Transcript:
Welcome to the Tax Sale Podcast, where tax sale investing is made easy. My name is Casey Denman, I’m a tax sale veteran, the leading tax sale expert, author of The Tax Sale Playbook, founder of The Tax Sale Academy and I’m your host right here on The Tax Sale Podcast.
Thank you so much for joining me on today’s podcast episode. This is a completely free podcast and is brought to you through and because of The Tax Sale Academy. If you’re looking to learn more about investing in tax defaulted real estate, just head to TaxSaleAcademy.com. Again that’s TaxSaleAcademy.com.
On today’s episode I wanted to take a look back at my most successful tax sale investments. I’ve held an interest in well over a thousand properties, but a few of those stand out as some of my most successful deals.
When I take a look back at each one of those deals there are a few things that stand out to me that seem to be common in most of them. Now, it’s not to say that these traits will apply to every single investment you make, but these are common traits in the majority of my most successful ones.
1. The first one is that they weren’t local. Sure, I’ve done well in my local market but the most successful investments I’ve ever made were not local. I’m in a mid to larger size market and there can be plenty of competition here. So once I reached my glass ceiling here that capped my income, I began to move around different parts of the state and different parts of the country. That’s when my income began to explode. Don’t get so focused on your local market that you forget there are thousands of others. But obviously, if your local market is good to you, then by all means keep investing there!
2. Alright, next one: I was in the right place at the right time. And this is a big one that so many people don’t understand. They want their first auction to be a smashing success. Unfortunately, it doesn’t work like this. The reason I can get homerun deals is because of the sheer number of properties I’ve seen sold over the years. I’m talking billions of dollar’s worth of properties sold. The more properties you see sell, the better your chances are of being in the right place at the right time and snagging a property at a ridiculous price.
3. The next one is the my exit planned worked flawlessly. In every investment I make, I’ll have multiple exit plans. I’ll never just buy something because it’s cheap and hope for the best. Instead I have exit plans in place – sometimes they don’t work out exactly as I want, but over time I’ve learned how to strategize properly and in my best deals these plans have worked out. Often times that even means that I’ve had buyers lined up waiting to buy.
4. The next one: My best deals were either vacant land deals or ugly homes – like severely ugly, border line dilapidated. Real estate investing is more than buying and selling pretty homes. That vacant stuff and that boring stuff can make you big bucks. Don’t ignore it just because it seems boring or it’s something you couldn’t see yourself living in. It’s an investment after all.
5. Alright, next one – I didn’t perform a rehab. I’ve done many rehabs over the years, but the most successful deals weren’t rehabbed. I’d get in at a cheap price, then get out while selling it to someone else and letting them deal with the rehab. Could I have made more money if I rehabbed it? Possibly off that one deal. But not likely over the long term. Rehabs take time and money, both of which are limited for everybody. Decide how to spend yours – mine is best spent buying properties at great prices, not managing subs.
6. Next: They were in smaller markets. New investors tend to flock to mid or large markets and are disappointed when there is competition there. Most of my best deals were in small or small to mid size markets. In fact, I’d venture to say that 90% of people have never heard the names of the cities I’ve invested in. If it’s a city that everyone around the world knows, then there is probably too much competition there. Find that smaller market where you can buy cheap, but still find an end user or buyer.
7. Most, not all, but most of my best deals were properties that were a little bit different. One was a house that I bought that was attached to an attorney’s office. The attorney has been having trouble with the city about parking issues. He contacted me and paid quite literally 3 times the value of the house, just to bulldoze it and put in a parking lot. Another was an entire subdivision I flipped. Another was a acreage parcel everyone overlooked. These aren’t crazy stuff like islands or old hospitals, but they are a little bit different. Obviously, don’t go after the unique stuff unless you have a good plan of attack to sell them.
8. On all of my best deals I was shocked. Shocked that no one bid against me or if they did, the didn’t really get too competitive about that property. Obviously, when that happens you tend to start questioning your research and wonder what the heck you just bought since no one else wanted it. But in the end, when your research is accurate, that’s all that matters. But, yet, every single time I was just utterly shocked that no one bid against me.
9. And the last one today, every single one of my best investments sold much faster than the typical property on the open market. I’m a firm believer that selling properties quickly is a great way to continue your momentum and to keep your capital snowballing as you move on to more and more deals. Now, I’ve been in deals that were multi year, even up to a decade, before they began to come together. And that’s ok in certain situations. But the best deals I’ve been involved in have all come together somewhat fast. This means lower carrying costs, less liability and your money isn’t tied up for as long.
So, there are a few of the common traits of my most successful investments. Hopefully this has, at the least, provided you with just a few ideas on what to look for or a look behind the curtain of some of my successes.
If you’re looking to get into the tax sale business or if you’re already in the business and looking to expand, there are a bunch of links in today’s show notes that can really help you out.
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Take care and make it a successful day. We’ll see you next time, right here on the tax sale podcast.