Your First Steps

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 podcast episode I want to discuss the first steps. I’ll commonly get questions about where someone should begin. Many of those asking these types of questions are brand new tax sale investors who are interested in this business, but have no idea where to start. So in today’s episode I’ll be going over the five step process to getting started in this business.

Now, each one of these steps can be complex. But in this episode, I wanted to just provide more of an overview of the actual process than a detailed explanation of each one. If you so choose, I’ve got training videos with many more details on each one of these topics. These videos are over on my YouTube channel where you can use the search bar for related topics. Likewise, I’ve got podcast epsiodes on many of these same topics and of course, we go into much greater detail inside the tax sale academy.

The first part of this process is familiarization. This is your general learning phase. This is also something that many people tend to skip over for whatever reason. When you’re planning to travel somewhere new, you probably research it. When you’re planning to buy a vehicle, a boat, a new house, whatever . . . you probably take some time to become familiar with whatever you’re buying. Tax sale investing should be treated the same way. The worst approach to this business is to hear about it is, go seek out a list, buy a property and then, after the fact, decide what you did wrong when you end up losing money. I hear this every single day. This is the approach that many new investors take.

Take the time to learn the different processes, learn the details. What’s a tax deed, a tax lien, redeemable deed, what’s a hybrid state, why are these properties here, what are some of the traps and pitfalls in this business. How can you get the best properties? What approaches will work best for you?

Once you learn about this business on a surface level, then dig a little deeper. Look at things like title clouds and learn how to deal with them. Go deeper and deeper on your learning until you’re confident with what you’re doing. And once you have an idea of what you’re doing, you can start to dial in your approach a little more.

Maybe you make the decision that you want to invest in tax deed states only. My suggestion is to go to our state guide, which is linked in today’s show notes, learn about the different tax deed states and see which one might work best for you. And by the way, you don’t need to select just one. You can come back and tweak this or add others as you go.

All of this, of course can also be learned through the numerous trainings that I offer through YouTube, this podcast and in the academy.

After that, it’s time to learn the laws and processes used in the areas where you might want to invest in. And again, this should be fluid. Just as a side note here, if a state’s laws, process, timeline, whatever it is doesn’t work for you then change states. The internet has made it more than possible to invest in any area that we choose, so don’t let the specific location matter too much.

Alright, let’s touch on the laws first. Every single state in the country is different when it comes to their tax foreclosure system. Each state has a set of laws that will apply to tax delinquent properties and ultimately to us as tax sale investors. These laws are often hidden in state statutes and are pages are small font, spelling out the entire process in a rather boring fashion. The biggest piece of advice that I can give you when it comes to learning about a particular state is to read that state’s laws. Do some searching around online and find the state statute that are relevant to tax sale investors in whatever state you’re looking at. These are literally the words that allow our businesses to exist. Without these laws, we do not exist. Tax sales do not exist. These are the instructions to operate our business. Can you start without reading these laws, of course. But sooner or later, your lack of attention to these laws is what will cost you substantially.

Now when it comes to process, I’m talking about how each of the individual counties will operate. Sure, the state laws are the basis for this business. But on the practical side, we need to know the local area’s specific process. How do they handle things? What exactly do they do? The state statue might say that the county must sell tax liens after the taxes are late. But how? Are they sold online, in person, mail in bid, proxy bids? Do they require a deposit? How do you register? When are sales? How do THEY operate specifically? There can be substantial differences between counties, even if they’re in the same state. Navigate to the county office the handles the sales, which you should’ve learned about when you read the state laws. From there, go to the page on their website that deals with tax sales. Read every single page thoroughly, multiple times if needed, until you have a solid grasp on how they specifically handle their sales.

So, after you’ve become familiar with the business, with the state’s laws and with the local area process, then it’s time to start looking for a list. This is something that many new investors tend to exaggerate the difficult of. Obtaining a tax sale list is likely one of the easiest things in this business. Go back to the tax sale related site we just discussed and the list should be posted there. If not, call or email that department and they can help you get one. It’s public record and completely from 99% of the time. There are still a very small number of rural counties that might charge fax or mailing fees to send you a list, but most counties post their lists online now.

Once you have that list, it’s time to scan it over a few times to make sure you can afford to invest in that area, then it’s time to research it. I have probably more than two hundred research related videos on my YouTube channel and dozens of hours of training in the academy on this specific topic. To think that I can tell you everything you need to know about research in a few sentences is naïve at best. But, I’ll provide two key pieces of help for you when it comes to research. The first is that your results will be directly related to the quality of your research. Do not rely on anything from anywhere, including the county office or the auction company, without doing research yourself. And that implies, of course, in order to this properly you must know how to research. Take the time to learn this extremely important step.

The second piece of advice is this…and it’s something that an auctioneer who has been in the business even longer than I has always said. Very simply: KNOW WHAT YOU’RE BIDDING ON! The more you know about what you’re bidding on, the more successful you’ll be as an investor. There will definitely be somethings you might now know about – we don’t know if the property has a refrigerator that works or if the toilet leaks, right? But we must know absolutely everything we can possibly know. The more you know, the more informed you’ll be when it comes to making that investment. Know what you’re bidding on!

The next part of the process is to attend an auction. I always recommend that you go to your first auction as a practice auction. Go ahead and research the properties, determine your bid amounts, plan out a strategy in your head and then just sit on all of that information. Go to the auction and see what could have happened. Watch and learn about the process. If it’s an in person auction, talk to other bidders. Ask questions, listen to other’s questions. Get comfortable with the process. Track the winning bids – determine if your bids would have been winners. Determine if you might have overlooked some properties that seemed to be extremely popular. If you want to take it a step farther, research some of the winning bidders. You can learn about about this business by simply watching others and then taking bits and pieces of their approaches and forming your own. If there is a big shot that seems to be buying everything, don’t get upset with them, instead take the time to see what you can learn from them.

Going to an auction with the sole intention to learn can be such a rewarding experience. You will actually learn, most importantly, but it’ll also allow you to do it in a very relaxed manner. So many people put pressure on themselves to buy a property at their very first auction, when they probably shouldn’t be. They force themselves into an investment that might just be a lousy one. Don’t do this to yourself!

The last part of this process, provided you did everything up to this point thoroughly, is to pull the trigger and buy a property. Make your first investment. Whether it’s a lien or a deed, I always suggest to start with the small and simple transactions. Don’t drop your life savings into something right off the bat. And don’t go and try to get super creative as a way to beat the system or something. If you’re buying a lien, consider buying just ONE lien that pays a good rate at a good price. If you’re buying a house, consider buying a simple vacant building lot or your traditional single family home. Start simple. Those first few transactions you’ll probably learn quite a bit more about the business that you weren’t previously familiar with, so start small and allow the process itself to educate you.

So those are the steps to take when you’re first getting started in this business. Familarize yourself with the process, go deeper on your learning, dial it in to the different states and areas you want to invest in and learn about those, locate, review and research a tax sale list, go to an auction solely for practice and then finally . . . when you’ve done all of that and you have confidence and you’re comfortable, go ahead and pull the trigger on a simply deal to start off with.

I truly hope that you’ve enjoyed this episode and how I’ve laid out the steps to take when you’re first starting. As a reminder we offer more tax sale training than anyone else in the world. Much of it, like this podcast, is completely free, all that we ask if that if you do enjoy this podcast to please just take a few seconds out of your day to leave us a positive review.

And if we can help you in a much more detailed manner with these steps and all things tax sale investing, just head on over to TaxSaleAcademy.com, click on join and become a member of the academy.

Take care folks and we’ll see you next time, right here on The Tax Sale Podcast!