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.

Today I’m going to give you the truth about money and tax sale investing. You’ve probably noticed by now that the term tax sale investing implies you’re actually investing. This means you’re putting forth money to make more money. Pretty simple, so far right?

This varies from working or doing a task for a paycheck. Money, capital is required to start. Of course, there are a number of places to get this capital. It’s extremely easy to get if you show a little effort. We go over many of them in the tax sale academy, but whether it’s borrowed money, credit, whatever . . . money, from somewhere is definitely required.

Therein brings about a new question. Well, how much money will I need? The specific answer to this question is that it varies. It depends what you’re investing in, how your investing and where you’re investing. An OTC lien on an unbuildable lot can be picked up for $5 in some areas. I’ve also see properties sell for close to a million dollars in certain areas. So, there are obviously many variables here. It’s not possible for me to say that every single person interested in tax sales must have $537.42 to get started. And I actually get asked this question a lot. The fact is that it takes much, much less money than you might assume.

I’ve posted videos before about properties I purchased as cheap as a penny. One of my most popular podcast episodes is title best day of my tax sale life, it’s episode number 10 if you haven’t listened yet. In summary, on that episode I discuss how I was able to grab multiple properties at the opening bid of $20.

But obviously, I tell those stories for a reason. Those are the stories that I found myself in after going to hundreds and hundreds of auctions watching billions of dollars worth of real estate get sold. Now, I was making money that entire time and buying properties well within my budget, but those particular deals were not all that common. Whether you’re coming across insanely cheap properties or not, there is always money to be made in this business.

The fact is that you can easily determine how much you need by doing a little research. This is a very simple process . . . First, figure out what type of system you want to invest in, liens or deeds – there’s a link to our state guide down below in the show notes. Then figure out which state and area you want to invest in. Then get to the area whether it’s in person on online and find the department that handles their tax sales. Get a copy of the previous auction results – these are required to be public record in just about every state – you just have to find the right department and person. Take a look at that list . . . and boom, you’ve got your numbers. If that specific area is out of your budget, find another area. Then another and another, until you find one that is in your budget. Sure, it takes work and effort. But everything does of course.

Now, these past auction results are an indication of what properties will potentially sell for. They aren’t guaranteed. I’ve been to some auctions where properties will be selling for twice what they did the year before. Other auctions they’ll be selling for half what they previously sold for. The only certain way to see what’s in your budget is by going to the auction. But the next best thing, a strong indicator is by reviewing the previous auction list.

On that same token, I need to discuss something that you must understand. As with many things in life, the more money you have, the more options you have.

If you’re working to scrounge up a few pennies to go to the tax sale auction, you’ll likely be limited to just the cheapest properties. The ones that no one else bids on and the ones that are low value. Believe me when I tell you that there is nothing at all wrong with this approach. This is the way I started, the way many of my students started and the way many many successful investors start. But your budget is going to limit you. You will see countless properties where you would tell yourself, if only I had more capital to spend. This could be the investor that has $100 or the one that has $100,000. At some point or another you’ll wish you had more capital.

But when you start with a low budget, your options are limited. You also must work harder, research more properties, go to more auctions and be extremely patient. You don’t have the ability to wait for the best property out of all of the properties offered – you only have the ability to wait for the best property out of the small percentage of the ones offered within your budget.

Now, the more money you have, the more options you have. So you have a much larger pool of properties to choose from. You have the ability to not just wait for that small percentage of properties that the low dollar investor has, but you can now wait for anything you can afford. But this doesn’t come without it’s own set of complications. Obviously your risk on a dollar value might be much higher. You’ll be buying properties that might have higher carrying costs.

And when you get to a much larger scale, you’ll have operational challenges that you must learn to push through. The investor that starts with $100 and the investor that starts with $5,000,000 should have much different objectives. The $100 investor might be satisfied buying a lot for $100 and selling it for $500. The 5m investor would be buried in paperwork to acquire those same lots – he’d have to get 50,000 of them. While the low budget investor must work harder to get the right property, the larger budget investor must work harder to insure the operation in its entirety is functional and profitable. So operationally, there are differences. I’ve dealt with these challenges on both sides from members of the academy who start with $100 and others who have multi million dollar funds. There are solutions to all of the challenges with the right approach.

But I don’t want you to think for a minute that you can’t start because you don’t have a hundred thousand dollars. What I want you to fully understand from today’s video is that you absolutely can get started no matter the capital you have. In some situations you might have to be creative to get more capital, but in many situations it’s just a matter of finding different areas, changing your objectives or approaches and most importantly being patient.

So don’t let the amount of capital you have stop you. Get started now, when you make money reinvest continually until your lack of capital is no longer an issue!

Thanks so much for joining me on today’s episode. Inside The Tax Sale Academy we go creative funding methods, we discsus how to make your money go as far as possible, we teach you so you don’t waste money or time. Our entire academy is designed around help you profit from this incredible business. If you’re interested in signing up, you can get started by going to TaxSaleAcademy.com and clicking on Join. Again, that’s TaxSaleAcademy.com and click on join.

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Have a wonderful day. Take care, bye bye.