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Tax Lien & Tax Deed (1) – Are US Auctions Worth It?
After many years of managing private equity in the real estate space in Canada, I’ve grown increasingly frustrated and tired of the whole thing. The law is so flop sided and the profit margin was driven so thin, that it was no longer a very attractive asset class anymore. Still, I heard the US was full of deals everywhere so I’ve started paying attention to tax sales in the US as a start to test the market. I have also seen an explosion of auction courses arriving in my inbox, meaning this space must be still very active and profitable so I assume. So, naturally I want to test it out. As always, I’ll be using my own funds for these experiments, ensuring absolute authenticity of the results. This way, everyone who read this will have access to real data and can decide whether these paths are suitable based on their own conditions and preferences. Wishing you all a joyful journey in making money!
As a blogger who lives off passive income, I’m always taking a cautious approach to avoid unnecessary loss. I’d like to take a moment to discuss the framework of my decision-making process. I’ve always placed great importance on figuring out the direction first—going in the wrong direction could result in more losses the harder one works. Therefore, I typically conduct research in the early stages, establish what I believe is the correct direction, allocate resources and time accordingly, and make adjustments based on real-world feedback.
In terms of evaluating the US real estate market, here’s my thought process:
Firstly, I’ve been involved in similar endeavors in Canada for many years, trying various strategies and encountering numerous pitfalls and setbacks. Most strategies didn’t align with my goals, or I couldn’t assemble the necessary resources to pull it off. Consequently, with the number of strategies in the US, my principles are clear:
- Avoid construction projects
- If the time commitment for a transaction exceeds my current laid-back approach, it’s not passive income. If the returns aren’t substantial, it’s a pass.
- If the returns don’t even match my current hassle-free, 10%+ ROI in Legal Lending where I don’t have to do anything, then it’s a pass
This way, many strategies have already been filtered out. For instance, I won’t engage in the rebuild and value-add projects I currently still have to do in Canada, and I won’t multifamily that I already do in Canada. However, I’m open to testing strategies like lending and auctions in the United States, especially auctions, despite my skepticism towards the widespread “rumors” of easy money (I don’t believe them at all).