Transcript:
Welcome to the Tax Sale Podcast, where tax sale investing is made easy.
I’m Casey Denman, a tax sale veteran, the author of the tax sale playbook, founder of the tax sale academy, the leading tax sale expert and trainer and your host right here on the tax sale podcast.
Thanks for joining me on today’s podcast. This podcast is provided completely free to help teach you about tax sale investing and is made possible through The Tax Sale Academy. If you’re looking to learn about tax defaulted real estate, in a comprehensive, step by step basis then head to TaxSaleAacdemy.com and click on join. Again, taxsaleacademy.com and click join.
The title of today’s episode is “It’s The Law.” The truth is that there are so many different directions I can take this, but I want to start out with a story.
I number of years ago when I really began to invest heavily out of state I had a situation that changed my entire outlook on operating my business. I actually had a couple extremely similar situations that happened just about simultaneously. But the one we’re discussing today, involves my lack of familiarity with an area.
As most of you know, I’m located in Florida. Born and raised here and intimately familiar with its’ market, laws, and ordinances. But, over the years I’ve actually done significantly more invest out of area than I have locally. There are numerous reasons for this that we discussed a few weeks about on our Investing Out of Area Podcast. But for the sake of this story, remember I’m from Florida.
Anyhow, when I started to invest out of state, there was a northern state that sparked my interest. I bought countless properties there, including one vacant lot. This vacant lot was inside the city limits of an average sized city. At one time it had a house on it, but it had since been demolished. It wasn’t an especially thriving area of town, but there were a couple of new homes going up nearby so I figured since I got the lot so cheap I’d just flip to a local investor. I didn’t have much money invested and truthfully forgot about it for a couple of month. Now, mind you, I bought it in October at the start of the snowy season.
By the first part of the year, that area was in it’s peak snow season. As a Floridian property owner of this vacant lot, the fact that it was snowy season made zero difference to me. Until one day when I received a letter in the mail. I was essentially being scolded for not clearning the snow on my sidewalk. Like any irresponsible property owner, I ignored it.
That letter turned into a written warning, which was also ignored. That turned into a ticket. Not just one ticket. It turned into a ticket every single day of the week, Monday through Friday. Like clockwork, I began to receive citations every single day I’d check my mailbox. If I skipped one day checking my mailbox, I was guaranteed two tickets the next time I checked it. I looked at these tickets and noticed they were all written at just about the same time every single morning. The inspector drove by daily just to see if had complied, and when he saw I didn’t, he’s send another ticket. Long story short, I had a few legal issues that I had to deal with when it was all said and done.
The point of that story is to emphasis the importance of understanding your laws. To me, clearning the sidewalk of snow seemed silly. To the locals, my ignorance had the potential of harming someone when they slipped or had to walk on the road to avoid my property.
More importantly than just the lesson of learning to be a responsible property owner, it reminded me of how crucial it is to understand laws in the various areas I invest in. Without those laws, I stand to get myself into serious trouble.
Let’s take a look at 3 key elements of law that impacts everything you do in this business. These are going to be intentionally broad ranging topics, so understand they aren’t meant to be a granular breakdown of every single law that impacts you:
– The first is the local real estate ordinances. These vary substantially from one area to the next. The enforcement also varies – some cities ignore their own ordinance and others take them extremely serious. Beyond clearing the sidewalk of snow, there are things like weed violations for unmowed yards, trash violations for loose trash in your yard whether you put it there or not, then you have structural ordinances that don’t allow broker windows, that require doors are secure, decks are sound . . . that kind of stuff. Beyond that you have special requirements in some area – the transfer of real estate in certain cities require that you have an inspection performed on any structure there. Otherwise, that structure could be deemed inhabitable or you might start receiving citations. Another example is transfer notices – in some state the purchase is required to submit transfer affidavits to the county to let them know who you are, what your address is and what you paid for the property. In some areas, these have 15 or 30 day deadlines with a daily penalty ranging if you fail to file. There are a number of local oridnances specific to real estate that you must take the time to learn before going into a new area. Ignoring these things in the wrong area can certainly cause you whole lot of aggravation.
– Another aspect involved the tax sale laws. I’ve said it plenty of time that the laws are what we operate on. There is no other way to emphasis the importance of it, without these laws we do not exist as tax sale investors. These are the rules that we not only have to play by, but that allow us to even exist. Being a tax sale investor without the laws that we use, is like being a pilot without airplanes existing. New investors often want to rush through the process of learning these laws and many often think that reading these laws is boring or unnecessary. These laws are everything. And just because you understand one state does NOT mean that you understand another state. Regardless if they’re both even the same exact type of system, every state is different. Some states have noticing requirements where you serve the notices, some states have litigation periods, other states require you to perform various tasks . . . every state is differnet. Please, please, take the time to learn the laws. If you don’t know where to start, I offer a state law guide. You can get a copy when you join the academy. You can also search through your state laws to find the relevant ones. Whatever you do, just understand how important they are!
The last one are the laws that affect real estate. This is another one I could go in so many directions with, but we’ll discuss the two most serious. The first part involved legal documents. We’re dealing with real estate here, not something you should take too lightly. There will be legal documents involved. These same legal documents will be on display in court should you ever get sued. Contracts, deeds and everything in between must be done accurately and understood by the person signing them. If they intimidate you, then just study them over and over. Schedule an appointment with an attorney and have them explain line by line what everything means so you’re more comfortable. The second part involves the way you advertise properties. You don’t want to get into trouble for violating the federal fair housing laws. Making little comment that doesn’t seem like a big deal to you, could violate fair housing laws and cost you some serious money. There are even attorneys who actively seek out bad advertisements. So be extremely careful how you advertise.
This episode is to remind you that the laws govern everything we do. The fact is that it’s extremely easy to work within the laws . . . if your aware of them. As with anything in real estate, the more you know, the better. That’s part of the reason I strongly believe that the successful, long term investor, is always learning.
Thanks so much for joining me on today’s episode. Inside The Tax Sale Academy we teach your all the ins and outs of tax sales investing in a very comprehensive, yet actionable step by step process. You can join the academy by going to TaxSaleAcademy.com and clicking on Join. Again, that’s TaxSaleAcademy.com and click on join.
That’s it for today, if you enjoyed this podcast episode please take just a few moments out of your day to leave us a positive feedback rating on whatever platform your currently listening on. We read every single comment, notice every single 5 star review and are so thankful for each one of them.
Have a wonderful day. Take care, bye bye.