Do you want to know what's wrong with most real estate investing advice?
It's all about finding deals through agents, wholesalers, or sending thousands of direct mail pieces.
Everyone's fighting over the same properties, driving up prices and killing profit margins.
Meanwhile, there's a massive opportunity sitting right under your nose that hardly anyone talks about.
What Is A Tax Sale Auction?
An opportunity so overlooked that properties are being acquired for a fraction of their true value.
I'm talking about tax sale auctions.
And before you roll your eyes thinking this is just another ‘get rich quick' scheme, let me share something that might shock you.
Every single day, around 3,000 properties go up for tax sale auction across America.
Not because of mortgages, not because of market conditions, but simply because someone fell behind on their property taxes for three to four years.
I have a friend who recently bought a property for just $2,500, and it's currently rented for $800 a month.
Think about that: he got all his money back in just three months of rent payments, and he still owns the property free and clear.
This isn't about luck or timing the market.
It's about understanding a process that most investors are too busy to learn.
And today, I'm going to pull back the curtain and show you exactly how tax sales work.
Let's start with the basics.
When someone doesn't pay their property taxes for three to four years, the county takes action.
It makes sense – they need to pay the firefighters, fix the streets, collect the trash, and keep the city running.
So, they sell these properties at auction to the highest bidder.
Finding these opportunities is surprisingly simple.
A quick Google search for your county and state plus “tax sale list” will lead you straight to the tax commissioner's website.
There, you'll find a goldmine of information: property addresses, owner names, and, most importantly, the amount of past-due taxes.
Often, you'll be shocked at how small these amounts are compared to the actual value of the properties.
But there is something crucial that most new investors get wrong – timing.
You might be tempted to jump in and start doing extensive research on every property as soon as you get the list. Don't.
Here's why:
Many property owners, when faced with losing their homes, will scramble to pay their taxes at the last minute.
Others might file for bankruptcy or enter into payment agreements.
That's why you want to wait until about three to four days before the auction before doing your serious due diligence.
When you do start your research, here's what to look for:
Start with Google Maps and Street View.
Get a feel for the property and the neighborhood.
If it looks promising, drive by and check it out in person.
Look for telltale signs of problems – are the windows rectangular, or are they racked out of shape (which could indicate foundation issues)?
Talk to neighbors – they usually love to share information about nearby properties.
Now, let's be honest about the risks.
These properties aren't usually in pristine condition.
They're often run-down and might not be in the best neighborhoods.
But that's exactly why the opportunity exists.
While other investors fight over pretty houses with thin margins, you can acquire properties at such low prices that the profit potential is substantial even with renovation costs.
Here's something else most people don't tell you: this is a cash business.
You won't get traditional mortgage financing for these properties.
Banks don't want to deal with the uncertainty of tax sale titles.
Make sure you understand the payment terms before the auction – whether they require cashier's checks, ACH transfers, or advance deposits.
Many counties now require advance registration to bid.
Check these requirements as soon as you get the list, usually about a month before the sale.
There's nothing worse than doing all your preparation only to find out you can't bid because you missed the registration deadline.
A word of caution: stay away from commercial properties, especially former gas stations, dry cleaners, or factories.
Environmental problems could leave you stuck with massive cleanup costs.
Stick to residential properties and vacant lots when you're starting out.
But here's where it gets really interesting.
While tax sale auctions are great, there's actually an even better way to acquire these properties – a method that lets you bypass the auction entirely and get properties for just the taxes owed.
No competition, no bidding wars, and more time to arrange your financing.
Think about it: instead of competing with other bidders at auction, driving up the price, what if you could get these properties for exactly what's owed in back taxes?
That's how my friend got that $2,500 property that's now generating $800 monthly in rent.
He's built up an impressive portfolio using this method, and it's completely changed the game.
The tax sale business isn't perfect – sometimes there's litigation, and sometimes people file bankruptcy after the sale.
But in exchange for dealing with these occasional headaches, you get access to some of the lowest prices in real estate investing.
If you are ready to learn more about tax sales and discover the method for acquiring properties without auction competition, I've put together a detailed training that shows you exactly how to do this.
You'll learn how to find these opportunities, evaluate properties properly, and, most importantly, how to acquire them for just the taxes owed.
