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 last week’s episode we talked about designing your business to fit your goals, lifestyle and the general idea of what you see yourself doing. We discussed how some of my students want to go into an office from 8-5 daily, others want to invest while at the beach and others are investing from the other side of the world. It’s a fantastic episode I’ve been receiving a lot of positive feedback with.
A major part of being able to properly design your business the way you desire are the systems that you implement. Whether you care about consciously designing your business or not, although I think you should, it’s incredibly important that you have the proper systems in place.
Perhaps it’s being naïve or maybe it’s just not knowing where to begin, but many new investors tend to just float from one thing to another. They’ll research a list by going from one shiny property to the next, do a little due diligence, maybe go to an auction or two where they’ll decide what their bid is on the fly, then they’ll acquire a property only to have it sit while they figure out what to do with it or they might even just get too busy to sell it.
All of this is not only inefficient and costly, but it will drive you out of this business prematurely. And the truth is that this is easily to do when you’re first getting starting. You have a little interest in something, so you show it a little attention, then a little more, but while you’re doing this you’re not doing it properly so you’ll have lackluster results. It’s like practicing a sport, learning a new hobby like guitar or learning a new trade or skill – you can do it once or twice and it’s great. But unless you learn the basics and get everything lined up the way it’s supposed to be, you’ll either not be very good or you’ll be ready to quit in no time.
One of the most important things you can do as a tax sale investor is to systemize your approach to everything. Now, I don’t want you to overlook the importance of this. My entire bsiness and every single one of my successes were the result of the systems I have in place. These systems allow me to be more accurate with my investments, make more money, and when created properly, they allow me to live the lifestyle I desire simply because these sytems are in place.
Now, as you’ll soon see I’m not talking about anything crazy advanced. Instead, I’m more or less talking about a specific and simple step by step process for each phase of the business.
I’ve made this analogy before, but when we look at the aviation world there are checklists and workflows for everything. Preflight, taxi, takeoff, cruise, landing . . . everything has a specific process and checklist that are often very detailed. This is done so that the pilot doesn’t skip any important steps. Your tax sale business should be a system that consists of the process of going through checklists methodically, just like pilots do. If a pilot skips over the “turn fuel flow on” step, it won’t be good. And if you skip over the step where you need to “verify value”, well that won’t be good either.
Now, these checklists and this flow is something that you can create and tweak on your own. We do offer some in the academy. But you might still want to add additional steps onto those depending on your area, and your specific investment objectives.
In today’s episode I want to go over a few different systems and process you should have in place. As I mentioned earlier, these won’t just allow you to make more money and be more accurate but they’ll add crazy amounts of efficiency to your business which increases flexibilty.
Let’s work in order here:
Learning:
This is obviously something that I’m pretty partial too. You can actually skip this part of the process if you’d like and weave it into the first few years of your business, trying to figure everything out on the go. Of course, that’s costly and takes quite a bit of time. On that same token, I don’t recommend bouncing from one place to the next trying to fill in all the pieces of your knowledge gap. In an effort to not sound like a sales pitch, I’ll be brief with this one – but my suggestion is to get training that is designed to go step by step. Don’t learn a little over here, some over there, and more over here. That’s like going to med school and only taking half the classes. The issue is that you probably don’t know, what you don’t yet know. There will be too many knowledge gaps. Get step by step training.
Ok.
Next One: After you’ve gone through the learning process and know what you’re looking for and the areas you’ll be investing it times to take a look at Auction lists. One of the first thing people tend to do is head straight for auction lists. Then they start scrolling down that list. Most are unsure what they’re looking for and even more are unsure about what they’re even reading. Regardless, the list excites them. It’s the part of the business that shows the available inventory, it represents the opportunity to make money. It’s exciting and intriguing. My favorites are the ones that have pictures and the new investors head straight for the photos. My advice, sure, scan the list quickly. But then go to your process for reviewing tax sale lists. And do it methodically, start before you even look at the properties on the list – can I attend, what’s the date, special terms, deposit, funds, where is it, any other requirements, that kind of stuff. Then scroll through the properties – can I afford to invest here, how many properties are being offered, is that quantity worthwhile, what’s the variety of areas and subdivisions like, any commonalities that stick out? Then review the properties. We’ll talk about research next, but go step by step as you review the process.
So let’s talk about research now as this ties in close with auction lists. Here’s what I suggest, as you begin to research your tax sale lists, you need to developed a spreadsheet of some sort. On this spreadsheet, you can work left to right or top to bottom. The first factor will be the most important to you, and then as you go down the list you’re filtering out properties. So, let’s say the first one is labeled, “in budget question mark?” If you answer no, it’s time to move on to the next property. If you answered yes, then we go down to the next question. Maybe that’s something labeled “landlocked” – if yes, you move on to next property, if no, you keep going with your research. The idea here is that you work as efficiently as possible. You don’t want to spend hours diving into a property and knowing every single detail about it only to find out it wasn’t in your budget in the first place.
Now, it’s impossible for me to sit here and lay out every single thing you should research – that’s one of the primary reasons I have TSA of course. But what you should do is take everything required for proper due diligence, put them in order on your spreadsheet and simply work your way down. You’ll eventually get to the point where you’ll have a small percentage of properties that you will move forward with, whether that means site visits, bids, or whatever else. Your goal is to have a concentrated list complete with thorough due diligence for the properties you should invest in. This takes us to the next part of your system.
Auction Preparation:
I can always tell who the beginners are at an auction. They’re the ones who show up unprepared. They’re often late, sometimes don’t have IDs or deposits, they have binders of information, or perhaps nothing at all. They aren’t organized, usually bid emotionally, and often leave perplexed or with a bad situation on their hands. Auction preparation begins long before the morning of the auction as you walk out the door. To this day, I have a step by step list that I go through. There are many things on this list but here are a few things to consider: By the time you’re at the auction, you simply need to know what you’re going to bid on and your max bid amount. I organize this in a spreadsheet that I take with me. It includes the property number or the particular number assigned to that listing, the parcel number, a part of the legal description just in case they read that aloud, a few words as notes about the property in case I’m curious, and most importantly, my max bid amount. That’s it. I prepare this well ahead of time, put it in a three rings binder that allow me to have something to write on, while also giving me privacy in the event I start talking to someone and need to close it. Also on my checklist includes deposit information which might mean a trip to the bank a day or two ahead of time. The night before the auction, I set everything by the door with my keys on top. Auction bid sheet in binder, license, deposit and or funds, pens, and anything else needed. I grab it and go. The worse place to be unprepared is at the auction when they’re selling the very property you came to buy.
How about a system for the auction itself?
I can’t tell you how many times I’ve seen people bid on the wrong property. Hundreds and hundreds. I’ve seen numerous times where people left the room to have the one property they came for get sold while they were at the vending machine. I have a system I follow pretty closely – depending on the venue, county and number of properties I’ll arrive early. Get a strategic seat, mark off every single property and track bid amounts and bidders for future research if necessary, have the properties I win totaled, both quantity and cost, I constantly make notes and am aware in what’s going on in the room. The auction is not a time to sit back and relax. It’s a time for focus.
The next one is your post purchase system. What’s the first thing you do? Maybe it’s get insurance, secure the property, log it into your tracking system, whatever is it, now is the time to do it. There has been times in my career where I have actually received tax foreclosure notices because I didn’t properly account for the properties I owned and they got lost in the shuffle. It’s easy to lose track. Focus on doing this within a set time period. Maybe 2 or 3 days. Do everything on your post purchase list as soon as possible.
The last one is your selling system. If you do it correctly and build a buyer’s list and marketing process like you should, this will be the easy one. Put yourself into a selling timeline. Cleanup, pricing, photos, description, sign, email, phone calls, price adjustment, remarket….whatever your process and order is, put it into a scheduling app. There are lots of these apps for free that will keep you on track and focused. Develop your selling plan and execute it.
So there it is – just a few ways you can and should build systems into your tax sale business. Floating from one property to the next, from one auction to the next, one marketing plan to the next, whatever it is . . . doesn’t work. You must be systematic and have a built out process to succeed in this business. And the bonus is that with this process you’re guaranteed to make fewer or no bad investments, that you’ll make more money and you’ll have much more flexibility to live the life you desire.
That’s it for today’s episode.
I really hope you’ve found this episode helpful and that you are enjoying my podcast. If you are, please consider taking just a few minutes out of your day to leave some positive feedback on whatever platform you’re listening to us on – we truly hope we’re able to play a small role in your tax sale succss.
Thanks so much for joining me on this episode.