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Transcript:
Welcome to the Tax Sale Podcast, where tax sale investing is made easy.
I’m Casey Denman, a tax sale veteran, expert, and trainer, author of the tax sale playbook, founder of the tax sale academy and your host here on the tax sale podcast.
Thanks for joining me on today’s podcast, and as always, at the conclusion of this podcast, if you’re looking to learn more about investing in tax defaulted real estate head to taxsaleacademy.com. That’s taxsaleacademy.com.
Today we’re discussing the strategy that I use that took my business from a mediocre local investment business to something that changed my life, catapulted my career and eventually turned me into the tax sale guy. It’s a strategy that I teach extensively inside The Tax Sale Academy and one that I wanted to share with you guys.
I’m talking about cherry picking properties. Let me provide you with a little history to add some context to this strategy.
When I first started investing in real estate I invested exclusively in my hometown. It’s what I knew, where I had contacts, where my experience was, and well, it was obviously very convenient to me. That’s what everyone does, right. Invest where it’s easy, where it’s close…that supposedly makes the most sense.
So I went to a few auctions and bought a few properties. There were and there are lots of properties available locally. And I live in a great real estate area – it’s not like it’s depressed or anything. But there are plenty of properties available and most areas are like this.
So what I was doing is going to every auction that was offered at the courthouse. Usually one or two a month. Every month I gathered up my money, then chose a few properties that I knew would be the most profitable based on my objectives. My objectives were to get in, get something safe, presell it if I could, and get out and move on to the next property. Those were my objective. Yours might be different, some house flippers are different, builders are different, everyone is different and that’s ok. But my objectives involved me picking just a few specific properties that I liked, even though there were plenty of others that could make money too.
So, every auction I’d buy one or two properties. I’d make some money and I’d be happy. I’d go to the next auction and do it over again. Then one day it donned on me. Sure, I could make a great living doing this. But, I’m always going to be capped. There will always be a ceiling on my income using this method. The number and types of properties my county offered just limited my growth.
So I began to analyze exactly what I was doing. While it wasn’t apparent to me beforehand, I realized that I was choosing very specific properties based on my objectives and how I could easily line up a buyer for these properties. Essentially I was cherry picking the best properties for my business.
When I decided I wanted to expand, I could’ve went two directions: I could have opened my objectives up, which would’ve meant buying properties in that same geographical area that were a little more risky and I’d still one day be capped. Or I could open up the areas I was investing in, but use the same method of cherry picking properties.
I chose the latter. I went from cherry picking properties in my hometown to cherry picking properties in the county next door. Then another county and another. Then I went to another state and another state. Eventually I went from investing in 10 or 15 properties every year in my hometown to investing in 75 or 100 properties every year in dozens of different markets. The more I took this approach, the more my income rose.
You will likely develop specific investment objectives early in your career based on your preferences among other things. And we’re talking about things such as your budget, the time you have available, your ability to market properties and create buyers, your comfort levels, these types of things. Maybe you prefer single family homes. Or maybe you’re just a vacant lot guy or girl. Perhaps you like the acreage tracts. Or maybe your specialty becomes abandoned grocery stores, old schools or something else random. It doesn’t matter. What matters is that the more areas you attend, the more chances you’ll have to cherry pick the specific properties that work best based on your objectives. Essentially, you can cherry pick the most profitable properties from every market you go to.
Perhaps you have zero competition where you’re at and that’s great. But in order for your income to continue to grow, you’ll need to be able to gain access to more and more properties. And I’m not going to say it’ll be the easiest thing you’ve ever done. It’s definitely easy to invest locally. And as you expand you’ll certainly experience resistance. That resistance might be from inside of you with uncertainty that you must overcome through educating yourself or that resistance might even come from the locals in those areas who you think don’t want you there, but you must overcome it whatever the case.
It’s kind of like every other business model. Take any of the successful nation wide companies. They start in one area, then expand, then expand, then expand some more. And this is exactly what is required of you in order to grow your tax sale business.
My suggestion is to start local, of course. Then when you reach your cap there, which might come from there being no properties available that fit your objectives or you might be buying every single property that fits your objectives, but eventually you’ll reach your cap. Then begin to expand to another nearby county. Then another county. And all the while you should be analyzing different areas. Maybe there is one area 500 miles away with an abundance of the types of properties that suit you best. In that case, skip everything in between and go there if you feel it’s right.
Cherry picking properties from multiple markets requires that you have familiarity with many markets. And this comes through educating yourself and understanding what’s going on well in advance of you actually investing a single dime there. So while you’re learning to be a tax sale investor right now, why not go ahead and allow yourself to be curious. See what’s out there in other areas in addition to your hometown market. See what properties types exists, how their sales process operates, see how their economy is and keep all this information in the back of your mind.
At some point in the future, you’ll likely end up cherry picking the most profitable properties in one of those areas. And when you apply this strategy of cherry picking the most profitable properties to your business, your tax sale business and income will begin to grow exponentially.
That’s it for today’s podcast guys. If you’d like more information on investing in tax defaulted real estate, including trainings on how YOU can cherry pick the best properties, be sure to visit us at TaxSaleAcademy.com. That’s TaxSaleAcademy.com.
Before I sign off guys, I’d also like to ask you a favor. We provide lots of completely free training for you guys. All we ask is that you’ll subscribe to us and provide a like or positive rating to let us know you’re enjoying the content and you find it useful.
Take care guys and make it a successful day.
See ya!