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Tax Lien & Tax Deed (4) – Finale
Continuing from the last post, I began my cross-verification process. I said, “I saw that you guys won a few biddings back there, congratulations!”
The other party said, “Thanks, but today’s pretty bad.”
As soon as I heard that, I took the opportunity to start complaining as well, and they couldn’t stop talking after that. The complaints just kept coming: “Yeah, before, it was just us few who knew each other, all professionals in this field. At auctions, we used to accommodate each other, and basically, everyone could leave with a full load of good deals and a decent profit margin. But now, so many new people have joined, and they don’t have a clue on what they are doing. They’re just a bunch of people pooling money together to buy for themselves so everone can live together to save cost, and the prices are all over the place. There’s simply no opportunity! It’s crazy to bid such prices! Another guy that we know, did a complete due diligence of all the assets he was interested in, even went to see them all (probably hundreds), and yet today, didn’t get anything, none of the prices made sense!”
I said: “So you guys only won two today, is that enough?”
The other party chuckled: “Of course not nearly enough. We’ve given up on auctions. Luckily, we have a call center dedicated to digging up off-market opportunities, and various methods of sending mass mails. We’d starve if we relied on auctions nowadays!”
While we were talking, two more acquaintances of theirs came in and sat down. One of them had a thick stack of documents in hand. I glanced at them and saw that it was today’s auction list. Listening to them chatting, I learned that they tried to bid on over fifty lots and ended up acquiring only one piece of land for $20,000. They plan to sell it to the neighbor, and if that doesn’t work out, they’ll put up advertising signs to earn some advertising revenue and then figure out how to get rid of it.
I couldn’t help but say, “So it seems like you guys aren’t counting on auctions anymore. Why not give a heads up to the guy that was sitting next to me? He seems like he’s in a tough spot.”
The other party was taken aback for a moment and then said, “You mean so-and-so?”
I nodded, “Yes, the young guys that was sitting next to me. You were chatting with him for quite a while.”
The other party burst into laughter, “That guy’s family owns the only luxury car dealership in Buffalo. They have been milking it for so long! You saw his dad sitting beside him right? He just got three Rolls-Royces in, and I wanted to go test drive one. We were just talking about it today, didn’t you hear?”
I was completely speechless.
They continued, “Oh, right, you’re not from around here. So, did you tour around such-and-such university? Several streets around there are all owned by his family. Just that area alone probably has over a few hundred doors owned by them. His family is local tycoons. Don’t worry about him!”
No wonder he was so calm. It wasn’t even his main business!
After that, I just focused on my food. The conclusion was too obvious. Tax sales are a dead end lol
Afterward, I summed up that property auctions are suitable for people who:
- Have their own construction resources, so, this basically isn’t a passive income model.
- Have other channels to get off-market deals rather than relying solely on auctions.
- Have no better income or higher cost-effectiveness for passive income channels. If you already do like me, it’s probably really not worth it.
There you have it, truly tested!