The truth is, there is no real ‘secret’ to successful bidding at tax sales. It all comes down to knowing your competition. In other words what are the other bidders after, and how high are they willing to bid to get a tax lien? The only way to find this out is to go to enough tax sales so that you get to know who your competition is and how much their willing to pay.
This is kind of hard to do in the online sales, where you can’t always see who your competition is. Some online platforms do list who the bidders are, but others only list the bidder numbers. So the best way to find this out, even if you’re bidding in online tax sales, is to go to some live auctions in that state, if there are any.
I have participated in both the online and live tax sales in New Jersey. And I have found that sometimes I do better in the live tax sales and sometime I do better in the online tax sales. It all depends on these 4 factors:
- how many tax sale there are that day
- what type of area the sale is in
- how many properties are in the tax sale
- the face amount of the liens in the tax sale
In some states all of the tax sales are conducted on the same day. This is not the case in New Jersey, but there are some days where there are a lot of tax sales all going on at the same time. These are the days that I like to go to live tax sales. I like to pick the out of the way places that do not have a lot of properties in the sale, are not the most populated areas, and don’t have any very large liens in the tax sale.
The larger tax liens will draw out all of the hedge funds, making it very difficult to get any liens at a decent price. Tax sales in populated areas that have a lot of liens in the sale will draw more investor also, thus more competition. And so will tax sales in affluent areas where property values and taxes are higher.
For the live tax sales I have better results bidding in out of the way places that do not have many properties in the tax sale. But this strategy does not work for the online tax sales. For the online tax sales, I find it is better to attend the more populated areas, that are also undervalued or distressed. These are the less popular places to live, with lower property values and lower tax amounts. But they are in commuting distance to the cities where people work.
I do have other strategies, once I determine where to invest, on determining which properties to bid on. If you would like to find out more about how to determine which online tax sales are the better ones to attend and which properties to bid on than join me live in the Buying Tax Liens Online 3 Day Challenge. It’s free to register! Find out more at https://taxlienlady.com/3-day-challenge.
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