Bruce, again, I want to thank you so very much for the time you have taken to make observations I need to be aware of. I am extremely appreciative.
You ask me what my goals are in terms of instruments and geography. Obviously everything I do is a function of what my goals are, and yet at this point I can only partially answer that question. I have gone from knowing nothing about this subject to immersing myself in a telethon of instructional videos. Still, I realize I have only scratched the surface, not to mention I am arguably using a source that may be misleadingly rosy. I got into this because of learning that with otc tax liens I could earn not 3 or 5% on my money, but even 15 or 20%. Then I started reading about tax deeds and auctions.
Then there is the question of buying properties with structures vs. parcels of land. The arguments in favor of land make a lot of sense. The absence of a house, with its many potential problems, is a great advantage, especially for a beginner. At the same time, I realize I may have been exposed mostly to its advantages. Do you have thoughts on this? I have also heard several presenters say that we are likelier to find bargains in smaller locations rather than cities. Makes sense, although it leaves me wondering if selling the property will also be harder.
In a perfect world it would be my preference to buy in a fixed price setting. While I would like to think I would not succumb to auction fever, I can envision enough bidders going crazy to make the auction a pointless exercise. Your example of the property that had an opening bid of $4,000 but finally sold for $400,000 conveys the same lesson. A realtor I was talking to was telling me that at tax auctions in Allentown, PA, the houses were going for full market value. Allentown is a smallish and not particularly vibrant community.
I guess what I am trying to say is that I am in the process of learning everything the gurus say, but I understand I need a parallel education in how things work in the real world. While going the otc route is my preference if this remains a viable activity, your experience seems to indicate this is no longer the case. On the other hand, auctions don’t seem to be a good route, either. Does this mean that the good times have come and gone, or that greater discernment and effort need to be brought to bear on the decision-making process? I would very much like your thoughts.
Finally, there is geography, which involves two separate considerations. First, there is the matter of which states’ rules are the most favorable. I am watching videos on the different states. I know some states are tax lien states and others are tax deed states, but I don’t know enough about it to have a preference yet. All things being equal, I don’t want to deal with redemption states. I think of Florida as being one huge, saturated real estate bubble, so that has no appeal to me. The second aspect is how viable it is for me to buy and sell in a particular market that is far away and where I’ve never visited. There is the matter of how I can learn enough about it to make intelligent decisions. As a separate matter, I wonder how effectively I can market properties in the absence of contacts in a given area. I guess what I am trying to say is that my “preferences, ” such as they are, involve practical considerations and not geographical preferences.
I was watching a video on tax sales in West Virginia (https://www.youtube.com/watch?v=t94wd3dyuqo) where the expert made an important point—he said it was important to have created contacts in the various regions to be able to successfully sell there. That makes perfect sense to me. The YouTube gurus make it sound like it’s as easy as picking up a property over the counter and selling it on Craigs List. I have trouble believing that.
They say you should start as close to home as possible, so you can attend sales and size up properties yourself. Although I live in the Philadelphia suburbs, there are many semi rural areas surprisingly close to me. In addition to Pennsylvania, my thoughts are exploring in the neighboring states—New Jersey, Maryland and Delaware. That does not mean I could not leapfrog this process if someone in a state farther away is willing to help me. Since you are in Texas, let me mention that I feel this state has enormous potential. I think of it as having a wealth of undeveloped land and lots of prosperous people buying whatever is offered. Am I engaging in appalling stereotypes?
By the way, I downloaded the kindle version of the book you recommended and I plan to start reading it tonight.
Thank you again for the question you asked and the interest you have taken. I would love to hear your thoughts and those of other people on this board.
