How To Compete With Big Institutional Buyers
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Hi, its John Lane from TaxSaleLists.com…if you do know about taxsalelists.com we are the website that has provided tax sale lists, over 10,000 a year, for the past eleven year and also provide the only tax sale training done by somebody who has been a major buyer of tax liens (over 77,000 tax sale properties acquired over the past 20 years).
We get this question a lot — How can I as a little guy compete with the big institutional buyers
It almost sounds like” I’m not going to try because there is no way I can succeed”
The funny thing is that all of the benefits go to the little guy, not the other way around.
The institutional buyer (remember I was one) has to pay for everything he does…you don’t. He has salaries to pay, office rent to pay, interest on the money he uses. As a consequence the institutional buyer usually won’t bid on smaller liens because he cannot make money on them.
Because of this there are a number of liens in every sale that you can bid on and they won’t.
The biggest advantage the small investor has is that the institutional buyer can only afford to go to about 10% of the sales. Unless it is a sale in his back year he cannot afford to go to a small sale.
As a consequence the institutional buyer will attend sales where they think they can buy at least a million dollars of liens — but they have to pass up on all the small to medium sales since they can’t acquire enough to keep their “acquisition cost” below 5%.
To sum it all up.
The advantages are all with the individual buyer:
You don’t have a lot of salaries to pay like the institutional buyer so you can bid on more liens than he can.
You can go to the small to medium sales while the institutional buyer can’t because he can’t acquire enough liens at the small sales.
And finally, on each lien, your money is worth exactly the same as his money.
If you would like to learn more about tax sales, we regularly hold a free webinar about tax sales that will answer all your questions about tax sales.
To register for it, just go to http://www.taxsalelists.com or click the link below in the description.