Learning local laws and terminology is the step I see most overlooked. This is in spite of it being viewed as likely the most important task by USTLA’s mentors and myself. To explain this let me provide an example…let’s say Jane Doe wants to acquire properties in Texas. Jane has heard a lot of good things about Texas and has a cousin that lives there whom she could use as a resource. So Jane sets off pulling lists and researching properties. She is all set to bid at auction but soon realizes she does not know where the auction will be held, if it is live or online, how she should register, how she is to pay the county for her winnings, and she doesn’t even know how to determine the length of the redemption period. Wait, there’s a redemption period?!
Don’t let yourself be caught in a similar situation such as our poor imaginary friend, Jane. At this point she has wasted so much time and energy on an auction she won’t be able to attend because she is not prepared for it. Running a business means you need to be efficient, so before entering any new market take a moment to slow down and pull the auction rules, the FAQ page, and the state statutes that govern the sale. Read them more than once and jot questions down so you can then follow up with the county for answers. There has not been one auction I have attended that included everything I wanted to know in their rules. I always need to call to clarify some procedures and terminology. Remember to take notes on what you learn from county members so you have that as a reference moving forward.
Completing this part of your due diligence is important for another reason. It will help you determine whether you should be investing in a region to begin with. I’ll provide another example. Let’s say your ability to travel is very limited, so you need to target states that have online auctions. If you start pulling lists randomly and researching them before finding out how and when their auctions are conducted then there is no telling how many properties you’ve targeted that you cannot actually buy. Yes, you could hire a proxy but with such short notice that can be difficult.
In sum, read the rules, take notes, and call the county to clarify. Do this before entering any new market so you are prepared. Remember, this is a business and no entrepreneur will enter a market blindly.