Transcript:

Time, Money & Tax Sales

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 want to discuss to discuss two things that should help determine your approach. Time and money.

Over the last week I’ve had two coaching calls from opposite ends of the spectrum that helped to illustrate this for me. Last week I spoke to a gentleman who was looking to start with $1,000. Yesterday, I spoke with a gentleman that had $4,000,000 to invest. Both had limited tax sale experience and I recommended completely different avenues to invest for both of them.

I’ve also had similar situations where someone has 40 or 50 hours a week to go at it full time and others only have maybe an hour a week. Again, completely different approaches.

And the fact is that these two, time and money, are so tightly intertwined in this business that most people don’t even realize it. Regardless of the amount of time or money you have available, there is opportunity for you with tax sale investing. How you use your money will dictate the how you spend your time and how you should be investing. This will make sense shortly as we discuss a little deeper.

When you’re starting with a minimal amount of capital, your strategy should revolve around multiplying that capital as quickly as possible. In some areas, it is not even possible to invest in tax liens or deeds for $100. Which means you’ll need to find other areas. And even when you do find areas where it is possible, you need to determine which specific properties are the best deals.

You should be looking for those were you can multiply your investments two or three times or even more. You want those incredible deals that provide insane returns. But, here’s the deal – they are difficult to find. You’ll likely have to scour through dozens or hundreds of properties in order to find the one. Perhaps you even need to attend numerous auctions before you’re able to buy the right property. Maybe you even have to place dozens of bids before one finally sticks.

I’ve told the story in tax sale playbook about the very first auction that I won a property at. I go into detail in the book, but the short story is that I can vividly remember sitting there placing bid after bid and not winning a single property. I was the guy everyone knew would get outbid. Time and time again. Then towards the end of the auction, one of the regulars said “just let the kid have it” and my life changed forever when I finally won my first property.

The fact is that the lack of money will require you to use your time working towards finding that one specific deal that really provides you with that boost you’re looking for. It will require substantial effort and it will require you to have the mental stamina to want to keep going. Understanding and accepting that ahead of time is the only way you’ll succeed in this business when you start with minimal capital.

Now, on the opposite end let’s say you have a few million bucks to invest in. This investor should take a completely different approach. If your funds are limited you’re going to spend lots of time looking for that one good deal, because odds are, you’re business will be reliant on that one good deal to really hit it big.

But as a well funded investor, if you spend all your time chasing one deal, you’re going to get burnt out and your returns compared to the investable capital you have available will be minimal. You’ll also usually want to invest in larger chunks, that is more expensive properties – it takes quite a bit more effort to track 10,000, $100 investments, than it does to track 100, $10,000 investments.

So instead of chasing one cheap property, the well funded investor must develop a system to follow that will allow all of their investments to perform well on average, over time. You should approach it not on a property to property basis, but instead on a portfolio wide basis. You should know that there are a few deals that you won’t make what you’re expecting, but over the lifetime of your portfolio or on a year to year basis your yield WILL be what you’re expecting, if you do it correctly of course.

Now, this isn’t to say it you don’t have to invest time. Of course you do. But while you will, of course, have to invest time into find the right properties, you’ll also have to invest a large portion of your time into the systems required to operate your business. It requires a solid system in order to successfully invest and monitor where and how millions of dollars is being invested, especially when you’re using a tax lien or deed format where you might only be investing a few thousand dollars into each property.

So, as you can see there depending on the amount of capital you have to invest, you can determine how you’ll spend your time and how you should invest.

Now, even you new investors who might only have $100, $500 or $1000, I want you to remember that one day you too will need these same system that are required to invest. So from day number one, be sure to keep this in the back of your mind. Develop systems

On that same token, we must take into account your specific personality and skillsets. A CPA used to looking at numbers all day with a million dollars might be perfectly happy tracking tax lien ROIs, graphing stuff and sitting at a computer in their business. But a home builder used to being in the field all day with a million dollars to invest would probably prefer buying abandoned tax deed homes to fix up and resell.

So be sure to take this all into account as you begin or continue your tax sale investment journey. This is an incredible business and the fact is that there are hundreds of different approaches you can take – most will be determined by your available capital, which determines the desired use of your time and you’re investment strategies and don’t forget to add in a little personal preference so you don’t get burnt out.

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. It really gives us the motivation and desire to continue to expand our business on both the free and premium sides and we hope we’re able to have a small impact on your tax sale business.

Thanks so much for joining me on this episode.