Transcript:
6/15/20
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, we’ll be discussing the digital investor. To many investors, this is a rather progressive way of thinking. To others, it’s undoubtedly the future. Over the past decade more and more investors have been turning online to get started as tax sale investors. And not just from a learning sense. Obvously, my academy, training videos and everything else I produce are found online. But I’m talking about actually investing in real estate.
In years past, real estate was always considered an asset that should be local to you. Investing online seemed foolish. But the truth is that real estate investing from afar is no different than investing in stocks from afar. With the right approach, you can easily make it work. We are in a time where online investing will and should become the norm. That’s right, I said it, it should be the norm. Not only is the entire world going to this direction, but with recent events this process is only going to speed up.
I started investing out of area more than 15 years ago now. And I’m not just talking about the next county over. I’m talking about states on the other side of the country. I’d travel there, I’d spend months in hotels, thousands of miles on the road . . . then we started going online. And I am happy to say I was an early adopter of this. Not because I was smart . . . just because I got sick of traveling so much.
So in today’s episode I want to lay out the framework for a digital tax sale investor. Just know that this is something I can spend hours and hours teaching on. Hopefully, the few things we discuss in this podcast episode help you identify and begin working on the key elements to digital tax sale investing.
The first element is research. The cool thing about this is the internet provides a way to organize information efficiently for the government. I can remember in the early 2000s when I had to physically go into the property assessor’s office to request certain documents. It was an insanely tedious process. Those same records can be pulled now within seconds. What you might not understand is that the records going online were just as much to benefit the government as they were to benefit the public.
And I’m not just talking about property assessor’s reports. This can also refer to just about every other department in the county. Building department, code enforcement, zoning, GIS, tax collector, anyone that has something relevant to the property we’re researching might just have it available online. A trip to the county office is not necessary in most areas. Naturally, some areas are behind times or have very small budgets, but for the majority of the time you can access what you need from the county online, which includes comparable sales data.
It doesn’t matter if you’re local to the property or if you live ten states away. Odds are, your research will begin online.
So as part of investing online, your ability to leverage and utilize this information. Your ability to leverage online resources to research properties is the absolute key. If you can’t do this, you can’t invest online.
That brings us to the next element. You can likely get most of your research done online. But, there are just some things we can’t determine looking at a computer screen. No matter how good we might be, we might not be able to tell if the property is occupied, was burned down last week, has recently had a thousand old tires dumped on it, yes, that’s actually happened before. There is just so much that we aren’t able to tell from our online research that could make a HUGE difference. The solution: get local help. Find someone local to assist you.
That might be intimidating to some, but it’s not. Usually, it’s as simple as a quick Craigslist advertisement asking someone to snap a few property photos. The investment should be minimal. I’ve had locals help for as little as $5 before. Usually I feel bad and give them $10 or $15 instead, but it’s pretty cheap to get locals to do certain tasks. Now, obviously you’ll want to make everything as simple and as easy as possible. If you need property photos, send a map, send landmarks, measurements, make it as easy as possible for them to find. And then have a backup way to reference it. If you know a blue house is next door, ask for a photo looking down the street showing the neighbors, so you can see that blue house you know is next door for reference. Just to make sure that they’re at the right location. But locals can help us immensely as we invest out of area.
Even still, the next element is risk. There is risk in investing. That’s why it’s called investing and not making money, right? There is a certain level of risk involved. Obviously, the best way to invest is to put your own two eyes on the property to make sure it is what you think it is. When that’s not possible, hire a local like we discussed. When you do that, as helpful as it is, there is still risk involved. You MUST take that into consideration. I personally wouldn’t spend $50,000 on someone’s word. Instead, I’d hop on a plane and fly there. But some investors are more risk tolerant than I am and maybe they would drop $50k on a property sight unseen. On the smaller scale to help mitigate risk, maybe you hire multiple locals to do the same exact tasks to confirm your findings. This is something that I’ve done multiple times. Understand that risk is part of the game. Online only investing does slightly increase that risk. Learn ways to reduce it as much as you possibly can.
The next element is the actual purchase. During your research phase, you should have developed your maximum bid. And that should account for any expense and all risks involved in the property. Now, it’s time to bid on the property. This is the part everyone thinks about, and truthfully, it’s probably the easiest part of this entire deal. In many counties, you’ll be able to login to a website and place your bid online. Other counties are definitely working towards this and will be there in the near future. If you can’t bid online directly, determine how you can bid. Sometimes it will be an absentee bid or mail away bid process you can take advantage of. It’s important to understand the rules and their specific process, but most of the time the bidding aspect is the easiest part.
The last element is selling. And this is another one that people tend to struggle with. Buyers begin their search online. Something like 95% of all real estate buyers found their property online. So whether you’re local or not is completely irrelevant. Learning to use the internet for marketing purposes is what separates the investors who make just a few bucks from the one who are ultra-successful. Your marketing efforts should be predominately, if not solely, focused online. Take the time to learn about advertising online, building websites perhaps, most importantly generating leads, selling properties. Learn what you need to do with your specific properties – what your buyer’s expectations are. Put a lot of time and effort into this from day one and you’ll quickly figure out the formula that leads to substantial sustained growth.
So hopefully this episode has helped you understand the framework required for successfully investing in tax defaulted real estate online. If you commit yourself to learning how to successfully perform these key elements, you’ll see lots of long term online tax sale success.
I truly hope that this episode has helped you. If so, please consider taking just a few seconds out of your day to leave us some positive feedback on whatever podcasting platform you’re listening to us on today.
And as always, if we can help in any way we are ready to be of service. There are numerous links in today’s show notes that can help you get started including many that are completely free, as well as a link to TaxSaleAcademy.com where you can grab a free copy of my book Tax Sale Playbook, if you cover the nominal shipping cost. Or go to that same website, TaxSaleacademy.com to become a member of the academy and get access to our most detailed, step by step training.
We’ll see you next time on The Tax Sale Podcast.
Take care and make it a successful day. See ya!