Transcript:
Learning From Other Bidders
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 I want to discuss something that has had a tremendous impact on my career as an investor – learning from others. Not necessarily mentors, coaches or anything like that but simply learning from other tax sale investors from afar.
If you’ve read my story you know that this is something that actually got me into this business in the first place. I write about it in Tax Sale Playbook, but I started as a real estate agent. Since I was just 18 noone would list their house with me and I resorted to selling vacant land. So I’d send out thousands of postcards telling people that I’d sell their land for them. This required me to research county records in order to get addresses to send the cards to. As I was sending out these cards, I’d look for the same name multiple times so I wouldn’t send them duplicates. Eventually there were a handful of names that I began to see . . . over and over and over again.
So I did research on them. I realized that they were the ones who owned a lot of real estate, belonged to the best country clubs and had the fancy cards. A couple even had airplanes – now I was 18 and I thought that was the coolest thing in the world at the time. So I dug farther and realized most of these folks were heavily involved in tax sales. Long story short, that is what led to my involved in this business. And once I started going to tax sales, I began to recognize some names and faces and I started to learn from these other investors.
Now, before we continue I never want or think you should copy anyone. Every single investor has their own way of doing things. And what you see with the outer working of their business might not be indicative of what’s going on in the inside of their business. I remember getting frustrated at an auction when this younger woman, professional dressed kept buying up tax lien after tax lien in one specific county and I kept wondering how in the world does someone that young have so much cash. Well, she didn’t – but she worked for a large institutional investor who did. So it’s important to learn what you can from other investors but understand that you’re only seeing one piece of the puzzle.
Alright, one thing that I recommend is to do some research of tax sale results lists. Spend some time doing it. Not only will this allow you to figure out what’s selling in that area, what the prices are and how much the typical margins are, it’ll also allow you to put some names with the big investors in that area. In some cases the county will list the name of the winning biddrs on their auction lists. In other areas it might require a little more effort with some research of the parcel number and deeds, but nonetheless it’ll certainly be worth it.
Once you have the names of the big investors in one area you can go ahead and start analyzing what they are doing. Again, we aren’t trying tocopy what they are doing, but instead we’re trying to learn from them so that we can develop out own strategies.
And that’s one of the key things you can learn about other investors. What strategies are they utilizing and seeing success with? And perhaps this requires not only research of the winning bidder but also their company or the agents they utilize. What are they doing with the properties? Are the holding and renting or flipping? What type of profit margins are they getting? How are they marketing the properties? Are they doing anything out of the ordinary that catches your attention? Do you know anyone who knows them where you can maybe pick their brains to see if you can learn something new?
That’s one of the coolest things about this business is stategy. Seeing what others are doing and applying btis and pieces of that to my business has been invaluable for me. Even if you spend hours researching one person in your area to get one little nugget of information that you can use it would certainly be worth it.
Let me give you a few examples:
One gentleman not too far away buys nothing but mobile home lots out in the middle of the national forests. Very rural lots that are somewhat undesirable for the most part. This limits competition and the prices are low because the product type isn’t all that desirable. Then he markets these properties with owner financing. Usually it’s something like $100 down, $100 per month at 10% interest. Over the years he has accumulated hundreds and hundreds of these lots where he is receiving payments. I’d imagine around 10-20% default at some point which further increase his bottom line.
I’ve got a member in The Academy who purchases a little bit of everything, but the way he markets the properties is what sets him apart. He’s a very capable website builder and internet marketer and his website reads more like an ecommerce store than a real estate website. You simply log in to his website and browse the listings until you find a property you like. You select the correct bubbles for payment options, input your information and you put money down to hold the property. Then a VA, virtual assistance, sends final details to the buyer including wiring info and it’s done. Zero communication between the investor and the buyer.
I’ve got another member that has family in the mobile home business. He’ll buy mobile home lots for cheap, then he partners with his family member to bring and install a mobile on the property and they sell it as a package and split the profits.
There are three strategies used by folks that I know. When we look at all the different areas that we invest in, we can certainly come up with many more strategies as well.
Something else to note is that strategies can and do change from time to time. For many years I did nothing but cheap vacant land. Then one year I changed course and bought 40 or 50 houses simply because of the opportunity I had at that time. Then I went to larger stuff – acreage tracts, subdivisions, commercial properties, that kind of thing. Then I went back to lots. So, not every investor is a pick one strategy and stick to it forever type investor. But when I look at those investors who have true longevity, there always something we can learn even if it’s not our style or something that wouldn’t work for us – but we can still apply it in some manner to what were doing in our own businesses.
This is an incredible business with the opportunities near limitless – there is hundreds or even thousands of ways for us to make money as tax sale investors when you account for all of the different angles. The invsestors who have long term sustainable success are the ones who have sought out the strategies that work best for them. So take the time to do a little research, do some digging, find out what has worked for those investors nearby that have achieved long term success and then decide if it’s something you can apply to your own business.
Hopefully this episode has helped to provide some strategy on how you can dive into other investors’ businesses to see what’s working for them and how YOU can apply it to your own business. If it has helped at all, please do us a huge favor and leave some positive feedback on whatever podcasting platform you’re listening to us on right now.
For more information on strategies for success as a tax sale investing just visit taxsaleacademy.com where we teach about all this and so much more inside the academy.
Thanks so much for taking the time to listen. We’ll see you next time, righ there on The Tax Sale Podcast. Take care, bye bye.