subject: Tax Sales: The Tips You Need To Succeed [print this page] Whether you plan on making it your new living, just want to make some extra money, or simply want to experience something new, tax sales have something to offer everyone with a bit of capital. Not only do these auctions represent an excellent opportunity to make some money, they often prove to be a fertile ground for investor networking, an essential component of getting deeper into the field. As with anything, the more experience you gain, the better you'll do in the auctions. That said, you can improve faster by taking advantage of the wisdom passed down by more experienced participants. Here are some tips you need to succeed.
Create a Strategy
Too many people show up to the tax sales without any real plan. While this is fine if you just want to get your feet wet and see for yourself how everything works, it's not okay if you are interested in making an investment. For that, you'll need a strategy. Are you interested in buying properties that could use a bit of work? Would you rather spend a lot of money and hope that you can sell for a slim margin of profit. These are the things you need to consider before you get out your checkbook, not after. Also, this should go without saying, but don't buy anything you can't afford.
Due Diligence
If you were heading out to buy a house for your family, you might do hours-if not days-of research on a piece of property before you made an offer. For some reason, investors don't see bidding at these tax sales in the same way. Maybe it's because you're getting a house for much less than you would on the open market. Maybe it's because it's such a different way to buy property. You need to do due diligence on any house you're thinking of buying. That means comparing similar sales, looking at the repairs the house may need, and doing some market research.
Discipline
In your first few experiences with tax sales, it's easy to get caught up in the excitement and the fantasy of making that huge investment that will instantly change your life. When that happens, discipline goes out the window and you start taking big gambles. Remember, investing in real estate is not gambling. It's about skill, patience, and research. If you do those three things, you'll come out ahead eventually. If you wildly gamble, you're almost certain to lose in the long run. Stay focused, pay attention, and don't do anything in the heat of the moment that you'll regret later.
