Ever want to purchase properties without bidding? Doing so is called buying the properties “over the counter” or OTC. Learn about the pros and cons of OTC properties in this video.

Visit www.OTCClass.com for our Over The Counter specific training class!

Transcript:

Hi, everybody! Casey Denman here with TaxSaleAcademy.com. And in this video, we’ll be talking about buying your tax sale properties in a non-auction setting.

Yes, it’s possible to buy tax sale properties without bidding. Here’s how it works. Nearly all states have laws requiring the tax foreclosed properties to go through some sort of auction. Now, what if it goes through this auction and nobody bids on it? Is the county simply going to forget about the property as if it never existed? Of course not! They want that property to be returned to the tax roll so it can produce some sort of tax revenue for the county government and for the citizens of the county.

So, what happens now? Well, the property becomes available by purchase in a non-auction setting. This is often called purchase by “OTC” or “Over The Counter” methods. Now there are a few different types of Over The Counter methods. One of the most common one is you basically walk into the county office. They tell you how much they want for the property. You stroke a check and you walk out with a deed for that property.

In other states, in other counties, it’s a little bit more involved. They require a little bit more effort. And in this situation, you might have to submit an offer to them. You might say, “I’ll pay up to this amount for the property,” and then the clerk who oversees your offer might have to get it reviewed by the county government or by the county commissioners or the city commissioners until they sign off on the property and they say either “Yes, the offer is good enough” or “No, it’s too low. We’re going to continue and retain our ownership of the property.” So there are a few different types of OTC methods, and what I suggest you do if you’re concerned about how the method works in your area is just simply call the county and ask how it works.

Now, buying Over The Counter can be good, and it can be bad. It can be good because there’s no competition. There’s nobody to bid against. You know the price you’re going to have to pay a lot of times. And also, you can buy kind of at your leisure. There’s no auction to attend so you don’t have to work your schedule around being able to attend an auction or not. And lastly, the properties are usually very, very cheap.

It can also be bad because the properties are usually here for a reason. You have to think about it this way. If there’s 100 properties that go through a tax sale auction and they’re in a room, they’re being auctioned off in a room full of bidders, all interested and ready and able bidders that are buying properties that they think they can make money off, if there’s 100 properties here and 99 of them get sold and 1 doesn’t get sold, you have to ask yourself, “Did the people just miss it or is there something wrong with the property?” A lot of times, there’s going to be something wrong with the property.

With that said, you can still get bargains with these Over The Counter purchases. The key with all investments is to do lots and lots of research and lots of due diligence. Now, when it comes to these properties, you must scrutinize these Over The Counter properties to figure out why they’re being offered this way. You have to figure out why all these other investors at the auction did not purchase them. And once you’ve scrutinized them once, scrutinize them again, and again, and over and over until you’re satisfied, until you’re comfortable and confident that these bidders just happened to miss this property.

Now, I have to be honest with you, 95, 96, maybe even 99 times out of 100, the properties that you’re going to be able to purchase Over The Counter are going to be junk properties. But you can make money buying Over The Counter properties that 1 out of 100 times, which is where it becomes very, very lucrative.

Now, a lot of people teach you to invest solely in Over The Counter properties. When it comes to tax liens, it might be a great way to buy it, but we don’t teach investing in tax liens. We teach buying and selling real estate here. So, as far as I’m concerned, do not – and I repeat – do not use these Over The Counter sales as your only, or even your primary way, of acquiring tax sale properties. That needs to be through the auction setting.

Now if you’re not comfortable bidding at an auction or you don’t know a whole lot about auctions, we offer a load of free information here on The Tax Sale Academy. But for more advanced training, what I recommend you doing is head on over to TaxSaleAcademy.com, browse through the website and consider joining it, and begin your very, very lucrative tax sale investing career. Have a great day!