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.
Alright, today’s episode hopefully changes your entire perspective on how to properly invest in tax defaulted real estate. And the truth is, it might just change the way you look at plenty of other stuff in your life as well.
I still consider myself fairly young. I know I have some listeners that are 15 or 16 and others who are 75 or 80 years old. But regardless, I consider myself young. When I was even younger everyone would tell me all the old adages . . . revolving around how quickly time flies. Now, I am constantly asking myself where the week went, where the month went or where even the year went. To the older listeners, this sounds obvious. To the younger listeners, it sounds exaggerated. The point is that time passes by whether we want it to or not, and it seems to do so, at times, at rapid rates.
Now, I could sit here and tell you how important it is to get going, to get started, to pull the trigger, but this is a tax sale podcast and not an inspirational or motivational podcast. The best time to plant a tree is twenty years ago, the second best time is right now. If you want to get started, you’ll look back one day and wish you had started sooner.
Now, when we apply it to tax sale investing, it’s such a concept that many in real estate don’t take serious enough. I have a friend who is an airplane broker. He also invests in real estate and we were talking just a couple of weeks ago. He was buying a home to hold as a rental. He’s buying a number of homes and is looking to leverage his capital so he’s financing a few.
He tells me the process has been mind numbing, as if I didn’t already know. First, you submit an offer. Then you get a response a day or two later. Then you go back and forth until you have an agreement. Then the title company does their thing, the lender gets all these docs, then asks for more docs and more, then by the time everything is approved you have a month or a month and a half that has passed.
He kept telling me how ridiculous and outdated the process was. He said he could sell a ten million dollar jet in just a matter of days. The fact is that he’s right. Real estate by nature is a slow developing process. The key is to find a way to speed it up that works for you.
I’m such a huge fan of using alternative strategies. I’m big on buyer’s lists, selling tax deed properties as-is, and closing extremely fast. I’m not just a fan because I’m inpatient, I’m a fan because without that sort of speed I would’ve never survived the early years in this business. When you’re a tax sale investor, especially a new investor with limited funds, your product, your inventory is what you purchase. Just like a retail store doesn’t make a dime until they sell whatever it is they are selling, you won’t make a dime until you sell or otherwise profit from that investment. And the longer it takes, the less you’re making per day.
Let me give you an example. Let’s say I had $1,000 invested into a lot. I did well with it and if I sold at full price I could wait 45 days, triple my money and get $3,000 for it. That’s great. But what if I just decided to wait only 7 days and take $2,000 for it. Sure, I’d leave a thousand bucks on the table, but the speed would often make it worthwhile. It meant that I could reinvest that money and by the time that 45 day period expired, I would’ve made substantially more money in the end. When you look at it from just a numbers perspective, you could make $44 a day selling it at the higher price of $143 per day by selling it at the lower price in a shortened window.
Obviously it doesn’t always work that way, but being able to quickly move real estate provides such an advantage to investors. With inflation factored in, nearly everyone that lives an average length life span will make more than one million dollars. The problem is that the one million dollars might come over 20 or 30 years. What you must figure out how to do is to make that same amount of money in a much shorter period of time. That’s what the 6% of the population has done who has become millionaires.
By turning properties quickly, it allows you to roll your money over extremely quickly, it allows you to significantly limit holding costs including the amount of time your capital is tied up, any insurance costs and taxes, it limits your liability period, it limits the amount of lost opportunities you weren’t ready for. It just allows you to grow your business much quicker.
I’ve got a number of ways to sell properties quickly that we discuss inside the Academy – and we also touch on in this Podcast and on our YouTube channel. Typically, they’ll revolve around prearranged buyers and/or a very targeted audience of ready, willing and able buyers.
Now, in exchange for selling properties so quickly, you’ll usually need to sell at a price slightly less than perhaps market value. There will always be a threshold that makes you comfortable between leaving too much money on the table and leaving too much time on the table.
But, of course, selling it below market value is perfectly acceptable if you purchased it and went into that investment correctly. If you need to get full market value or even over market value in order to make money, then that means you likely paid to much money for the property in the first place. Personally, I’d rather leave money on the table then leave time on the table. The money can always be made up, the time can not.
So as you enter your next investment, I want you to be very aware of your selling strategies. Don’t just factor in the same basic stuff – cost, taxes, insurance, closing fees. Factor in the most important aspect, which is time. How long will you have that property? Based on your expected returns, what are you making per day off of that investment? Is there a way to make an equally as profitable return in a shortened period of time?
I never want you to go into investments blindly and I actually don’t recommend that you just follow the crowd and do the same thing everyone else is doing. If you can, and that suits you, that’s great. But understand that there are different ways that are often better. And, in my opinion at least, selling properties quickly is the key to long term sustainable success while growing your business exponentially as a tax sale investor.
That’s it for today’s episode.
You can probably tell that this is something I’m extremely passionate about. As I mentioned earlier, this is the very reason I was able to see success in this business. It’s also something we teach in great detail about inside the tax sale academy. If you’re ready to get started with training that’s actionable and easy to implement through The Tax Sale Academy, just head to taxsaleacdemy.com and click on join to become a member and get started.. Again, there’s a link in the show notes, but it’s taxsaleacademy.com and click on join.
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Have a wonderful day. Take care, bye bye.