Transcript:
Hey there, it’s Casey Denman with TaxSaleAcademy.com. Thanks for joining me for our weekly question segment.

Charles question was submitted on a YouTube video and it was: I’m really interested in tax sales, but one of my friends told me to just stay away? Why the bad rap?

First off Charles, thanks so much for your question. So you didn’t provide the specifics why your friend thinks this so I’m going to answer this question with a couple of different angles.

The primary concern why some people might not like tax sales is due to their lack of understanding in the business. They simply don’t understand the purpose for tax sales or the strategies behind tax sales.

The first one I get comments about time to time. And that involves people not understanding the tax sale business or the purpose behind it. Simply put, the government and amaneities that we use every single day rely on tax revenue to continue operations. A large chunk of these tax revenues will come from property taxes. Now, if someone thinks that there is wasteful spending, so be it and they should do their part for change. But that tax revenue funds things like schools, parks, roads, sidewalks, police, fire, that kind of stuff. I think many people tend to forget that these taxes pay for stuff like that. No taxes, no roads, no schools, none of the stuff that you and I use every single day.

Now, when those taxes go unpaid the county must take action. If they don’t, the city will end up bankrupt and every one of those amenities I mentioned will crumble. So the properties will go through the delinquent tax process. This is a multi year process before anyone is ever close to losing their property. And they have likely received a dozen notices about it. So it doesn’t happen overnight.

Now, hopefully as you can see this is a very necessary business.

If your friend was talking about the tax sale business in a way that he perhaps understood the purpose but didn’t agree with it as an investment strategy, let’s discuss that for a moment.

So, tax defaulted real estate is typically sold for the amount of back due taxes, interest and fees. At least that’s where the bidding will start. There is simply not a way to acquire real estate, at least that I know of, for that cheap. Better yet, some areas will even sell for less than the back due taxes, interest and fees if the properties go unsold – these bid can start at extremely nominal amount. They can literally start at $20, $50, $100.

Now, obvious, there is competition to potentially be concerned with, right? Of course! There is competition is just about everything we do when we really think about it. BUT, that doesn’t mean that there are ways to work around this competition, to beat this competition or to completely avoid this competition. There are plenty of strategies that you or I can develop that will help us get to the point where we don’t even have to worry about this competition.

Another common misconception is that the selection of properties lacks. There are numerous responses to this, but if the selection lacks in YOUR specific area then choose another area. It’s incredibly easy now to invest in areas that aren’t local to us. Just because one area is lacking in selection doesn’t mean that another area is. They say that there are around 3,000 properties sold on a daily basis through the tax foreclosure system. Sure, some of these are junk. Many are homes that you or I might not live in, but so what? I’ve even seen multimillion dollar properties sold at tax sales many, many times. So there are plenty of properties to go around!

So Charles, hopefully this helps out with your question. Tax Sale investing is an absolutely incredible business. My suggestion is to take some time browsing around my channel, review some auction lists, and just become familiar with this business.

If you’d like to learn more from us, you can head to TaxSaleAcademy.com – once you’re there you can grab a copy of my free book, if you just cover the nominal shipping charge or you can join the academy for our most advanced and comprehensive step by step training.

Thanks again for watching.

Take care, see ya!