Tax Lien Sales – Online Bidding Analysis
Are you flying blind when you bid at an online real estate tax lien certificate auction? Tax lien investors are very diligent in doing their research on the parcels they bid on in a tax lien auction.
But after your tax lien due diligence, what have you done to study the online auction bidding history? After all, the research is one step – and you’ve spent precious time on it.
Your competition in an online tax lien auction is NOT the parcels.
It’s the other bidders.
You probably have your favorite methods of doing your parcel research. Search online tax records, liens, Google maps, Zillow, Bing Maps, maybe even the EPA website.
How much time have you spent on your tax lien bidding strategy?
Sure most online auctions are “blind”. You don’t see the other bidders or their bids. How do you decide what is the best bid to make?
You might think, “Everybody’s in the same boat. There’s no way to get an advantage.”
I disagree.
There’s a common legal disclaimer in investments that “past performance is not indicative of future results”. Yet most investment analysts look at past history to help them estimate future price or returns.
I use the same concept when I do my Arizona tax liens online auction buying. I look at the past year’s tax lien results to help determine my bidding for the current year.
Wouldn’t it be helpful to know from last year’s auction, who won the liens?
How many did they win?
What interest rate did the winner bid?
How much did they invest in total?
Did they put in multiple bids?
Did they bid consistently at a certain percentage rate?
Did they only bid on a certain class of property?
What interest rate had the most winners?
What type of property had the highest interest rates?
What was the average dollar amount of a tax lien that won at each percentage rate?
The results are public record. Just like the tax lien list is a public record. I take the auction result records and enhance them with other data from the county website. It’s my own unique spreadsheet database.
Using this simple spreadsheet, I can filter on any column, or columns of data to help me determine the BEST bidding strategy for this year based on the results from last year.
The great thing about having this spreadsheet is that you can look and analyze this data different from any other bidder. You can have a completely different strategy than I have, based on how you filter and look at this data.
How many bidders do you think are doing any analysis on the bidding aspect of an online tax lien auction? I’d be surprised to see if even the Hedge Funds are doing much, if any, analysis on the bidding portion of a tax lien certificate auction.
So to get an advantage in an online tax lien sales auction, take advantage of the public results data and create your own spreadsheet to analyze the bidding from a previous year.