Transcript:
Hey guys, it’s Casey Denman here from Tax Sale Academy.com
Thanks so much for joining me on today’s livestream here on Facebook. As always, at the conclusion of this livestream, if you’re looking to learn more about investing in tax defaulted real estate head to taxsaleacademy.com, that’s taxsaleacademy.com.
Alright . . . today we’re going to be talking about buying tax sale properties online. And this is such a popular subject. Alright, so back in the good old days, when I first started investing in tax defaulted real estate in 2002, you went to the courthouse. In every single county. There weren’t any online auctions. In fact, most legislation required properties to be auctioned off in person. The laws just weren’t designed for the internet age.
Fast forward a few years and online auctions began to pick up steam. Now, in some states, every single county is available online in some fashion. Hundreds of thousands of tax defaulted properties are sold online. Which, when you really think about it, it awfully cool, right?
I’ve been fortunate enough to have purchased countless properties from my home, while on vacation, while flying, while on a cruise, I’ve even purchased properties at one auction online while I was purchasing properties at another in person auction at the very same time. This didn’t exist 15 or 16 years ago when I started. This has created countless opportunities for many investors.
Alright, let’s talk more about actually buying properties online.
First off, understand that just like the tax sale laws and processes, every area operates their online systems slightly differently.
You’ll always be required to register in some manner. This could be as simple as a quick form you complete. It can also be a complex as providing social security numbers to identity verification, copies of driver’s licenses and all sort of other fun stuff.
Once you register, you’ll also be required to submit a deposit in most areas. A lot of times this will be in the form of a hold on a major credit card. So for example, you’ll provide your VISA number, they’ll place a $1,000 hold on that visa and then if you fail to pay, that hold will act as your deposit and you’ll lose it. If you don’t win any properties, the hold will eventually come off your visa. In other areas, you’ll be required to actually wire funds or mail a check to the auction company or county. Just like a credit card hold, if you fail to pay you’ll lose the deposit. Otherwise they’ll eventually cut you a check back. The whole idea is to eliminate nonpaying bidders. If you’re not serious and if you don’t know what you’re buying, then you shouldn’t be bidding in the first place.
From there, you’ll usually be provided access to the tax sale list. This list might be extremely basic, perhaps just a parcel number, legal description and opening bid amount. It could also be rather complex, and could include an address, a description of the property and it’s conditions and well as dozens of pictures. It just depends on the area and sometimes on the specific property. If they do provide additional information to you like photos or a description, you should NEVER, EVER, invest solely off of their information. You must remember that the county or auction company is auctioning off many properties and any information is provided as a courtesy to you – but they can be wrong. And if they’re wrong, it’s your money that’ll be lost, not there’s. I could go into a number of stories on misinformation from the county, but I’ll discuss that in a separate video sometime.
After you’ve registered, placed a deposit and reviewed the auction list, it’ll be time for the auction. Online auctions can really take place in two primary ways. It can be a proxy bid type auction. This is similar to eBay, where you have an end date and time and a bid amount. You’ll input your highest bid and the system will work towards getting the property for you for as cheap as possible. So if the bid is $100 and you bid $300, your bid won’t increase until someone bids over $100. Once someone does, the system will automatically bid the next highest increment until your max bid is met. Then once the end date and time arrive, the highest bidder will win the property. Some areas do have overtime periods, where a bid placed in the last 5 minutes or 10 minutes or whatever, will automatically extend the end time a certain number of minutes.
The second type of auction is a live online auction. It’s just like you are attending a live in person auction, but instead of raising your bidder card, shouting your bid, tugging your ear or whatever else, you just click a button that says “bid.” If you want to place a bid, then just click that bid button, pretty simple.
Then the final step is to make payment when you win a property. Depending on the area, you’ll usually get a final bill or tally of the properties you purchased, and it’ll include any other fees, such as a buyer’s premium, recording fees or processing fees. Once you have this total, you’ll then either mail a check or certified funds, complete a wire transfer, or in some areas you simply provide your credit card number.
After that, the property is yours once that deed is recorded!
I’ve got another video about the pros and cons of online auctions that I’ll link below, but I do want to give you just one pro and one con in this livestream.
The primary benefit to online buying is obviously going to be the convenience factor, right? It’s so easy that anyone can just logon and buy tax defaulted real estate. You can do it from your office, living room or even smart phone while on the go. It’s extremely convenient.
But along with this convenience also brings up the biggest disadvantage when it comes to buying online, which is competition. If it’s so easy that anyone can do it, then well, anyone can do it. The barrier to access the auction is an internet connection and registering for the auction. Which both is pretty easy. Online auctions typically have much more bidding activity then in person auctions. At a live auction, you must take the type to physically attend the auction – they just require more effort and this certainly eliminates many potential bidders.
So the good and the bad of online auctions is definitely the convenience factor.
I always recommend that anyone interested in tax sale investing attend as many auctions as possible, whether they’re online or in person. The more auctions you can attend, the better, as your odds of landing a successful investment property will grow dramatically.
That’s it for today’s livestream. I really hope you’ve enjoyed it. If you enjoy these livestreams, be sure to let us know by subscribing to our channel and clicking that thumbs up button below this video. We also welcome your feedback and suggestions on future videos so we’re able to serve you the absolute best we can.
And of course these livestreams and the videos we offer are only just the beginning when it comes to the training we offer. If you’d like to take advantage of our more advanced training, be sure to head to TaxSaleAcademy.com. That’s taxsaleacademy.com.
That’s it for today guys. Make it a successful day.
Take care. Bye bye!