Tax Sale Bid Sheet

Transcript:
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 the bid sheet that I use at tax sale auctions. I’ve been going to auctions for close to twenty years now and I’m confident that I’ve perfected the auction bidding process that works best for me. My suggestion to the new investors is to start here and then modify my process for how it suits you best. For the experienced investors, take the information we’re about to discuss to see if you can make your operation more efficient.

Now, one thing I mentioned in a video last week was that I typically treat in person auctions and online auctions the exact same way. Obviously, the research aspect and everything prior to the auction time is the same. I take the same exact things with me to both in person and online auctions. I keep everything the same. The only difference is that I’m looking at a computer screen in one and I’m sitting in an auction room in another. Now, as you’ll see there are some adjustments that could be made. But I’ve used this method successfully for many years. Not only is it being familiar with this process, but it’s also worked well for me so I see no reason to change it now.

Alright, everything starts pre auction. Much of what we do as tax sale investors involves research. This is the bulk of the time we spend . . . or should spend in this business. This episode will assume you have your research dialed in and you’re ready to go in that regard.

As I’m compiling my research I’ll usually print out the auction list. This helps me to keep everything in order. It also allows me to make notes on the hard copy list. Now, you can leave this information on your computer, but when you’re researching hundreds of properties it can become tedious looking at a computer screen, trying to go line by line, hoping you don’t make a mistake. With a printed list, I can take my pen and make a checkmark. That’s how it works best for me anyhow.

Now, as I’m researching properties I’ll have a spreadsheet open that I’ll use as my bid sheet. You can use excel if you’d like or even Google Sheets. This is what your entire auction will be based off of. It’s pretty simple, but extremely important. Inside the tax sale academy, we actually provide a template for this for our members. On this bid sheet I’ll include the lot number, property number, item number, whatever you want to call it. It might be 1, 2, 3, 4 . . . it’s the order in which the properties are being sold. And I will list every single property, even if I don’t have any intentions to bid on it. This keeps my sequence in check. I have seen far too many people bid on the wrong properties by mistake. By listing every property, I can go down the list one by one.

I’ll also include the parcel number to the property. This is to serve as a checks and balances of sorts. I’ll cross reference my bid sheet with the auction sheet to make sure I’m constantly on the correct property. In some cases the auctioneer will even announce the parcel number, which allows me to simply keep focus on the bid sheet. My bids have always been very accurate, which is in part due to this double and triple checking process.

I’ll also include some notes about the property. This is more or less to fulfill my curiosity during the auction and it allows me to analyze the sales price. The notes will be 5-10 words about the property. And I’ll include notes regardless of whether or not I’m interested in buying the property. The notes could be something like swamplot or landlocked. Or small block house, 850 sf, poor condition, or nice lot, $150 hoa fees. Just something to give me an idea of what I’m looking at. If I’m only looking at a tax sale list that has a simple legal description and parcel ID but nothing else, I have no idea what’s being sold. If a property sells for a dollar or ten million dollars, it would pique my curiosity and sometimes causes me to lose focus. Likewise, when a property sells for substantially more or less than I thought it would, I want to know why. What did I miss? Did I make a mistake somewhere? Or was the sales price a result of increased or decreased competition. I’ll mentally compare my notes on the property to the sales price and then can analyze it deeper after the auction.

I’ll also include the value of the property. And this is a value that I had quickly established after doing my research. It’s a ball park value that also helps me to determine why people are bidding what they are, it provides me with a data point that I might need to analze later and it also tells me how I did if I was to win a property.

Then we have the all important max bid amount. There are numerous ways that you can come up with this amount. In The Tax Sale Playbook I discuss a principle I use called ratios. And there IS NOT a specific ratio I use for everything in every area. But essentially what I’m doing is creating a method that I can follow based on the required margins, without involving emotion. If there is lot valued at $3,000 then I won’t pay more than $1,000 for instance – since afer we factor in any and all possible expenses, our margin gets eaten up real quick. So many people run into the issue of letting their emotions guide their decisions to buy. If that lot is worth $3,000, why not pay $2,000 for example? Well, you have taxes, you have deed fees, you have possibly title clearing fees, commissions and all sorts of other stuff. Likewise, when you’re not doing as well as you think you should, you tend to inflate the potential margins without good reason. So my suggestion is to have a strict, ratio or fomula that you follow closely. Do not allow yourself to vary from it. Then using this formula, determine your max bid amount. This amount goes onto the bid sheet and this is the number you MUST stop at when you’re bidding. That must be a non negotiable with yourself.

Next to that you’ll have a section to record your sales price. I include this for a number of reasons. The first is that it makes me focus on what’s happening. If I am dedicated to writing down each winning bid, I’m going to pay attention and I won’t miss any of the properties I want. It also serves as yet another way to keep my bid sheet in order – to know which property we’re auctioning, I’ll simply look at the last winning bid I wrote down.

And as I mentioned before, I want to be able to analyze that list in the future. After the auction is complete, I’ll actually keep my bid sheets. These will now serve as a bid results list – in many states the auction results are public record but might only be available after an exhaustive request process. Instead of going through that I’ll keep my own. Then I can analyze the list in the future to determine whether or not that auction is worth attending again. When you’re attending many auctions, it’s actually fairly easy to forget the results you had at previous auctions. Even if you didn’t win any properties, there’s still a strong possibility it’s worth going back in the future. So I’ll take all of these bid sheets, put them into a large tabbed three ring binder and will organize them according to state, county and date.

So that’s pretty much it for the contents of my bid sheet. Now let’s go over a couple of other quick suggestions:

I’ll print my bid sheet in a horizontal or landscape method. This allows me to see everything spread out – that’s just a personal preference, you can print it any way you’d like of course.

Something else I’ll do is color coat every other line, again to keep me organized so I don’t make any mistakes. I’ll typically use white for one line and a light gray for the next. And I’ll also use a sheet of blank paper to cover up everything below the property being auctioned as I work my way down the list.

When I win a property I’ll circle the entire line with my pen. In addition to that, if I’m expecting to win a number of properties, I’ll write the lot number and price down on a separate piece of paper and then I’ll cross reference both sets of notes when I check out.

When I’m attending an online auction I’ll typically bold or otherwise highlight the properties I’m planning on bidding on. This way I don’t miss any.

I used to do this for in person auctions as well until I noticed someone behind me was peering over my shoulder. Whether he was trying to use my notes or just being nosey I still don’t know. But I stopped using obvious identifying factors for the properties I wanted. Instead, they just look like the rest of the properties on my bid sheet. The only difference is that they’ll have a maximum bid, opposed to a line. In extremely crowded auctions, I’ve even used a generic number like $7,777 for all of the properties that I do not want to bid on, as a code for myself not to bid and as a way to confuse peering eyes. Maybe it’s overkill, but it certainly doesn’t hurt anything.

And lastly, as an in person auction I’ll put my bid sheets into a thin ½” or so three ring binder. This serves as a way to protect my max bid amounts, it provides me with a hard surface to write on and it also is just a pretty easy way to carry everything around without having to mess with a bunch of loose papers.

So, there you have it. That’s the bid sheet process that I’ve been using successfully for many years now. So much of it is all about insuring exactly what I do is accurate, is easy to real and makes sense real time. You can certainly just write your bids on the auction sheet or bring the local newspaper with you. There are plenty of ways to do it. But the bid sheet I just went over provides an efficient, accurate way for you to organize your bids.

I truly hope that this episode of the tax sale podcast has helped you. If so, please take a few seconds out of your day to leave us a 5 star review on whatever podcasting platform you’re listening to us on today.

If we can help you in your quest for tax sale success, just head on over to TaxSaleAcademy.com. Again that’s tax sale academy.com and there are also a bunch of helpful links in today’s show notes. Take care and we’ll see you next time, right there on The Tax Sale Podcast.