Transcript:
Welcome to the Tax Sale Podcast, where tax sale investing is made easy. My name is Casey Denman, I’m a tax sale veteran, the leading tax sale expert, author of The Tax Sale Playbook, founder of The Tax Sale Academy and I’m your host right here on The Tax Sale Podcast.
Thank you so much for joining me on today’s podcast episode. This is a completely free podcast and is brought to you through and because of The Tax Sale Academy. If you’re looking to learn more about investing in tax defaulted real estate, just head to TaxSaleAcademy.com. Again that’s TaxSaleAcademy.com.
On today’s episode I want to go over a few tax sale success hacks. Now, first off just so I can make sure your expectations align properly with this episode I’m not going to tell you something that you go out and do within the next hour and you’ll make a million bucks. That stuff isn’t reality. But, instead, I’m going to go over just a few things that I’ve learned over almost 20 years in the business as an investor, as well as a decade as a tax sale educator. Some of these might not seem earth shattering and that’s ok, but hopefully they serve as good reminders of exactly what you should be doing. And others, of course, might just pique your curiosity.
Alright, so let’s go through a few tax sale success hacks:
1. Learn, then do. I’m always going to start with this one. Tax sale investing is a simple sounding business that has a lot of inner workings. I can guarantee you that it’s more than just buying and selling real estate. The real world is a tough place to learn. I get emails all the time from those who paid real world prices for real world lessons. Instead of diving in head first, take the time to learn. Even if that requires you to spend a few bucks on a book, more on formla training, or simply some time educating yourself through another manner.
2. Forget timelines. I have plenty of people that want to buy a property within X amount of days. And the desire is admirable, although it’s misaligned. Instead of saying you will buy something within X amount of days, you should tell yourself that you’ll learn and be ready to buy something within x amount of days. The problem with an artificial timeline is that you don’t control quite a bit when it comes to any investment. We don’t control when the auctions are, we don’t control the competition there, we don’t control what those properties sell for, we don’t control which properties are redeemed at the last minute, we don’t control plenty of other stuff that decides whether or not we’ve made a good investment. So don’t put yourself on a timeline.
3. Don’t Force it. On that same note, if it doesn’t feel right don’t force it. There are more than a million tax defaulted properties sold every year. So, why force yourself into an investment that doesn’t feel right? If it doesn’t feel right from the start, it probably won’t work out. Go with your gut.
4. Next one – stop overlooking land. I got a comment just today as a matter of fact from someone that said he saw somebody at a recent auction pay $9,000 for just land. There is actually quite a bit of land out there that’s worth plenty more than $9,000, but in the end it doesn’t matter. All that matters is that you can sell the land for more than you paid for it. There’s far too many people that think land is difficult to sell, that think land is valueless and that think land is inferior to structures. It is none of those things. Land can be extremely profitable. Telling you this from personal experience here! Stop overlooking land!
5. Bad Homes Can be Good Money Makers. When people first get into real estate investing, they get grand illusions of what they think they should be investing in. This comes from something they saw one of their buddies do or from those HGTV house flipping type television shows. The reality is that most homes at tax sales are ugly. Most are stinky and most have plenty of issues. Newsflash: None of that matters. Ugly homes, when strategized properly, can be huge money makers.
6. Take small profits to profit big. Homerun deals are nice and they’ll certainly come in your career, but don’t neglect the small profits that are easy to grab ahold of – those are what will pay the bills and what will allow you to grow over time. Going after nothing but homerun type deals will eventually kill your business. There is nothing wrong with stacking small gains.
7. Small towns bring big returns. The areas that have the highest numbers of registered bidders are big towns. The lowest number of registered bidders are small towns. That’s not rocket science. But the more bidders there are, the more competition you have. Competition drives prices up and margins down. Find the smaller markets, where you can still find buyers and you’ll find yourself faced with lower competition and higher margins.
8. Do It Differently. I did a short podcast on this a while back, but it’s crucial that you find some sort of angle. Everyone wants to buy the easy flip that needs carpet and paint and you can make 20 or 30 grand. The problem is that because so many people want that, it doesn’t exist in many areas. Instead find your own angle. Maybe you become the mobile home person or the person who sells with owner financing, or the section 8 specialist or whatever. They say that the riches are in the niches. Find your niche as a tax sale investor and you just might find your way to those riches.
9. Research is always king. Don’t rush the research part to get to the buying part. Sure, buying is fun and research is well . . . research. But it’s incredibly crucial that you perform the correct research prior to purchasing a property. You research will always determine how good or bad your results are. Never forget that.
Alright, number 10. Remove emotion. Investments made off emotion are risky, at best. And losers, at worst. Never get attached to a piece of investment real estate. It’s easy to see a property and then put an emotional attachment on it. Maybe you like to fish and you can picture yourself fishing on that waterfront property. Maybe you see a house that reminds you of your childhoold home. Maybe you’re a golfer and there’s a property in a cool golf course. All of this is great, but unless it makes sense financially. Unless the numbers work, then don’t invest in it. Be very conservative with your numbers and invest off your numbers alone. Nothing else. Take emotion out of the equation!
Hopefully these ten pieces of advice have helped you. The entire goal with your tax sale business is to minimize mistakes while maximizing opportunities. Mistakes are bound to happen. But there is a BIG difference between making a major avoidable mistake and a very minor mistake. When you combine that with learning how to maximize and take advantage of the opportunites before you, then you will find success in this business. But understand it times learning and it takes patient. But the tax sale business is an incredible business that I hope you get involved in!
I also hope that this episode has helped youout. If this episode helped or if any of our epsiodes have helped, please do me a huge favor and leave some positive feedback for us on whatever podcasting platofmr you’re listening to us on today.
Thanks again for listening and make it a successful day! We’ll see you next time, right here on the tax sale podcast. See ya!