What’s the Deal with… Tax Deed Auctions?

Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, thelandgeek.com and on this week's roundtable podcast, we have almost all the usual suspects. We have the technician, Eric Peterson. Eric, how are you?

I'm well, thank you.

Good to see you. We've got triaps putting in the reps. Harris, Tria. How are things?

Things are well.

Good to see you. Happy. Happy to have you here. I love it when you call me Big Papa. Tate. Litchfield Tate. How are things in Sin City?

We're good, man. Happy to be here.

Good to see you. And last but not least, you know him, you love him. The brain, the professor, your flight school Sherpa, Scott Todd. Scott Todd.netlandmodo.com Learn anything about anything. Investor ninjas. Scott Todd. How are you? Mark?

I'm great.

How are you?

I'm great. We've got a great topic for this week's roundtable podcast. And if you are a Seinfeld fan, you are going to be overjoyed by our roundtable discussion because we got nothing. It will literally be a podcast about nothing. Yes.

I don't think that.

I have a feeling, though, there's something is going to come out of it. And by the end, Tree will have a tip of the week and there will be some value that will be imparted to you. Dear listener, what it's going to be, we literally have no idea. So if you're listening to record, I.

Said this was a bad idea.

Keep your expectations super low for this podcast. I'll tell you what, though, I did have an interesting email which I could just bring up. So someone in flight school had read Dirt Rich and emailed me, hey, I noticed that you got started going to tax deed auctions. There's an auction in this county in Florida I want to go to. I'm like, oh, okay, that sounds like an interesting idea, but I don't recommend it. And the reason I brought it up in Dirt Ridge is like, that's how I first got started. But we've evolved since then and now we want to get those properties before they go to a competitive tax deed or tax lien auction situation. So my question, dear panel, is given where we are in the market today, would you recommend going to a tax deed or tax lien auction? Eric Peterson, let's start with you.

Hold on. This does not sound like a podcast about nothing. This sounds like we got baited into this podcast podcast without knowing the topic. I mean, none of us signed up for this, we all signed up just to roll. Now you're throwing a topic at us.

I'm bringing a topic because we have to talk about something even Seinfeld had a show about. It was still about something, even though it was really a show about nothing. Like, the show still had a beginning, a middle and end.

Seriously, we've been duped. But, Eric, what do you say?

I totally agree, but you are like the curmudgeon, like George's father. And now the feats of strength. Why would you have problems with you people?

Why would you bash Eric like that?

Eric, start yelling. Serenity now.

All right.

The funny is like, Kate's generation has no idea what we're talking about.

Yeah, you know, this is over my head right here.

Got nothing.

I have nothing. Seinfeld once it was funny.

Auctions. Let's get back to tax deed auctions.

Let's.

Let's move on. So I've never. I've never been to one. I know people that have. And I guess the reason I've never invested a lot of time in, you know, kind of going or figuring out how to acquire properties using that methodology is because I just. From what I've heard, the competition is pretty fierce at those events. And, you know, if. If you're going to do it right, you're going to do some research beforehand, you're going to invest a significant amount of time to know what properties you' interested in acquiring. And if you come out the other side with nothing, you've spent an awful lot of time to get nowhere. Whereas, you know, the method that we teach today, sending offers in the mail, it takes a little bit of time to prepare that list and have your VA team, you know, upload that to LG Pass and all of that. But we do, in a sense, kind of beat the competition in the sense that, you know, we're. We're talking to these people that might not care about their property anymore. Prior to that, those properties going to tax deed auction. So it gives us a little, I guess the competition that we're going to see is going to come from other offers arriving in their mailbox. But the reality is, even though they may be receiving other offers, it's not as much competition because it's really, in my experience, it's more about being in their mailbox at the right time. Okay, that could be. It arrives next Friday. And, you know, they just. They're ready to sell that property. They just saw the tax bill and they're like, I'm not paying this thing. Why Do I. Why do I even keep this property? I need to sell it. So I don't know. That's. That's my thought on it.

I think it's a really good thought, but I'd love to hear what Sharia putting in the reps. Harris thinks.

Like Eric, I've never been or participated in a tax auction. I have had other land investors who have, and they thought it was great for them. I would imagine it would depend on the county that you're in. The county that they were in seemed to be a little easier to navigate the system and get your offers in. But then I've also heard horror stories where the county website was awful and it's just difficult to get in there and negotiate, navigate. So I wouldn't be opposed to it. If things got extremely hard and the system in which the way we're doing it now all of a sudden didn't work, I wouldn't be opposed to trying that. But we get accepted offers all the time back, and I just don't feel the need to have to go do extra due diligence before I even purchase a property because that's time and money spent. So for me, I wouldn't be opposed if this stopped working. I don't see this ever stopping in terms of working for us.

So, yeah, I mean, I totally agree with what you said. I want to play devil's advocate. I want to be the Kramer of the roundtable. You know, recommend going to a vet instead of a regular doctor. But no, we have to move over to. I love the fact that Tate's not getting any of this inside baseball at all. Tate, what about you? Tax deed, tax lien, auction. Would you go?

I have, and I would definitely consider it. I agree to what everybody else said. It certainly requires a little bit more homework ahead of time. And if you don't have a lot of time to spend on the land business, it's probably not the best use of that limited time due to the competition, due to the upfront work, due to the circumstances around it. However, it is another method to acquire land, and I see nothing wrong with it other than the work associated with the potential of getting nothing. I think you got to be aware of the fact that it's going to cost you more. There is going to be competition in most cases. You can attend these auctions online. So that's one thing that has significantly changed in the last 10 years, which is beneficial to all, but it does allow more people to participate, which is going to increase the cost, certainly.

Yeah, absolutely. And to Eric's point, if you're spending all this time upfront doing the research, then you're getting a hotel room and a flight or driving, you're spending more time and money to even show up to the auction. That being said, you could also hire a bidding service to do it for you, but most people aren't going to have that kind of volume. You're going to have to show up with cash, by the way, so you have to go out, you have to have cash at the ready. So you guys have to go to the bank and have cashier's checks ready made out to the county treasurer of that choice. And then you've got a bid and it's competitive. So oftentimes you'll find that you're overpaying. So you don't want to be the person in the puffy shirt in the back of the room being accused of being a close talker or a low talker and not getting any property, for sure. Scott Todd, are you going to play devil's advocate here and say you love going to the auctions?

Well, okay, so I think it's important to remember or to recognize that there are two different types of auctions. You've alluded to one and Tate's alluded to one. And specifically the one that you just alluded to, which is actually going, you know, entailing, you know, booking a flight and staying in a hotel and driving and doing all this other stuff. That's one form of it. And to some extent, I mean, like, that, that is competitive, but it's not as competitive as what Tate referenced, which is the online auction in Florida, for example, because I think you mentioned at the beginning that they said that the auction was in Florida. Should they go? Now, Florida does have live auctions, but not many. Most of them are online. And the thing about it is that it's just that you can seriously have anybody from anywhere in the world bidding against you. And what I find often, oftentimes what I find is that the going price of these properties at tax deed auctions, especially of late, are actually more like retail prices. And so what you have there is, you have definitely, you have the neighbors going there to bid against you, and they don't, they don't care. They're not in it from that component of it. Right. You have people that are just, you know, happy to, to acquire anything at any price that they perceive as less than the value of it. So maybe the prices of the land is like, I don't know, $18,000 a retail price. I'm just making a number here. And you know, people are happy to buy it for 15,000 or $14,000. So I think that you get much better deals by going to, by going directly to the, to, to the buyers, by mailing to them as you do, getting them from the tax deed auction. I mean, clearly there's something exciting about auctions, right? Like, there's something that gets you going that you want to like. It becomes a fever pitch is what it becomes. But at the end of the day, you know, I think that oftentimes, oftentimes you end up spending more money. And maybe in a recessionary environment or a crash environment, it wouldn't be that way. But in times like today, not recommended.

Yeah, I totally agree with you. I mean, if you want to get your adrenaline going, besides obviously binging on Netflix, some Seinfeld, go to Vegas. Because there's a difference between speculating and investing. And what we teach is an investing protocol. It's basically, we're buying this property's 25, 3 cents on the dollar. And we know that definitively you don't know what you're going to pay at the Tate's Point, an online auction or a live auction. It's going to be competitive and then you're going to be speculating and you're going to feel compelled to overpay, which is the cardinal rule. That's the only way to lose money in this business is literally to overpay. So why on earth would you spend valuable time on this inefficient way of acquiring land when you can just get it efficiently, straight from the seller who no longer wants it? Is my point. Now, to Scott's point, and I've actually experienced this back in 2010, you can get deals, let's say 2010, 2011, in a market where nobody seems to like the land business anymore? I think those days are gone. I think there's just too many people now, I think, that know this business and even in a, in a recessionary environment, they're still going to want to buy property and they'll show up. Right? It won't be as competitive as today, but it's still going to be competitive. And you're still not going to be. You'll still probably be. It's a 75 cents on the dollar. It's still not 25. 3 cents on the dollar. Scott, would you disagree?

No, I mean, I think that, I think it's, it's not, it's. Look, there's still deals for us But I think that when you. When you can seriously just buy land from anywhere in the world, it's easy, right? Like, it's easy. And so, again, I don't. I mean, I don't know what the future will hold for tax deed auctions, but there's a reason we don't really talk about it. It's not like we're using it as some secret channel. It's just that it's just not there. It would be the equivalent of us. Like, we don't talk about selling land on ebay either. Right. Like, at one point in this podcast history, we did. And at one point we also talked about Craigslist too, but we don't do that anymore. Why? Because the market changes and markets evolve. And, you know, it's not saying that we won't go back and start talking about that, but it's just not revelant. It's not prevalent today.

Yeah, I mean, I think back in the day, I sold hundreds of properties on bid for assets.com. i never talk about bid for assets, but. Go ahead, Tate.

I mean, I was just going to.

Say take the path of least resistance ultimately.

Right.

And there's something real satisfying about doing a mailer and getting a response there. It's pretty easy to do. It's easy to process. You've got a little bit more time. Good communication is all that is really needed to keep your buyer kind of intrigued and knowing that the property is. Or the. The sale is moving in the right direction. And I don't know, at the end of the day, that's kind of what we preach and what I want to continue to do, personally. Just. It's way easier, way less stress.

Yeah. I mean, if you're. If you're looking for a way to get more properties and you don't want to mail. I don't know. I think we've done a couple podcasts on a little method that we call wholesaling. Why not buy it wholesale? You eliminate the entire front end of the business. You don't have to send out mail. You don't have to get a list. You don't have scrub a list. You have a price list. You don't have to go through the one or two seconds I think it takes to upload a list into LG Pass. I don't know. Scott, how long is that taking now?

Like, after it's all set up? I mean, I don't know. Seconds, man. Like, not. It's. I mean, it saves. If you use the same list, every same list, headers every single time. It saves it. LG Pass saves that for you. So you don't have to match it up anymore. You just have to hit some buttons, three buttons, and then you gotta wait there. It takes about a minute to get it queued up, and then after that, let it go. So, I don't know, actual work involved seconds, if you want to sit there and wait for it, to watch the little bar go across.

Minute.

All right, so we can eliminate a minute of your life by not having to send out mailers and LG Pass. And then you buy it $0.50 on the dollar and sell it 90, 100 cents on the dollar and you make your margin and you've avoided the inefficient work of doing due diligence on a bunch of properties that you may never be able to acquire. The inefficient work of an actually competitive environment where there's no guarantee you're going to get that property. So it comes down to our simple business philosophy. If we can always make more money, we can't get more time, and we might as well do it the most efficient way possible. So I don't know, what do you think, Tria?

I like it. I agree that you can set yourself up sometimes in auctions because it does become. I don't want to lose. I don't want to lose. I don't want to lose. So that's something I would need to very much so be cognizant of if I ever went to one.

Yeah, exactly. I mean, Eric, in Franklin, Tennessee, I'm sure there's livestock auctions that you attend all the time. You see these ranchers over, overpaying. Right.

I'm sure it happens. I've never been, but yeah, I think I like what Tate said. It's about the path of least resistance.

Right.

And that's why we teach what we teach. And even beyond that, when we compare the potential inventory from tax auctions compared to all the properties across the country.

Right.

We have access to so much more the way that we mail. Granted, not every one of those properties is going to be for sale when we send an offer, but certainly some of them are. And that's how we successfully acquire land over and over and over again.

Exactly. And there's no shortage of it at all. So it just again, seems like just an inefficient way to try to acquire property. But I have to say, I was really impressed that this person read the book and I thought, oh, well, this is how I'm flattered this is how Mark started. Maybe it'll still work, but things do evolve. Things do change. Markets are constantly changing. And to Scott Todd's point, we're not talking about ebay anymore, which is, again, how I started as well. I thought, this is a great podcast about nothing. Turned out to be something that you had it, Scott. I did not have. I literally did not have a topic.

I mean, I feel like you think I railroaded this right off the bat.

How much time do we spend before the podcast trying to come up with a topic, and we had nothing?

Four and a half minutes.

Right? Four and a half minutes.

And then magically, you have it.

Boom.

I'm just saying.

Okay, first of all, you can see in real time Tate's blood sugar, like, you know, lowering here. We don't have a lot of time for these podcasts.

I mean, are you. Are you saying that Tate is getting hungry from the rib hanging out of Eric's mouth? Is that what you're saying?

The proverbial rib. It's possible. Definitely possible. For those of you, for the three of you that actually watch this on YouTube, you can see that Eric doesn't have a ribbon his mouth.

He's looking.

I was looking to see if I.

Could find something that could function as a rip, but it's not there.

All right, well, before we get to Tre's tip of the week, I do want to just remind the listeners we do have a sponsor, and it's flight school. Learn how the next 16 weeks can transform your life. Go up the mountain of land, investing quickly, safely, efficiently, efficiently with Scott Todd as your Sherpa who's done it thousands of times. And that flight school tuition ain't going to cost you nothing, guaranteed. Just show us your work. You're going to make it back 180 days or less. But the first step is schedule a call, learn more about it. Go to the land. Geek.com training thelandgeek.com training. Get on a call and find out if this business is right for you. All right, Jerria Harris, what is your tip of the week?

So my tip of the week is for specifically those who are posting pictures on Facebook, and Facebook does not like for you to post the same picture. So we have these tips that we do, these little tricks we do to generate new photographs. So I had a VA who used to. We used to tell him which pictures, you know, folder we wanted him to change, and he would do that. However, I found a website that is called be funky.comb as in boy, E as in Echo Funky with the Y.com and it allows you to bulk load hundreds of pictures and like change the color saturation all at one time, change the size all at one time. You're not having to do it individually for each picture. So the free version doesn't give you the color saturation. So It's I think $60 annually or 999amonth in order to get all the bells and the whistles where you can bulk change pictures hundreds at a time.

That's a good tip. Wow. Tate, what do you think? I can see you intently looking at your screen.

Yeah, I'm just, I'm looking at it. Is there, there's a, is there a limited. How many you can edit it in a single month or is it unlimited?

It's unlimited on the upgraded plan.

You know, these are great tips because it's something that all marketers struggle with is, you know, we can't afford to go out and get new pictures of the same property 10 times. So you have to learn how to get creative and recycle images. And this is just one of those tools that you can basically go in there, resize it, you know, with some other tools and then change it up a little bit and make it unique.

I love it.

And for 10 bucks a month, it's a no brainer. The fact you can do it in bulk too means a VA could do.

It all for you in one swoop.

I like it.

It's even cheaper if you fork out the $60. It's like 59.99 or something for the whole year.

You know, we could do a whole podcast just on, on pricing right there. What we, I mean, just, just how to be irresistible. Like that's an irresistible offer, right? 9.99amonth. So it's a, it's like basically 50% off to just pay for it annually, which is really the smart way to do it. That's a whole other podcast. We'll talk about that another time because we're starting to get low on ideas here. Anyways, I thought it was a great tip and if you're getting value, please do us three little favors. Follow Rate Review the podcast. Send a screenshot of your review to support helanc.com I'm going to send you for free a signed copy of Dirt Rich. And you know what I might also start doing? If you leave a review, I might actually start reading out your review and give you a shout out in real time because I think it'd just be good for all our fragile egos. What do you think, Eric? Would you like that? Go for it. Just kind of read it like Andrea 1927 says. Yeah, Eric Peterson's the best. No, Land Geek and my favorite.

They're about me. Skip them. You can read the ones about yourself.

No, no, well, of course I'd read them. I'd hand pick those ones for sure. You know, and then. And then anyone that did not mention Scott Todd, like, you can see how much. Scott. Scott. Yeah, you know, but anyways, after this will be the feats of strength. So no worries. Not. Not a problem. Anyways, thank you, listeners. Please do it. It's a. It's a huge favor. And are we ready to do this? 1, 2, 3. Let freedom.

Freedom ring.

All right, thanks, everybody.

Thanks for listening to the Art of Passive Income podcast. Are you ready to learn how you can start building a passive income without renters, rehabs, renovations or rodents? Schedule a free consultation at the land geek.com forward slash training. Let freedom ring.