Transcript:
Three Phases of Digital Tax Sale Investing
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 the past, I’ve done videos and podcasts on online tax sale investing. In today’s episode we’ll be taking it a little bit farther. The idea of Digital Tax Sale Investing is something that is gaining popularity, is desirable and is achievable.
The vets or old timers might not like this episode, agree with it or even think it’s a viable option. There are many successful tax sale investors who have been in the business for decades and are stuck in their ways. Now, that’s not a knock to them as theyre still successful. But the idea of digital tax sale investing or…get this . . . learning how to invest in tax defaulted real estate through a podcast or online training platform is just greek to them.
If you hate the internet and the idea behind online investing, then this is probably not the episode you want to listen to. But this is a topic that is so incredibly important to fully grasp.
I’ve discussed this before but there was a time when I was investing and I was literally driving from one auction to the next. Now, I enjoy attending auctions and have done very well at in person auctions. BUT, after 24 auctions in a single month – including a few multi auction days, I was physically exhausted. I think I slept at every Holiday Inn Express on the east coast that trip and ended up on a first name basis with one auctioneer and his staff.
I remember driving home . . . it was a VERY long drive. It was literally over 1,000 miles. During that time I got to do quite a bit of thinking about the tax sale business and how to make it easier on myself and ultimately on future students, although I didn’t’ know it at the time since the academy didn’t exist yet. At this point in my career, many things had transitioned online. You could actually do the majority of the research online. And a few very rare counties actually offered properties online.
But I was still limited over the next few years, during which time online research tools became more and more useful and refined and online auctions became much more prevalent. Eventually I realized that you can actually become a digital tax sale investor. Just like you trade stocks online, you can buy and sell real estate online.
Mind you, I do still attend in person auctions, do still enjoy them and there are certainly many advantages with them, but I haven’t had to spend 30 days on the road in quite some time. Online investing has allowed me the freedom that I desire – the same freedom that took me the entrepreneurship and real estate route originally.
I feel so strongly about this strategic investing plan that I’m actually creating an entire mini course for digital tax sale investing. If you’re an academy member, that’s kind of a spoiler for you, but just know you’ll see it added into your membership portal in the coming months.
So when we look at the simplest form of tax sale investing, we have three phases: prepurchase which we also refer to as due diligence or research periods; then we have the auction buying or auction phase and finally the post auction or selling phase. Let’s look at these three different phases to show you how we’re able to leverage the digital era…
The prepurchase phase consists of the due diligence and research required to make a smart decision on whether or not we purchase something and how much we pay for it. Research equals results – this is the first and most important aspect of tax sale investing. Screw this up and everything else is in vain.
Much of what we research initially is provided through public records. These records were once only available for inspection at the local county offices. You would have to walk in, search through books of records and hopefully find what you want – it was an extremely lengthy process and there is no way possible you could have researched more than a a dozen properties in an afternoon – a far cry from what we’re able to do now. Over the years, counties realized that digitizing these records helps them to keep better track and control of them. As investors, we have the ability to access these same records. Trips to the county office are becoming obsolete, thankfully.
Outside of the county records, we have an enormous amount of other resources available to us. Every single day, these resources are increasing in quality, quantity and usefulness. Tools like Google Street View or Aerial images that are easily viewable with just a couple of mouse clicks, were once only possible after hours of travel by car and, in the case of aerials, by airplane. We also have access to information like comparable sales data in an easy to read and analyze manner.
It’s funny, it doesn’t matter if it’s 1,500 miles away or right next door. My research will always start online. Last week I was researching the property right next to my personal home. And guess where I started? Online, of course. There is a simple process that we go through and steps we take as we research tax sale properties.
We’ll basically start with the list, then we’ll scan through it to look for a few key indicators that allow us to filter out some properties. Then we’ll have some properties that we begin step one of our online research – which is a surface level process that filters more properties out. Eventually we’ll get through most of the process, filtering out properties along the way so that we’re left with just a concentration of the properties we’d consider buying. The large majority of this research process is handled online.
But, what about the stuff we can’t handle online? As much as I enjoy the internet and leveraging it, there are simply some things it can’t do. The internet can’t tell me if a house has been demolished since the last google street view or aerial image, for example. It can’t tell me if that property has a dumptruck load of tires that somebody dumped there last week. There are plenty of other things that require an in person inspection. Depending on the cost, I’ll often hire locals to do drivebys, do specific tasks and other things to insure the quality of my research and to seek out the missing information. Obviously, there’s a risk to this process and that has to be taken into account of course and there are some things you can do to mitigate that risk. But at the end of the day, nearly all research can be done online with a small piece hired out, when necessary.
Let’s discuss auctions now – in years past there were basically two ways to bid on tax sale properties: you could attend the auction in person, register and bid. OR, some counties would allow absentee bids, these were really cool because you didn’t have to go in person – instead, usually you’d mail in your bid.
While some counties still require you to be present in person, a lot of counties are transitioning away from the courthouse steps type auctions and into the world of digital auctions.
Some areas will have hybrid auctions where you can bid online against bidders who are physically in the room. Then other auctions include online only auctions, where the format does not allow for an in person auction and all bidding is done online. Then we have some counties that allow online proxy bids, live bids, in person bids, mail in bids, absentee bids . . . . any any combination thereof.
On that same note, when it comes to investing in over the counter or OTC properties, this used to require a trip to the county courthouse. Now, in many areas you can simply select the property you want and checkout online. Whether it’s an auction setting or an OTC property, payment options might include payment by credit card, bank draft, or they might require an online purchase followed by a physical check of some sort.
Many people overlook the value of bids that can be placed online. Instead of leaving yourself physically exhausted like I was, you can simply enjoy your morning cup of coffee, click a few buttons, place some bids and go on about your day. Or in my case, you can navigate to another counties website and do it over and over. You can bid on as many properties as you can confidently research. You aren’t confined to one auction a day or two if you really hussle. You can attend a dozen or more if you play you card right.
And you can also do it from anywhere. You don’t have to be local. I’ve placed bids from 30,000 feet in the air, from a cruise ship, in the mountains and even while sitting in a fast food restaurant. The ultimate flexibility.
Now, the third phase. Selling. So everyone is like, I understand everything up to this point. You research and buy online.
But don’t you have to be local to sell the property? No, no, no. I can tell you, without a doubt, that a property local to me will require substantially more time to sell than one far from me. Here’s why: If it’s local, I feel obligated to do certain stuff – signs in yards, showings, weekly checkups to make sure everything is “ok,” that kind of stuff. If I’m 1,000 miles away, I can’t do all of this stuff. Instead, I’ll focus on more properties and will make more money. Pretty easy formula.
So, here’s how I sell it. Digital Marketing. Real estate searches are much more than driving around your favorite neighborhoods nowadays. If there is a sign in the yard, the majority of people WILL NOT call that sign. I know! I still put signs in the yards locally and I don’t get calls. Seriosuly, it’s very rare I get a call. Instead, they go digital. They look online. So that . . . that is where we must advertise.
And there are ways to do it properly and efficiently and ways to do it that don’t make much sense. That’s beyond the scope of this episode, but learning to leverage the power of the internet to sell real estate is the key to your business exploding. If you ask any real estate agent today what they’re doing to sell more real estate, the most successful ones will come back to some form of internet marketing.
Now you don’t need to be an internet marketing genius to sell real estate. In fact, you can easy master it and focus on just one or two online marketing avenues and you’ll reap tremendous benefits. And just like bidding, this can be done without any hassles, from wherever you are as you listen to this podcast or where you want to go and in many cases you can simply collect a bank or wire transfer and keep going about your business.
If you’ve ever wanted to get involved in this incredibly lucrative business, now is the best time on earth in my opinion. I’ve got students in the academy from all over the world including Hong Kong, Australia and Brazil to name a few who are killing it in this business because they learned how to leverage the internet to profit from tax defaulted real estate.
Tax sale investing has been around for thousands of years. For the last 17 plus years of my life it’s been an incredible business to me and much of that time was before we have the tools available digitally that we do now. This business will only continue to get more exciting while providing substantially much more freedoms to those who are successful.
As I mentioned earlier, if you’ve ever wanted to start right now is the best time. BUT, be sure you go into with the mindset of doing it properly and leveraging the technology at your disposal.
I truly hope that this has helped you on your path to tax sale success. If so, please consider taking just a second out of your day to leave a positive review on whatever podcasting platform you’re listening to us on.
And if you’d like more information on the training we offer, just head to taxsaleacademy.com where you can grab your free copy of Tax Sale Playbook if you’ll just cover the nominal shipping cost, or click that join button on our site to become a member of the academy for our most in depth step by step training. Take care, bye bye.