Hey everyone, and welcome to the next mini course. Remember, these are a series of small courses, each with a few videos, but they’re part of a larger course about tax lien certificate investing and basically how awesome it is and how you can try to make a go at it and be as successful as possible, mitigating risk, increasing your profits.
So in this next series of videos, we’re gonna be talking about determining a property’s value before you buy a tax lien.
And as a reminder, my name’s Mike Decker. I’m a contributor to openpath.com.
Why is it so important? Well, as you’ll note, the most important phase of investing in tax lien certificates happens long before the auction, right? Way before you put down your money on the line, you need to evaluate. And in fact, there are four keys we’re gonna be talking about to help you determine a property’s value, and not so much assessed value. We’re more concerned with market value, right? What is the market willing to pay for this property? Once you have that number, you can decide the best exit strategy. Is this something that you should focus and hope to get interest on? You should plan on foreclosing? And then even if you do foreclose and take ownership, then what will you do with it?
It will help you decide your maximum bid. As an example, we always talk about the $100,000 house with $1,000 in back taxes. Let’s say it’s a premium bid. Should you really bid up to $90,000 if it’s only worth $100,000? Probably not, especially knowing that it has repairs and it owes taxes, right?
It also helps you establish your long-term budget. Remember, in most cases, you’re gonna be buying multiple tax lien certificates for a period of two, three, or four years before you can foreclose, if the person doesn’t redeem, if they’re part of that 1%. So you need to establish your long-term budget, knowing that the market value is gonna have a direct impact on how much the taxes are, which means how much you’re going to have to pay to buy those TLCs.
So what are the four keys that we’re gonna be talking about to help you determine a property’s value?
First, the physical inspection. Yeah, you need, if at all possible, to physically see these properties that you’re going to be bidding on. You need to understand as much as possible about these properties.
Second, if it’s land, how can you determine the market value of land?
What about if it’s a house? How can you determine the market value of a house?
And finally, what if it’s a house? How can you possibly estimate repairs, especially in the case of some of these where you’re not necessarily allowed to enter the structure?
So this is gonna be an awesome course. It’s gonna be key to helping you make better decisions, better investments, be smarter with how you spend your money, and to be able to actually increase your ROI.
So please stay with us for the next few modules. I think you’re gonna really be pleased with the time and the effort we’ve put into this course. See you in the next one.
