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Why You’re Not Winning by Saen Higgins
It can be deflating, completing hours of research only to attend the auction you’ve been preparing for and leave empty handed. Rather than feel bad, take a look at why you are not winning any tax liens or tax deeds. It could be because of a few reasons, or just one or two. Below are some of the most common reasons beginner investors have difficulty winning tax liens or tax deeds at auctions and ways to help resolve them so that if you suffer from the same problems, you can walk away a winner.
Getting Out Bid: This is something I hear regularly, ‘everyone out bids me.’ Well, are your max bids too low? It’s very common for new investors to lowball their max bid, so experienced investors who know the true value of the property have no issue leaving themselves a 20%-25% profit margin if there is some fierce competition for it.
Additionally, this may read as unbelievable to some, but some folks get discouraged because they try to win properties that are well beyond their budget. Yes, that 200K ARV property is gorgeous and would be an excellent investment, but if you only have 20k to invest with you will not be the proud owner of it. Now, 20k is plenty to start with, so either target properties with a lower ARV or team up with other investors to get the deal done. We never said investing in tax liens and tax deeds was easy, or that you wouldn’t experience some level of competition, so don’t mope! Get out there and make it happen for yourself, you have the skill set to do so.
Not Completing the Research: Folks, if you didn’t complete the research you’re going to hesitate while bidding and lose the property every time. And this is not to mention you shouldn’t even be bidding on a property you didn’t complete the research on. The only way to gain confidence is by completing your due diligence. Then you’ll have the confidence to purchase a property you know without a shadow of a doubt is a good investment. Every property has a surprise or two that may crop up during rehab, such as an extra hand railing that needs installation or a roof patch. But there should be no surprises as to the general condition of the home or any outstanding liens on it.
Not Casting a Wide Enough Net: I understand wanting to invest locally, but if you live in Dallas, Texas where the auctions have become fierce with competition, be sure to incorporate other counties, and maybe even states in your search. It’s easy to get comfortable, but the more regions you research the better at evaluating homes and completing the research you’ll become. And please, be sure to attend at least one live auction while you are working to get your training wheels off. It’s a very educational experience and some prefer it to online in the end.
Saen Higgins is the Co-Founder of US Tax Lien Association. He is one of the world’s foremost authorities on the subject of investing in Tax Lien Certificates and Tax Foreclosed Properties. He has been training and speaking internationally for over 25 years. Saen is passionate about sharing his philosophies on real estate investment and creating financial freedom. His extensive knowledge in the field of self-directed retirement accounts has changed the quality of life for thousands and the way they invest. Saen’s devotion to helping people creates true financial independence and is only matched by his business partner, Tony Martinez.