I’ve been writing about tax lien investing since 2005 and I’ve been reporting from the field since 2009. In other words I’ve been telling my readers about the results of tax sales that I have been to for the last 12 years. I wrote about results from tax lien investing in New Jersey, Arizona, Florida, and Indiana, just to name a few of the states I’ve invested in. I go to a lot of tax sales in New Jersey and now that I’m a manager of a tax lien investing fund, I bid at the online tax sales as well as some selective live tax sales.
People think these tax sales have become a lot more competitive over the years. But looking back on what I reported back in 2009, things really haven’t changed much. There are always a couple of really big institutional buyers that go to every tax sale. Then there are those companies that come into the arena for a couple of years and then the market changes and they can’t tough it out. I’m seeing the same situation that I saw back in 2009 today. You can read about my experience at a small tax in New Jersey that I wrote about in 2009 HERE.
Compare my experience from then with my experience with tax lien investing in New Jersey this past month…
In just one-week last month I went to 2 live tax sales in New Jersey for the fund that I help manage. And we participated in 6 online tax sales that same week. Most of the online tax sales were very competitive and we were not successful at a couple of them. But we did get one or 2 liens and 3 of the online auctions. And we managed to get 6 liens in one of these auctions.
The auctions that we were successful at had either a lot of small utility liens in the sale, or had liens on types of properties that the larger funds don’t want.
I also was able to get 3 liens at 17% at the 2 live auctions I attended. One of these liens was on a residential property next to a house, that has a garage on it. The other 2 were on commercial properties.
So how do you have tax sale success in today’s competitive environment?
Part of the battle is just showing up. The fund participated in 2 online tax sales a day for 3 days during this particular week. In addition to that I personally attended 2 live sales. The live sales that I attended happened on days where there were a lot of tax sales. There were 17 tax lien auctions on the first day and 20 auctions happening on the 2nd day that I attended these sales. I also chose to attend the live tax sales in out of the way places – small towns that did not have a lot of liens in the sale. In fact one of the auctions I went to only had 4 liens left at the auction and they were all on commercial properties. I was able to pick up 2 of these good size liens at 17%.
Another way to be able to get tax liens in this competitive environment is to target property types that aren’t bid heavily. You can do this by analyzing the results of past tax sales. Most of the liens that we get are either on vacant land, commercial properties, or on small utility liens. (In New Jersey they sell delinquent utilities like sewer and water liens in the tax sale). And sometimes you just have to go to a few tax sales to find out which ones are worth participating in.
Have money to invest but need some guidance or mentoring? And tools to make it easy to pick the right tax sales to attend the right properties to bid on? See if my mentoring program will work for you. When you fill in the form at www.TaxLienInvestingMentor.com, you’ll get a link to schedule a 30 minute Profit Planning session with me.
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