Transcript:
The Baby Steps of Tax Sale Investing
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.
Today I want to discuss the baby steps of tax sale investing. The truth is that if you want long term sustainable success in this business you MUST begin with the baby steps. This is such an incredibly important concept to grasp.
I get emails and messages ALL of the time from someone who just heard about the opportunities through the tax sale business. And they want to get started which is admirable, right? But they are so focused on the money that they see themselves making that they completely forget that there are steps to take to get them there. You don’t automatically go from point A to point Z. There are many other steps in between there. And this can take some time investment.
Of course, I can say the same thing when it comes to learning about these baby steps. People want to get into a career that has the potential to provide multiple six figures of income to them, but they won’t invest a month or two into studying the business. Or they won’t invest $5 into a book or more into a full blown training academy. It’s really mind blowing to me that there are thousands of people who will spend four years and $20,000 more to go to college in exchange for, according to Zip Recruiter an average salary of around $50,000 but they won’t spend just a month or two and a fraction of that to learn how to properly invest in tax defaulted real estate?
That’s a topic for an entirely different day, but the point is that you don’t go from just learning about this business to making money in a few days. The horror stories that I hear all revolve around someone who forced themselves into an investment that they shouldn’t have made, and often times they didn’t know that they shouldn’t have invested in that property because they failed to properly learn.
So lets discusss some of the baby steps that you must take if you want to see any real success, while saving yourself from becoming another horror story.
First off – and it’s not so much a step as it is a state of mind, you must slow down. If your car is traveling five miles an hour you’re going to have plenty of time to take in all of the sites and learn what to and what not to do with minimal chance of hurting yourself. If you’re traveling 100 miles an hour you stand a good chance of missing a lot and, worse case scenario, hurting yourself. This is not a video game, this is investing in real estate with real consequences that often go far beyond just your initial investment. Make the decision to invest when you’re ready, not based on some sort of preconceived artificial timeline.
Learn, before anything else. Become a student of the business. People ask me the number one mistake that I see occur. When I look at all the issues I hear about such as not understanding the process, not doing the proper diligence, overlooking something and many others, it typically revolves around the person failing to take the time to learn. You must learn then do.
Someone once told me that they’d rather learn by doing than by studying since they weren’t a good student anyhow – well, that $10,000 condo they ended up purchasing was a great deal, at first. Then they realized that the entire complex was scheduled for demolition by the city and had been the subject of countless lawsuits and had fallen into disrepair. The city knocked their condo over about a month later and then they assessed each one of the owner’s a portion of the demolition fee. That $10,000 learning experience investment turned into an $18,000 nightmare. Learn before doing, then use the process as a learning experience as well.
And when I say learn it’s not just a matter of ok, this is tax deed investing, this is tax lien investing, this is where I get a list. No, that’s surface level type stuff. It goes much farther beyond that. What’s the entire process from delinquent status to the point where the owner loses the land. What’s the proper process for researching the property and performing due diligence – this is an insanely important one because so many people only perform one tenth of the required research. What about the title implications? How about strategy? There is so much to learn and it’s so much more than surface level.
Reading the laws is another baby step that so many people overlook. The laws are the rules by which we must play. They are the words that allow us to exist as tax sale investors. And to think that you won’t take a few hours to read and study them? You can find these laws on Google or grab a Tax Sale Law Guide when you buy your tax sale playbook. Go through line by line and read every single one of the laws. A good portion of the answers to the questions I are readily available word for word inside the laws. Now, these vary state for state so if you’re investing in multiple states, make sure you take the time to read the laws for each state.
So once you’ve done that it’s time to start browsing through different counties. And this is super easy to do, go to Google, type in the name of your county followed by tax sale. Look at their website, click every single link connected to the tax sale page and read every single thing on them. Use it as a learning opportunity. And right now I’d suggest that you go to a number of different counties in the same state and review every single one of their sites. While the general process might be the same, some will be more helpful than others.
Now, as you’re looking through the county sites there will likely be some that pop out at you. Maybe it’s the number of properties, the location, the dates auctions are held, whatever.
Now’s the time to take a look at some previous auction results. Research some auction results from a year or two ago to see what happened with those properties – did the investor flip them? Keep them? Was it a good deal or bad deal? Then compare those with a more recent results list like from the past month or two. Does it still look like there are decent properties there are decent prices?
If so, now it’s time to take a new list and begin to research it. Even if you’re still working on saving money or finding a funding source, go ahead and start your research. And do it in depth. Act as if you were spending your last dime on this property and you’re going to be broke if it doesn’t work out. And truthfully, you should research every property you buy like that. Determine your max bids, go through the process, if there is something you don’t fully understand, like say valuations, then research that specific topic. Know everything you possibly can about any property that you WOULD consider purchasing.
Then go to an auction. Not to buy, but to learn. Prepare, register, take notes, ask questions, listen to bids, pay attention, record the winning bid results, be involved and focused. This is the best way to practice while learning. After the auction, talk with other bidders, network and ask questions if you’re able to. Myself and many of my academy members have learned a whole lot just by simply attending an auction!
Once you leave, go analyze what happened. Who were the primary bidders? What do they do with the properties? How about the properties you liked? What did they sell for? Would you have been able to purchase them? What didn’t you understand and do you need to do more research on?
The goal is to find the confidence combined with knowledge necessary to be able to make smart investments. If something is not clear, take the time to go back and research what you’re not clear about. In the end, after all of these baby steps you should be confident and knowledgeable when it comes to knowing exactly what to do, when to do it and how to invest in tax defaulted real estate. At that point it’s simply a matter of continually learning, and going through this process over and over.
Tax Sale investing is not something where you should try to grow leaps and bounds in a week.
The ones who try this method usually fail miserably. Instead, look at it as a long term sustainable business where you must take the baby steps required if you want to be successful. And there are certainly plenty steps, but every single one of those steps lays down the foundation for your long term success. Just like the foundation of a house, this foundation is paramount when it comes to whether you succeed or fail in this business.
I truly hope that this episode has helped you take a different look at this busnss and the proper way to get started. If it has helped or if any of our episodes have helped, please leave us some positive feedback on whatever podcasting platform you’re listening to us on today.
And if we can teach you each of these baby steps or anything else when it comes to tax sale investing, just head on over to TaxSaleAcademy.com and become a member of the academy for our most comprehensive and step by step training.
Take care and make it a successful day. See you next time right here on The Tax Sale Podcast. Bye bye.