Why I Like Rural Tax Sale Investing

http://TaxSalePodcast.com

Transcript:

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.

Today we’re going to talk about rural or small town tax sale investing. And this is one of my favorite and most successful strategies, which is why I want to share it with you today.

And I think it almost goes against the grain. SO many people start their tax sale investing careers in bigger cities. It’s almost like clockwork about once a week I’ll get an email about someone struggling to find good deals. Then they tell me their investing in one of the 15 or 20 largest cities in the country.

Like, when I read those emails, here is what I hear . . . “I’m going to an auction, that is in the center of one of the largest cities in the country, hoping that no one from that heavily populated city shows up to bid against me and I’m upset when there is a lot of competition.” What could you not understand about this?

Here’s a good rule of thumb. If you travel to the other side of the country and ask 10 people if they can tell you where a city is located, and they all answer yes, then it might be too big to invest in. Now, that isn’t always the case. I’ve got students that are killing it in Orlando, Tulsa, Dallas and other big name cities, but if 10 strangers from the other side of the country can tell you where it’s located, then you might want to consider that they’ll be some sort of competition. And certainly, don’t be disappointed if there is.

Some of these big cities have so many people attending that they will have huge video boards showing the stage, with thousands of people attending.

On the extreme flip side of that, I can remember attending an auction one time that was in the OFFICE of the tax collector in a relatively small city. Like, the actual office. Not the conference room or the tax collector’s building, but it was actually in the tax collector’s office. Now it was a good size office, but it was his actual office. I awkwardly waited for the auction to begin to realize it was me, the tax collector, the person handling the auction and one other bidder. I got the few properties I wanted and that was about it.

The point is that small towns can often provide a leg up when it comes to getting around competition. The primary reason for this is that they just aren’t well known and not that many people attend the auctions there.

Another reason is based around the resources of that county. Most small counties, obviously have smaller budgets than the large counties. This means that the small counties don’t have the ability to market their tax sales as well the large counties. Many large counties will provide loads of information, including property condition reports, pictures and all sorts of other extremely useful information. They have the budgets and manpower to be able to provide all of this.

Small counties don’t have the same luxury of large budgets and manpower to put together extensive marketing campaigns. So in addition to the reduced attention the smaller counties get based on their size, the fact that they don’t provide quite so much information also hurts their ability to draw large crowds.

So, essentially smaller cities attract smaller audiences which ultimately results in smaller prices and, bigger profits.

Now, the next question I get is “Won’t you have trouble selling properties in such small counties?” Well, first off, we’re not talking about a county like Loving Texas, with a population of less than 100 people.

While doing research for this episode, I realized I routinely invest in counties with populations in the 5 to 8,000 range and then larger counties as well of course too. Now, I don’t go by any official population numbers and I don’t have any set standards I go by, but it goes back to my question earlier in this episode. If you can go to the other side of the county and ask ten people the name, and not a single one has heard of it, then you might have a good starting point.

You should seek out counties that have some sort of industry. Even if that industry is just farming, which is commonplace for many small communities, but just make sure that there is some sort of industry there. You’ll also want some amenities – I especially prefer areas that have, at the very least, a county seat with an active downtown area and/or grocery stores and restaurants and preferably at least one big box store.

You never want to buy in an area where there are so few people that no one will ever buy the real estate that you’re selling. What you’re looking for is to take full advantage of the lack of competition, while still giving you the ability to actually sell that property at some point in the future.

So, the next time you’re on a search for a new area to invest in, consider taking a hard look at the smaller, more rural, less known counties. You’ll likely find less competition and lower prices.

And when you’re ready to get started the first step is to get your copy of The Tax Sale Playbook – The Tax Sale Playbook is the Ultimate Guide to Buying & Selling Tax Defaulted Real Estate – the book is free, we just ask for your help with shipping. You can get it at TaxSaleAcademy.com. And then of course if you want step by step comprehensive training, consider becoming a member of the academy at TaxSaleAcademy.com and clicking on join.

That’s it for today’s podcast guys. Before I end, I’d like to ask for a quick favor from you. We provide lots of completely free training for you guys. All we ask is that you’ll subscribe to us

Take care guys and make it a successful day.

See ya!