Ok, you’re a Tax Deed investor. You’ve done it before. You know the drill, the auction is coming up and the list just got issued by the county.
This is what you received:
That’s IT! Auction Item number, Parcel Number and minimum bid. Sometimes it’s in a downloadable spreadsheet format, most times it’s not. Sometimes it includes a lot of information (depending on the county you work) sometimes this really is all you get.
Ok, Let’s get to work.. You know what to do.
Create your spreadsheet with all the item numbers, APNs and minimum bids. Then you have to go to the County Assessor’s website and figure out how to do a parcel search for that county. Every one is different remember? Find the specific assessment information for that APN number and type the info into your spreadsheet detailing the property address, annual tax amount, special assessments if any, assessed land value, assessed improvement value if any, property type, zoning, date of most recent assessment, date of most recent transfer, owner address if different from property. Sometimes all that is in one place, other times it’s not. If they provided a site address, pop into your favorite search engine and search the address, maybe there’s a decent (recent) street view. Clip it and insert the photo into your spreadsheet.
One down! How long did that take? Somewhere between 2 and 5 minutes I’d expect. Awesome, Nice work! Now do the next one. What if there are 500 properties in the auction. Let’s say it takes you an average of 3 minutes per parcel to do the basic preliminaries, you are looking at 25 HOURS – just to get them into a format you can refer back to and add information to. What if there are 5000 on the list? Let’s not forget that even though you just got the list, the auction is in 30 days. Oh and you have a day job and a family! Better yet, let’s imagine you don’t have a day job but you have a portfolio of other properties that require your attention, now.
What is your time worth?
Tick-tock, the auction date is looming, now go through the whole list and narrow it down to the type of properties you invest in. Hopefully the assessor provided that information, if not. Back to the internet to find it. Identify the address or site location of each and dig! See what you can find. For example – recent MLS listings, area Craigslist, rental ads, city/neighborhood demographics, rough comps etc. Eliminate rejects as you go and highlight the maybes.
I’d estimate that would put you at another 15 hours, depending on how deep you follow the rabbit hole on each property.
That’s 25 hours building your database and 15 hours digging and sorting. 40 hours so far and you haven’t even left the house yet. Hopefully you showered and said hello to your family.
How many times during the process did you utter out loud, “Is it worth all this work?”
You’ve updated your list to remove any properties that have been redeemed and are no longer up for auction. Now to book your flight, hotel and rental car (or plan your road trip) to go drive by all the remaining properties on your list, poke around as much as is allowed, take pictures, talk to neighbors etc. Repeat.
Update your spreadsheet and narrow it down some more. Double check your estimated comps and consider margins for each property.
The auction is in a few days! Update your list again for redemptions. Go to the County Recorders office and spend at least one day looking at public records. Phone a friend to figure out what you’re looking at.
Narrow down your list again. Set your final margins and max bids and try to get some sleep.
Wouldn’t it be easier to have someone else do all the legwork? Simply order an Auction Package and get back to your life. How much is your time worth?
Let me do the hard work for you – Here’s how it works
You tell me what your target investment property is, what regions, cities or neighborhoods you are looking to invest in and I prepare an Auction Package for you including every property that falls within the parameters you set out.
You set your margins, you set your max bid, you register for the auction and you bid.
I charge a flat fee, up front, per county for an Auction Package to cover my hard costs and then a consulting fee that is a small percentage based on your winning bid.
I only work with one client per property type/geographic region or city so you will never be bidding against one of my other clients. That means space is limited.