Transcript:
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.
On today’s episode we’re talking about efficiency. We’ll get into five tips to become a more efficient tax sale investor, but before we do I want to really emphasize the importance of this. Sure, the learning the process is entertaining. Hearing success stories can be motivation. Getting involved yourself is incredible.
But, efficiency…..that’s the game changer for the successful tax sale investors. Truthfully, to grow your business, once you have all the basics down, there is nothing more important than learning how to be efficient.
Tax sale investing is a game of numbers. You will more than likely not look at one tax sale list, find one tax sale property, go to one tax sale auction to buy that property and then resell it to make lots of money. The odds are that you will have to research many many properties, you’ll need to attend a few auctions and you’ll need to place a number of bids or offers. Then you’ll need to be able to sell those properties in a manner where you can make money, but you can’t be so consumed with the selling process because you’ll need to have the time to research more properties, attend more auctions and buy more properties so you have a never ending pipeline of profitable deals.
Here’s what an active year looks like for me. I’ll research tens of thousands of properties in numerous counties, I’ll attend a hundred different auctions, bid on thousands of properties, walk away with quite a few that are sold relatively painlessly only to do it over and over again with more intensity and quantity to grow my business.
And the deal is that you don’t need a team of twenty people to do this. You don’t need to have a staff full of attorneys, MBAs and experts to pull this off. YOU can do it. YOU can probably do it without much help at all. But you must be efficient. There is no way you’ll make it in this business for the long term unless you learn efficiency.
So I’m going to go over five keys to being efficient in this business in today’s episode. If you nail these down, your chances of success suddenly skyrocket. Now, full disclosure, as a beginner all of this will be extremely difficult to be efficient at. But that’s ok as long as you keep these in the back of your mind. Understand that efficiency will come as long as your consciously working towards it.
The first step is to know what you’re doing. You’ll fine tune this with time, but initially you should research every related law, review the process, read the FAQs, study the county websites, go to an auction to just watch, do everything you can to learn about tax sale investing. All of this stuff helps you to learn how the process works. Subsequently, you’ll learn what to look for which will help in the other steps we’ll be discussing. If you’re not familiar with your area’s laws or for example, how they handle properties in disrepair you’ll either (a) run into an issue where it costs you lots of money or you’ll spend unnecessary time researching that issue every single time you come across it. Learn what you’re doing and it’ll make your life a lot easier and your business a lot more efficient.
The next step is to learn how to be an efficient researcher. Odds are that you’ll be researching a lot of properties. This research needs to be 100% accurate. Your research = your results. But, you can’t spend hours and hours on each property. To be as efficient as possible, you’ll want to spend no more than 20-30 seconds on the properties you don’t want. Then, if it’s a property you’re planning to bid on you can invest as much times as required. But don’t spend twenty minutes researching every property only to mark it off your list. If you do, you’ll never get through enough properties to even have a chance to buy anything. Obviously, there are plenty of ways to do this. My suggestion is to know your area. Know what areas you do and don’t want to invest in simply by looking at the legal description. This requires you to know where certain subdivisions are. It’s also important to learn to read those legal descriptions so you aren’t buying a 1’ strip of land. You should be able to filter through many properties simply by reviewing the legal description on the tax sale list and nothing more. Then you’ll filter the others by reviewing the property appraiser’s report. Then the remaining few can be filtered with some slightly deeper research leaving behind the best properties you’ll want to bid on. Developing a process for this is incredibly important. I have a video called my fly on the wall training program which is included in the academy detailing the process I use. While you might not use the same exact process I do, that’s ok. Just develop a smooth, accurate and most importantly, efficient process for research.
Attending auctions efficiently is the next step to being an efficient tax sale investor. And this is obviously the one that’s the most difficult to make efficient. It’s hard to be efficient when you’re sitting in an auction all day, right? I get that. But there are a couple of things you can do. First off, if it’s an online auction you already have a leg up. You can log in and watch the auction, perhaps while even doing research for another auction or even attending multiple auctions at the same time. I’ve got a photo in my book, Tax Sale Playbook that is of me sitting in the lobby of a Ramada Inn at a 1970s pacman arcade game with my laptop open. The in person auction in the conference room had just ended, and now I was bidding online at another auction. There are ways to attend multiple auctions in an efficient manner. Time management is something to always keep in mind. Another idea is to use proxy bids, if they’re offered so you don’t necessarily need to be there live. One thing I advise doing is taking an honest approach with yourself. If there is an auction for 500 properties, and you only want one property that you’ll make a few hundreds bucks off of, is it really worth sitting in the room all day waiting for every other property to get auctioned off? Or is it worth traveling across the country to buy a property and profit a grand or something minimal that might not even cover your expenses? My suggestion is to make sure you study the previous auction results and have an idea about the competition before the auction begins. There is no doubt that you will sit at an auction sooner or later and not win a single property. It’ll actually probably happen at the majority of the auctions you attend. But, if you mitigate this time as much as possible and use at as an opportunity to learn, then you’re doing it efficiently in my book.
The next level of efficiency comes when you’re selling. There are so many different approaches to selling it can be mind boggling at times. But, what you should understand is that you can’t commit your entire life to selling one property. If you do, you’ll always be playing the game of catch up. Instead, you should develop an easy to follow and nearly guaranteed selling strategy. When you’re ready to sell your property, there shouldn’t be a guessing game as far as the amount you’ll sell it for, how long it’ll take, how you’ll market it . . . all of this stuff should be predetermined. Obviously, there will be times when you need to adjust on the fly. But, in the perfect world, if you’re able to do something as easy and quickly as simply sending an email which allows you to sell the property and move on, that’s the best case scenario. Again, develop the process that streamlines this for you, follow, tweak to make it better, and do it all over again.
The last thing that must be efficient is the act of growing your business. And this is a lot simpler than you might think. Perhaps it’s time to expand market areas – what is your specific process for that? Maybe it’s learn laws, learn county process, review auction lists, review previous results, learn area, attend auction . . . whatever your process is, have one. Another step to growing your business is your reinvestment strategy. You can’t pull every dime out of your business after every deal. Instead, maybe you have a plan to pull out 20% of net profits each time until a certain amount. Or whatever it is. Develop a plan that you can follow that helps dictate this stuff ahead of time for you. You shouldn’t fly by the seat of your pants trying to figure it out as you go. Instead, plan on how you will grow ahead of time. Again, things change. But you need, at the very least, some sort of plan or compass to point you in the right direction in order to grow your business efficiently.
I can’t begin to tell you just how important efficiency is with this business. So many people think real estate is where you look at a few deals, pick one, invest and move on. Tax Sale investing is different than traditional real estate investing. It IS a numbers game. And there’s a fine balance between being accurate and efficient that you must learn how to conquer.
As I stated in the beginning of this episode, always be conscious of how efficient you’re operating and how you can improve. The five primary points of efficiency revolved around your understanding of the process, the research process (a huge one), the auction process, selling process and growing process. Instead of just going through the motions, always be aware of what you’re doing as you navigate through each of these steps and continually work to be as efficient as possible. It’s a requirement in this business.
That’s it for today. If you’re interested in leverage our years and years of experience in this business and want to learn how we operate as efficiently as possible, just head to taxsaleacademy.com and click on join and become a member of our academy where we’ll show you the step by step process you’ll need for your desired tax sale success.
Thanks so much for joining me on this episode.
And as always guys, these episodes are completely free of course. In exchange, we absolutely appreciate you taking the time to subscribe to our podcast, and ask that you leave a 5 star rating and some positive feedback.
Take care guys and make it a successful day.