How do we get information about selling the properties we purchase?

[Sylvia Castellanos]

Permit me to introduce myself, as this virtually my first time posting on this forum. I am in the beginning stages of learning about investing in tax liens and tax deeds. I have been binge watching YouTube videos, in particular those put out by three particular companies. I take this very seriously and I really want to make this activity an integral part of my life.

I have identified one huge gap in the subjects they cover. They cover the auctions and otc sales in a commendably detailed form, but when the sequence reaches the point of making a purchase, the instructions stop. Nobody tells you how to achieve the second phase of the project, the sale of the property—which is the whole point of the exercise. That is a huge gap.

Among these instructors, there is only one who has made passing reference to selling your properties. He emphasizes the need to use social media rather than traditional methods. He points out that if you are buying lots that don’t cost very much and you plan to sell them fast for not a huge markup, realtors won’t put a lot of time into it. He recommends advertising your property yourself, using Craigslist and Facebook Marketplace. That is fine as a start, but only as a start.

I emailed one of these companies to point out that none of their Youtube material cover the sale of our properties. They politely wrote back saying this was covered in their mentorship program. That was a nice way of saying—you get that in our $5,000 package. I thought this was a lot of money until another of the companies told me they charged $10,000 for their instructional/mentorship program.

I guess it’s a deliberate decision to give us for free almost…almost…all the information we need…but not the last piece of the puzzle. Tied to this is the fact that it is very hard for us to make informed decisions about making purchases in markets we are unfamiliar with, given the normal ebb and flow of real estate activity.

That said, I am not raising this primarily to criticize these companies, but rather to focus on the practical effect of what they leave out. There is no way I am going to pursue making a purchase if I have no idea how hard it will be to sell it, what I might earn, and what process to follow. I am new to this, as I said. My primary educational resource has been YouTube videos, which I have watched for many dozens of hours. I need to shift now to having practice sessions in doing research and in watching auctions online. Can anyone here suggest how I can get comparable information on the last stage of the process? I have no problem devoting hours to research—hundreds if need be—but I really have no clue where to go.

[Bruce Lynn]

@Sylvia Castellanos   You are correct about the videos.  Tax liens and deeds are very different than almost every other kind of real estate investing.  I think you can learn some general concepts from the videos, but will probably never learn all you need to learn.  I'm not sure which videos you are watching or what companies they are, but you're right in that it sounds like they're getting you interested to buy their "coaching" program....and $5000-$10,000 sounds cheap.  Some are $25,000-$30,000.   The real trick is that tax investing is really local to your market.  Almost none of the gurus are really knowledgeable about your specific market.  So just like the youtube videos you can pay a lot of money for their training and you're probably not really that much further ahead to invest in your local market.

If you tell us where you are or where you want to invest, we can perhaps point you to some better resources.  There are a few experts here on BP for a few states.  MD, SC, LA, TX, AL, OR and maybe a few others.  There are a few white papers for specific states for places like OH.  There are a couple of great teachers in I believe OH and FL and TX if that's where you are or want to invest.  Typically they are not really online teaching, but might hold a class or two here or there throughout the year.

I would also attend some of your local REIA meetings. Make it know that is what you want to do and ask for the local experts who might or might not be at the meetings. You may have to hunt them down. Also no better forum to learn in my opinion than go to your local sales. Network, ask questions, see who your local gurus are. That's who you want to learn from. If they will share with you. Some will, some won't.

I would caution about buying lots.  Know 99% what you are buying and what your exit strategy will be.  Do they have utilities or can they get utilities?  Are they in the flood plain?   Are they platted?  Are people building in the area?  Who will you sell these to?   How long do you need to hold them before reselling?  Is there a redemption period?   You are right that some realtors may not really want to help you with these.  Let's say you can get one for $50, and sell it for $1000.  Their expenses might be more than what it costs them to sell it...or what they will charge to make it worth their effort leaves you with no profit.  What expenses will you have while you are holding the property.  Insurance, Taxes, Mowing, Cleanup.  You also want to check the property before and after you buy.  Make sure no junk or environmental cleanup needed.  Make sure no one squatting.

I don't hear people talk much about OTC any more.  In my experience most of the OTC is junk.  There is a reason it didn't sell.  Couple of months ago at an auction with about 300 lots for sale.  Everyone sold and most for retail money, so don't expect bargains or flipping profits.  Possible gems here and there, but tax sales are no secret and there seems to be plenty of money floating around.  Another auction the next month, I see a nice property with $4000 minimum bid, sold for $400,000+  So you have to think if you have access to $400K in cash in the next 2 hours to pay for your purchase and then not be able to resell it for 2 years.

You might also want to read the book the 16% solution.  It does not detail every state, but also might give you an overview of the process and some idea about how things work in a few states.  Occasionally some places will also have a quick class that is an overview of how their system works.  Maybe 1-2 hour class, so check with your local authority who runs the sale to see if they offer a class.

Last thing to remember it is pretty much a cash business.  That means more or less you pay cash the day you buy.  No financing.  No delay in purchase.  There are some minor exceptions, but pretty much you pay the same day, and in some places like 5 minutes after the sale or you even pay up front before you bid and then get your money back if you don't win.

Good luck and best wishes....happy bidding.