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.
In today’s livestream we’re going to show you how to perform preliminary research on tax sale properties.
Before you even think about buying any property, it’s extremely important to understand exactly what you’re buying. You must know everything about it so you know your investment is safe. But to know everything possible about a specific piece of property, can take lots of time and lots of research.
It’s also important to understand that if you don’t research every property on your tax sale list in some manner or another, there’s a good chance you’ll end up missing out some very valuable properties, which means there’s a chance you miss out on some incredible investments and we don’t want that either.
So, you need to research every property, but you just don’t have the time to do that research.
What I’m holding is just one tax sale list. There’s like 50 properties on here for this week. There’s another five counties I’m looking at on my screen, then two weeks later we have even more auctions. Millions of properties get auctioned off and I need to research them all.
So, what’s the answer, what are you supposed to do? How can we get all these properties researched?
Well, that’s where something called preliminary research comes into play. By following the steps that we’re about to discuss, you can determine whether or not you should invest more time into researching that property.
And this process should take no more than a couple of minutes per property, and often times in just a few seconds you can rule piece of property out. What we’re about to go over is the very first step I take after I get ahold of a tax sale list.
Ok, let’s go step by step.
1) Scan the listings. The very first step is to look over the list. The first thing is to check the bid amount to make sure it’s in your budget – then keep this figure in the back of your mind. Obviously, if you can’t afford it, then don’t research it. Typically, the list will have the address and/or the legal description. You should be familiar enough with your market that you know where this property is located. Take a look at the subdivision name and/or address and determine where the property is. This should immediately clue you in on whether you should even continue. This first step often times cuts a list down by about 50% for me. If there is one subdivision listed in the legal description that keeps popping up over and over again, then take the time to figure out everything you can about that subdivision. Perhaps it’s a great subdivision or perhaps it’s a subdivision with worthless lots and you can skip all of those properties. If you’ve been through my academy you’ll also know that this is a good time to scan the legal description to see if only a portion of a lot, like a 5’ sliver is being sold, which is very common. That’s too advanced for a YouTube video, but just understand that by scanning the listing you can immediately decide whether to proceed or not with a specific piece of property and you can cut that list down quite a bit.
2) If you’re not familiar with the area, then it’s time to dig in a little deeper. If an address is listed, ill search it in Google. I usually just highlight, right click, then hit search with google. It pops up on a map within 2-3 seconds and if I’m familiar with the area I should know within seconds if it’s an area that I want to consider investing in or not.
3) If an address isn’t available or if it passed the area test, now it’s time to dig a little deeper. Let’s take some of the information from the listing and begin to search it in the property assessor’s records. These are the reports used by the county to tax real estate, which can contain quite a bit of information about the property including things such as the building type (if any), building size, condition, age, property size, any other improvement information and the tax assessed value. You should be able to take a quick look at this information and determine if you want to continue pursuing this property or not. Scan the report over, figure out what it is and ask yourself if you want to invest in it or not.
4) If you decide to move forward from there, it’s time to really start looking at the value of the property. There are a number of different ways to do this, but the idea is to find comparable properties that have recently sold that will help you to determine the value of your property. Zillow, Realtor and a few dozen of other websites can be helpful for this – there’s a lot more to it then looking at a website, but they might at least be able to give you a basic idea of the value. In fact, many property assessor reports will also show comparable sales for a subdivision which can be an even better option to help you with a quick value. We’re not valuing it to bid on just yet, we’re just valuing it so we can determine if we should invest more time in the property or not. Depending on your expected margin, you can decide whether to continue moving forward or not for that property.
5) From there, you’ve made the decision that it’s passed the first four steps and you’ll buy it if it meets the rest of your criteria. Now it’s time to transition from the preliminary research stage, to the much more refined research stage. You’ll want to check GIS reports, city or county building departments, code violations, GIS, flood zones, dial in your value, drive by the properties, and all sort of other stuff that make up the comprehensive research.
As you can see through the first few steps, all we’re doing is becoming more and more thorough in what we look for. It starts off with a quick scan, then move to a quick google or map search, then a property assessor’s search, then we value it . . . if at any stage in this process it doesn’t meet our guidelines, then it’s time to stop and skip that property before moving onto the next one. All we’re doing is digging deeper and deeper into that property to see if it passes all of our tests or not.
By the time you reach the end of the preliminary or quick research stage you’ll have only spent a few minutes on the property, at most! And that’s the idea. Use this process in order to be efficient with how you research.
Then of course, if it does pass through the preliminary stage, you’ll be able to invest more time in it. Unfortunately, there is going to be a lot of junk on tax sale lists and it’s your business relies on you being able to efficiently and accurately work your way through researching that list.
I hope you’ve enjoyed today’s livestream on prelimary research. 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.
And of course these livestreams and videos are only the tip of the iceburg 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!