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 tax sale confidence. And this can apply on so many levels.
I can remember my very first auction like it was yesterday. I had done my research, I had my deposit and ID and had my binder ready to go. But I was so dang nervous. I had zero confidence. Like zero. I tried to put on the front that I was a confident young guy, but I wasn’t. The truth was that my heart was beating out of my chest and I when I walked in that room, I felt like every single person was staring at me. I could feel my face get flush and as I sat down I began to sweat. Then the lady announces that it’s time to form a line and register. I walked up and showed her my driver’s license. And she asked me to write my name and phone number down on the bidder sheet. I vividly remember being so nervous that I was shaking and had difficult writing my name and phone number legibly on that little piece of paper. I had to tell my mind, slow down, stop, nobody is watching, it’s ok . . . just write your name.
Now, 16 years later I have watched billions of dollars worth of real estate get sold, I’ve attended probably over a thousand auctions, place tens of thousands of bids, and have been to many states investing in tax defaulted real estate and luckily I don’t have those same nerves. I’m ultra confident in who I am and what I’m doing no matter where I am.
Sure, butterflies will exist. I get butterflies when I get excited, though. Not necessarily nervous.
But, let’s talk about you. Let’s talk about why you might be lacking confidence as a tax sale investor. I’m actually going to go over the five top reasons, in my opinion, that you lack confidence when investing in tax defaulted real estate. And we’ll also address what you can do to solve these issues.
One of the issues is that you might think others care. You value others opinions too much. And that was me in the example I gave about my first auction. What will the others think? What if I bid too slow, too fast? What if everyone looks at me and I just panic and can’t bid or something weird happens? Well, the fact is that, despite what you might want to believe, other people probably don’t care one single bit about what you’re doing. And I don’t say that to sound brash, but that’s just how it is. And this I guess applies to both life and tax sale investing. But we worry so much about what other people are thinking about us, what will they say or think about what we do, have, dress, speak, look or act? Right? And you know it’s true to a certain degree. It’s only human nature. But at the end of the day, we spend all this time worrying about how other people judging us when, number one, another person’ opinion does not make a single difference at the end of the day, as long as we’re leading the life we want and (2) they probably aren’t even thinking about you in the first place. So, get over yourself. Noone is judging you at a tax sale auction.
Our second reason is that you just don’t understand the process. I received an email last week from someone who had purchased a tax lien and was trying to locate a Realtor to help them sell it. If you’re not familiar, a tax lien is just a lien attached to real estate – you can’t actually sell a tax lien through a Realtor. It was obvious that this person had no clue how the tax sale process works – don’t you think this is going to affect their confidence? If you’re a gymnast and you know how to do a backflip, then you’ll probably be confident. But if you’re not a gymnast, you might break your neck, right? And I actually see this quite a bit. Different foreclosures processes, title issues, outstanding encumbrances, redemption periods . . . the list goes on and on. Learn how the process works and you won’t have any issues.
The third reason you don’t have confidence is because you just don’t know what you’re buying. It’s sad, but I see it at every single auction. I’ll research a property and will think to myself, “WOW, that’s a definite no. Don’t even think about touching that thing. Whoever buys that will have HUGE mess on their hands.” Then . . . someone buys it. And my stomach just cringes for them because they don’t have any idea what a mess they just got themselves into. It might just be that they lost money, in many cases that’s the best case scenario for the property. In other cases, they could’ve purchase themselves a losing investment AND legal issues. Don’t worry about why there are no other bidders, go with your research and due diligence and as long as you did it accurately, this is a non issue for you.
The fourth reason you don’t have confidence is because you don’t have a strategy. You’re confused because you want to buy something but won’t know what to do next or how to sustain the success you have, if any. You are investing in tax defaulted real estate because you feel it’s cheap and you think you can make a buck. Well, that’s probably the worst strategy I’ve ever heard, although it makes sense to so many people because it’s exactly what they do when they start out. You need to figure out your short term strategy, like what types of properties you should be investing in, how much to pay, how you’ll exit them, that kind of stuff. Then figure out your longer term strategy, like where else you can invest, how to expand and grow your business and how much and when you’ll either reinvest or insert more capital. Tax sale investing is a business. You must have a plan to see long term success. If you have a plan, you’ll likely have confidence in what you’re doing and how to execute it.
The last reason you are probably not confident is that it could very well be a money thing. Perhaps you are using borrowed money or your on your last few dollars when you get into tax sale investing. I can certainly understand the hesitation you might have in this situation and I would never recommend that anyone invest their very last few dollars into any real estate transaction. You should never put yourself on such thin margins that one mistake will bankrupt you. But if you’ve know your strategy, what you’re buying and you understand the process you should be confident about the money you’re going to invest. If you’re worried about the money, if you’re scared to invest that money, then the odds are that there’s another issue somewhere. And that’s ok, it just means that you need to spend more time learning, researching and analyzing before you have that confidence. You should know that based on your education in this space and your diligence, that a property is winner and is won’t be a risk. In short, it should be a foolproof investment. And the more concerned you are about your money, the more solid that investment needs to be. If you’re investment is a solid can’t lose property, then the lack of confidence because of money will likely disappear.
These are the five most common reasons I see tax sale investors who lack confidence. Basing your business of others’ opinions, not knowing the tax sale process, not knowing what your buying, failing to have a strategy and worrying about losing money. As we’ve discussed, you can easily overcome every single one of these, if you put in the required effort.
To learn more about investing in tax defaulted real estate, include the trainings and strategies to make you a confident, successful investor 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 for us!
Take care guys and make it a successful day.
See ya!