20k to Start. Property Tax Auction or just Cold Call?

Question

Hi,

I have been thinking about getting into REI for a few years now and i have roughly 20kish. I have been looking at alot of advice here on BP but i noticed that no one is actually suggesting anyone with less startup cash to go to property tax auctions. IS there a reason for this? i was thinking about trying to get a lower priced property there and try to fix and flip or fix and rent hold and use the equity to get a mortgage to fund a couple more properties the same way.

Now since i dont see alot of people suggesting this approach i was curious if this was just one of those things that not alot of people have great success with or some other reason.

I just figured if i could get an auctioned house for 10k and put in another 10k-15k (will probably have 25k by the time i buy one) then i would see that as a huge win.

I see alot of you guys saying to cold call /drive for dollars and flip flip flip but i would think buy and hold to be a better turn around IMHO. I am not really against cold calling or mass mailing and im sure auctions are brutal but i wont take it personal if i dont win anything just testing the waters and the options.

Opinions?

Josh Carr · Answer

You could contact us and we will be happy to help you with anything that you need, listings, counties, etc. We also have tax liens that are ready for foreclosure which would be great for you to start with! m

Account Closed · Answer

In our area it is unlikely you will win an auction for a house for that price.

You can look on local constable websites or sometimes the attorney's website to find local tax auctions

Jeff Cox · Answer

Ok, Sounds about right. Josh i will probably contact you sometimes after the start of the year. I pretty much expected the auctions to be run by a group of wealthy buyers who will buy most of the good property so i was expecting only to walk away with low priced housing after reno to begin with and if i got something something better win/win..

If i get nothing thats ok to. I know alot of people say going through a wholesaler will kill my profits a little but i could get property i wouldnt likely find on my own so i may look into that.

Alot of great advice. Thanks!

Jeff Cox · Answer

Thats sound like pretty good advice. Any Suggestions on getting the Tax Auction List (is this something i pay someone else to get me) so i can start looking? im not in a rush but i want to get started fairly soon to atleast watch some of these auctions to get a feel for them.

Do these properties tend to sell for close to purchase + rehab = market value? Just curious if i should just sign/yellow letter for a better return. I actually have a renter already lined up if the numbers match so i am not really worried about flipping it but wanna refi and use the money again. Thanks again for the Advice!

Josh Carr · Answer

That would be a great amount for a tax deed auction in hopes of acquiring the property. You can look at a tax auction list and select the properties of interest. Whether you attend the auction live or online there is always the competition. As an experienced tax lien and tax deed investor I say one of the most important pieces of the auction is knowing when to quit. If you have set your ceiling but there are other people competing on the same property it can become a real bidding war. If someone is dead-set on a property that you would like to acquire that's what it becomes. If you know something about the property such as a new Wal-Mart or Airport, etc. is going up in the area, that may make a difference as to whether or not you are willing to go a little extra. If you are not careful then you end up paying the same price as if you would have purchasing the property for market value. There are always more tax deeds and tax liens to purchase if it doesn't work out the first time.

20k to Start. Property Tax Auction or just Cold Call?

20k to Start. Property Tax Auction or just Cold Call?

Most Popular Reply

7 Replies