learn . . . and understand, it’s going to take effort, it’s going to take time and it WILL absolutely 100% take money.
And here’s the kicker . . . this whole learning thing will NEVER, EVER end. That’s right, this isn’t grade school, where you memorize the answers for the test, complete the test as quickly as possible before you forget anything and then a day later you have no idea what you learned. We’ve all done it, but that’s not tax sale investing. Learning as a tax sale investor will never ever end. I continue to learn every single day, I learn and develop new strategies, I learn about markets, I learn about techniques, I learn from other investors, and I probably learn the most from my very own tax sale academy members. Learn, now and forever. It’s so extremely important. And on a side note, if you want to know the number one way to fail in this business . . . to absolutely insure you won’t succeed, then it’s the exact opposite of this, which is to start investing and/or continue investing without investing the time it takes to actually learn. That’s right, I don’t recommend it, but if you want to fail, go ahead and buy a few properties without knowing what you’re doing. That’s a sure-fire failure formula.
After you’ve learned what you’re doing, the next step is to determine exactly what style of investing you want to be involved with. There are tax liens and tax deeds in this business. A tax lien is a priority lien against the property where you will typically end up earning a rate of interest of some sort on your investment, and that investment is backed by real estate. Tax deed investing is where you actually buy the tax foreclosed property. In a nutshell and once you factor in averages, you will typically make less of a return off of a tax lien, but it will also be less work since you don’t have to sell the property. A tax deed will result in higher returns, but will also require much more backend work since you have to sell the property. It’s important to note that many of my students invest in both tax liens and tax deeds. Once you determine what type of investment you prefer to make, that will narrow down the states you can invest in since some states offer liens and others offer deeds. From there, you’ll need to narrow down your county. There are quite a few steps to determine the best area for you, but if you’re an academy member and haven’t yet viewed the “Investing Out of Area” workshops, be sure to take a look as they’re incredibly helpful with this process.
The next step into developing your tax sale plan is to create your budget. I get questions about this all the time . . . how big should my budget be? That’s like asking me how fast should I drive my car. There is no answer for this that applies to everybody. It depends on way too many factors. Your budget needs to be between $100 and $100,000 to start. That’s honestly about the best answer I can provide. If you are in some parts of the country and/or aren’t looking for a huge return, then $100 can get you started. In other areas, you’ll need $50 or $100k to even start. So how do you find out how much you need? It all starts with the first step about learning what you’re doing. That led us to the second step about determining what type of investment you’ll be making and where you’ll invest, which of course by now leads us to you having a solid idea based on all this information of the amount of money you will reasonably need to be successful as a tax sale investor in the area you’re investing in based on your objectives. So, while I can’t directly help you do so besides reminding you to learn what your doing first, you MUST create your budget and of course figure out a way to meet that budget whether it’s cash, loans, or some other method – perhaps one we discussed in our funding episode a few weeks back.
Once you’ve reached this point, you really need to continue to dial in the learning process by actively practicing which is our next step. Now I did an episode of this as well a few weeks back, so I don’t want to go into too deep of detail here. That episode was titled 5 Ways to Practice Tax Sale Investing and I highly encourage you to check it out. What I can tell you is that the best way to develop your confidence and knowledge as a brand new tax sale investor is to practice. There’s nothing that compares to learning and applying this knowledge without actually having to invest your hard earned money. The best way to do this is to get involved in this business. Access lists, research lists, do drivebys, register to bid, attend auctions, analyze auction results, talk to other investors, attend open houses, talk to the realtors, get involved, plain and simple.
The last part of your plan should be to execute and grow. The step leading up to this, to practice, is performed to build your confidence and familiarity with the tax sale process. If you’re not ready or don’t feel confident, continue learning and practicing. If you never feel like you’re ready or you have reservations, then join the academy or get some one on one coaching with a mentor. But in order to start your business you will, at some point, need to take action and get started. And as a caveat here, don’t ignore your training on diligence, valuations and that kind of stuff and rush into an investment. Be patient, but take advantage of the first GOOD opportunity that comes your way. Then when you make your first sale or receive your first redemption, reinvest that money. And do it over and over again and allow it to snowball until you reach the point where you can begin taking money out. Don’t immediately cash out all of your money the first time you turn a profit. Allow your capital to grow, which will ultimately grow your business and your personal financial well being.
So, there’s 5 steps to developing your tax sale plan. Learn, determine the type of investment, determine and find a way to meet your budget, practice, then execute and grow.
If you’d like to learn more about investing in tax defaulted real estate, including many more marketing techniques we’ve developed over the last 16 plus years, head on over to TaxSaleAcademy.com. That’s TaxSaleAcademy.com.
And as always guys, if you found this episode helpful it will mean so much to us if you take a few second to leave positive feedback.
Take care guys and make it a successful day.
See ya!