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.
In today’s podcast episode I want to discuss the difference between the veteran tax sale investors and the new tax sale investors. Now, for the sake of this episode we’ll refer to the vets as those who have years and years of experience and tax sale success under their belts. The new investors are those very green to this industry. Regardless where you fall on this spectrum, you’ll serve to learn something in today’s podcast that will help you grow your business.
Something else to note is that this episode is NOT intended to knock or poke at new investors. Everyone starts somewhere and by you listening to this podcast you’ll be on your way to successful faster than many of the others. If you take the time to learn and apply what the veterans are doing, which by the way has apparently worked for them for years, you will certainly reap the benefits of a shortened learning curve.
So I’ve personally been in the business for closing in on two decades now, I’ve invested in numerous states, have attended more auctions than I remember and have held and interest in more than a thousand properties. I’ve also become friends and acquaintances with many others who have been in the business just as long or longer than I have. Additionally, I’ve had the privilege of teaching thousands of new investors which has also served to advanced my own personal knowledge and experience.
Speaking of that, many of those new investors are green to this industry. Some just heard about tax sales days before I began working with them. Others knew the terminology but not much else. To say I’ve worked with a number of brand new tax sale investors would be an understatement. I have worked with many, many new investors.
When I compare these two groups, the vets to the new investors, there are five distinctions that I can easily make. I want to go over each one of these and show you a few of the differences. I’ll also give a few tips on how you can better prepare yourself for the tax sale success you’re after.
The first one is that veterans have a better understanding of tax sales. Tax Sale investing is a simple business when you first hear about it, but there are a number of different aspects to this business that are only realized once you’ve been in it for a while. It’s only after you’re in the business that you begin to learn about the tax sale process – the foreclosure, the auction itself, the title issues, the steps that YOU must take as an investor. In most areas, the easy part is simply buying the properties and then signing the docs to sell them. It’s the part before the auction and between the auction and the closing stage that most people completely overlook. With title issues, for example, how can you most effectively deal with them? There are a number of different ways, yet this is a topic that just crushes many new investors.
My Advice: As a new investor, you need to take the time to review the laws, take a look through the rules, FAQs, become involved in trainings like this one, go to auctions, talk to other investors, discuss this business with anyone you can find who is doing it successfully and ask for their help and advice. Much of the knowledge around the understanding of tax sales must come with time, but you can get a jump start on that process with some effort.
The next one is that their research is just plain better, more accurate and more efficient. I’ve watched over the years as new investors get into bidding wars over properties that I personally wouldn’t have given a nickel for. We’re talking about land locked parcels, 5’ strips of land, and even those who will pay $92,000 for an island that’s under water at high tide – which is a story we discuss in tax sale playbook. Meanwhile, the veterans in the room watch this process unfold – nervous and embarrassed for the buyers of these properties. The difference is that the veterans understand the importance of accurate and complete research. They also understand how to research properties in a manner that is extremely efficient so they don’t miss out on unnecessary properties while bogged down.
My Advice: Start researching properties today. Research everything you can about a property online, then drive by that property in person. Compare your online notes to your in person notes. Review previous auction lists, find out what sold really really cheap and really really expensive then figure out what. Do your research on those properties. Use the county’s tools, use the publically accessible tools like Google and Google Maps, do your homework. Your goal should be to learn everything about a property. If you do that you can’t lose – obviously it’s difficult to know what happened 100 years ago on that property, but your goal should be to learn as much as possible.
The next major difference I’ve seen are that the veterans use processes. I remember the first time I went to an auction and paid a lot of properties – it was like a dozen or so. After a few months I realized I had completely forgotten about one of those properties. Stupid and silly mistake, but the vets don’t make those mistakes. Many will use a flow chart or spreadsheet of sorts – it’ll take them through the research phase to the auction itself. Then when they when a process, they’ll input that into a system. Then they have set time periods for specific tasks – maybes it’s clear title, market the property or whatever. From there, they take it into a closing timeline. It’s a very well oiled machine. It’ll allows them to be efficient.
My Advice: When you’re starting out, you might not need spreadsheets for your one or two properties. But I suggest finding some way to track progress anyhow. Write down all of the steps you THINK are required and then use your cell phone to remind you. This goes for everything tax sale related – use preauction checklists, then timers for drivebys or the auctions, and then after you have purchased something, begin tracking the property. Be meticulous and organized in all things tax sale investing. It’ll make your business operate much more efficiently which means you’ll make more money easier, in the long run.
The next one are that the vets will utilize slightly more advanced tactics. This applies through the entire business as well. They might have subscription services and special software they use for research for example. And then they could be buying a specific property type to sell in a specific manner – I’ve give this example before but there is a gentleman here locally that only invests in very rural mobile home lots. He’ll buy them cheap because it’s not a popular product type, then he resells with ower financing and high interest rates. This provides him with cash flow for years to come while not having much competition in the meantime. It’s his own little niche. Many of the veterans are utilizing slightly more advanced tactics than beginners.
My advice: Starting out, play it simple. Learn the business, go to the auctions, make money, allow your tax sale knowledge and skills to advance before getting in over your head. As you become more and more aware of the tax sale business and who YOU are in this business you can begin to specialize some. Like the example above, you might hate the idea of collecting small lot payments every month and the bookkeeping that goes with it and that’s ok. Find out what works for you by becoming self aware as you grow in this business.
And that’s the last one, the veterans know how to grow. Many of the investors I saw back in the early 2000s are still in business, and their businesses are much larger now than ever before. Part of the reason they can grow is that they know why and how to reinvest their capital into the business – that could simply mean a part of the profit goes back to by more deals, but in many cases it’s a reinvestment into more staff, equipment, training or that kind of thing. Tax sale investing has been around for more than a thousand years and people have made money this entire time. It’s not going anywhere, the question is will you set up your business to make sure you aren’t going anywhere either?
Here’s my advice: As a new investor, it’s easy to take the short term, make money fast, take money fast mentality. If you do something once and act like it’ll never happen again, then it likely won’t. From your very first transaction, reinvest into your business. And this also, of course, includes yourself. Put money back into your account for buying properties. Take the time to listen to trainings like this one to learn. Take the time to invest in yourself so that you’re gaining experience, knowledge and capital as you move forward. Begin planning to grow your tax sale business from day one, before you even get that first property.
So there are five of the major differences I see when we compare veterans to new investors. The different aspects of understanding, research, processes, tactics and growth. If you commit to understanding how to operate with more of a veterans mindset no matter where you are in your business, you’ll certainly experience the growth and success you desire out of this business.
I truly hope that this episode has helped you out. If so, please leave us some positive feedback on whatever podcasting platform you’re listening to us on.
We provide more completely free tax sale taining than anyone else in the world and we’re hopeful that we’ve been able to help you. Don’t forget to review other podcast episodes, checkout our YouTube channel, grab your free copy of the tax sale playbook and all our social media for much more help on getting you from where you are now to where you want to go in this business. There are links for everything in today’s show notes.
And when you’re ready for our most advanced step by step training that will allow you to substantially shorten the learning curve, just head to taxsaleacdemy.com and become a member of the academy.
Take care, bye bye.