In this interview, Ted explains how to evaluate a property, what you want to look out for, and what research tools you can use to conveniently assess real estate online.
You may watch the video above, or if you prefer, read the transcript below.
The topics to be covered in “How to Evaluate a Property” are:
- Introduction: Ways to Evaluate Real Estate Before Investing
- Use GIS to Evaluate Property
- Research County Records to Determine Property Value
- Evaluate Real Estate by Physically Inspecting the Property
Want to learn how to invest in bargain real estate and earn profits beyond your wildest dreams? Would you like to buy mortgage-free homes for pennies on the dollar? Or earn double-digit interest rates secured by real estate? Then you don’t want to miss this FREE Gift.
Introduction: Ways to Evaluate Real Estate Before Investing
Purchasing a tax defaulted property can be a great way to invest in real estate at a discounted price. However, it’s important to thoroughly evaluate the property before placing a bid to ensure that you’re getting a good deal. Let’s discuss ways to evaluate a tax defaulted property.
Use GIS to Evaluate Property
GIS, or Geographic Information Systems, is a powerful tool that can be used to gather information about a property and its surrounding area. Using GIS, you can view a variety of data.
To use GIS, visit your local county’s website and search for the property using the address or parcel number. This will bring up a satellite map of the property and the surrounding area along with a lot of information about the property, such as its size, zoning, and property lines.
You can also use GIS to view aerial imagery of the property, which can help you identify potential issues, such as a leaky roof or overgrown vegetation.
Research County Records to Determine Property Value
Another important step in evaluating a tax defaulted property is to check the county records for any liens or outstanding debts on the property. These can include not only unpaid taxes, but also things like water bills or mortgages.
Here’s how to check for liens on a property for free. You can check the county records by visiting your local county’s website and searching for the property using the address or parcel number.
Once you have found the property in the county records, you can view the ownership history, taxes owed, and any outstanding debts. This information can help you understand the financial status of the property and determine whether it is a good investment.
Evaluate Real Estate by Physically Inspecting the Property
You don’t want to count on photographs of the property. Those images could be badly outdated. So, in addition to using GIS and checking the county records, it’s important to physically inspect the property before placing a bid. This will allow you to see the condition of the property and evaluate the neighborhood.
Pay attention to the overall condition of the property, including the condition of the roof, and take note of any structural issues, such as cracks in the walls.
Take note of the surrounding area and any potential hazards, such as nearby power lines or flood zones. This can help you understand the potential risks and challenges of investing in the property.
If you can’t get out there yourself, then have someone you trust view the property for you and send you a picture of it in its current condition.
We hope you enjoyed Ted’s lesson on how to evaluate a property. Evaluating a tax defaulted property before bidding is crucial to ensure that you’re getting a good deal.
By using GIS, checking county records, and physically inspecting the property, you can gather valuable information about the property and its surrounding area. This information can help you determine whether the property is a good investment and if it’s worth placing a bid.
If you want to learn more about tax defaulted real estate, view more of Ted’s free videos.
Ted is the authority on the subject of tax lien and tax deed investing and has been teaching students how to buy and sell bargain real estate for over 25 years. Additionally, Ted and his team of facilitators can show you step-by-step how to evaluate a property.
Ted can show you how to evaluate a rental property, how to evaluate a commercial property, a residential property, or vacant land, how to check utilities on a property, which is particularly important if you’re buying a vacant lot, how to check zoning of a property and also how to find out if there are easements or encroachments.
Ted can show you how to check for liens on a property, judgments and other encumbrances, and also how to assess the market so you can make a quick sale. Ted can show you everything you could ever want to know about how to evaluate a property, and most important of all, how to earn a lucrative profit from it.
Here’s an easy way to get started, and it’s free. Ted will send you a free auction list of tax defaulted properties that are currently for sale, just go to TedThomas.com/freegift. See the great deals for yourself.
Read the Transcript:
How to Evaluate Property
Randy: Thank you for joining us. I’m here with Ted Thomas who is of course the authority on tax lien certificates and tax deed auctions. Ted, you’ve been doing it for a long time. Looking good as ever and flashy as ever in that cool shirt, Ted. I always feel I dress incorrectly in front of you.
Ted: Nah, you’re not, that’s perfect for the internet. Everybody dresses in black. That’s why I do the opposite.
Randy: Well, you know, Ted, we have a lot of conversations about tax liens and the opportunity to buy a property. Maybe for folks who don’t know, very quickly, could you explain what buying a tax lien is?
Ted: Oh, sure. A tax lien certificate is nothing more than a piece of paper. If you buy a tax lien certificate, what you did is paid someone else’s property taxes. If you pay someone else’s taxes, you’re going to get rewarded. To buy the certificate, you raise your hand in an auction, and you give your money to the government. In return, they’re going to give you a tax certificate.
Ted (cont’d): Most people will come in and pay their taxes later. Something happened, they had a car accident, or the kid was sick or something, they didn’t pay their tax. While the tax certificate is outstanding because the people haven’t paid, it could be earning interest of 16%, 18%, 24%, all the way up to 36%.
Ted (cont’d): Tax certificates are an alternative investment, and they’re available in half of the states around the United States. We’ll talk a lot about these as we go along. Tax certificates are a good investment.
Ted (cont’d): Today we’re going to try to talk a little bit about tax defaulted property, which is more interesting for me because with tax defaulted property, you might be able to buy a property for 10 or 20 cents on the dollar with no mortgage and no deeded trust. Wouldn’t that be nice?
Randy: Well, yeah, it’s always exciting to hear that. Absolutely. But here’s a question. Before I go to an auction and buy that house, I’m assuming you don’t want to be buying just anything out there, right? You don’t want to buy a property blind. Would you explain how to evaluate a property that I’m going to be bidding on to find out if it’s a good deal? What should I do?
Ted: Well, I’m glad you said that the way you said it. You don’t want to just buy anything. You need to know how to evaluate a property. So let’s talk about. Some people go to the auction, and they think every deal at the auction is a good deal. I’m here to tell you the auction has property that is used and abused. You don’t want to buy junk.
Ted (cont’d): And they have some pretty good properties. You just touch them up, and you can sell them. You don’t want to go to an auction and buy unless you’ve looked at the property. Nowadays, you can buy everything online. So some people say, well, I looked at a picture. Well, what if the picture was 20 years old?
Ted (cont’d): Every woman would agree with me that you wouldn’t marry a guy unless you had seen him. Well, it’s the same situation with properties. I’m going to just show you some of the things that could go right, and I’ll show you some of the things go wrong. Let’s start with the right.
Ted (cont’d): If you look at the property, you very quickly are going to be able to evaluate if the roof is good. Is the outside condition good? What’s the landscaping like? Is the concrete broken? Is it in the right neighborhood?
Ted (cont’d): You can fix up all the properties you want, but you can’t fix the neighborhood. When you get there, look at the neighborhood. If the neighborhood’s bad, the property is bad. So you always want to make sure you’ve looked at the property.
Ted (cont’d): Now some people buy a property, and they don’t give it any thought at all. What if there was a hurricane? What if there was a flood? What if the property had burned down? What if it was next to a chicken farm or a pig farm? You’re getting the idea. Properties could have problems.
Ted (cont’d): You don’t want to buy a property unless you’ve evaluated the property. By that, I mean the structure and the condition of the neighborhood. While you’re there, you could also start to figure out what your exit strategy is going to be. Evaluate it. Figure out what you’re willing to pay.
Ted (cont’d): I can tell you if it’s burned down, you’re not going to have an exit strategy; you’re going to have a problem. What are you going to do with it? Once you buy at the auction, they don’t refund your money. The point is, you need to check the property before you buy it. It’s not a complex thing to do.
Ted (cont’d): You do the same thing with the documentation. For example, every property is going to have a file at the local county records, and you can check to see if there are any defects in the title.
Ted (cont’d): You want to check a property before you buy. Don’t just go to an auction, raise your hand and say, I’ll buy that. You don’t know what you’re buying. Don’t make your judgment based on a picture.
Randy: Ted, you mentioned checking out their neighborhood, and that’s really important. What about things like, if it’s in a flood zone or there’s some environmental hazard? How can you check up on things like that?
Ted: Good question because everything about a property is available. For example, we teach classes every day. In my office I have facilitators, and these are guides for new people. When new people get started, they can call the office anytime. Once they’re a client, they can call and say, “Can you show me how to do this?” and they’ll show them how to do it.
Ted (cont’d): They’re going to tap on the internet, go to the county, and the county records will show all of that. As a matter of fact, this is so sophisticated now and so easy. There are satellites that go around the world. Everybody knows that. But now they have what they call a GIS mapping system. Geographic Information System.
Ted (cont’d): It’s free. Your county has it. The satellite comes over. When it comes right over the property, you can look straight down at that property. You can see if there’s a geranium on the front porch, and that’s how well you could check.
Ted (cont’d): Then you can see if there’s a flood district. You can see where the river came down. You can see where the water is, the freeway; you can see everything. All of this stuff is available, and that’s what we teach. We teach people how to evaluate a property before they buy it.
Ted (cont’d): When you buy this property, you want to be able to sell it, right? I’ve been going to these auctions for 30 years. There are used and abused properties. There’s junk. Don’t buy the junk. There are also pretty darn good properties.
Ted (cont’d): I’m not negative about used and abused properties, because there are a lot of fixer upper people who will buy those from me, and so will the renovators. But don’t buy any junk. How do you know unless you go and look at it? You’ve got to evaluate the property.
Randy: Ted, you mentioned the eye in the sky looking down, and it’s so good. I think you put it, you can actually see a geranium on a porch, which is great. You’re talking about looking at a residential property. Is it the same process if you’re going to invest in a commercial property? The same kind of process, doing background check?
Ted: It’s the same process. With commercial property, the good is that it’s a very stable market, very stable. The bad is, it’s a stable market. It’s hard to get a lot of upside in commercials. The people who really make the money in commercials are the insurance companies.
Ted (cont’d): What they do is they buy the property today. As a matter of fact, they build it, and they take a long time to do it. But 30 or 40 years now, the people are passing away. They can sell that building, and then they’ve got plenty of money to pay for you. So they’re long-term investors.
Ted (cont’d): Most of my investors say, “Ted, I got to make some money this year.” If you want to make money this year, you want to buy properties that you can sell this year. I don’t do a lot of business in big commercial, but we do small commercial, little fourplexes, or small apartments.
Ted (cont’d): We try to do a lot of basic traditional real estate, houses, vacant residential lots, small apartments and small commercial. You check them out the exact same way. You go and look at it.
Ted (cont’d): If you buy a property and you don’t have boots on the ground, I’m telling you it’s a huge mistake because one day, you’re going to end up with a property that you’re going to wish you didn’t have.
Randy: You mentioned the county. The website can provide a lot of information, but is there any other information? Can they provide all the information I need to know about a property or neighborhood, or are there any third party services?
Ted: Everything about every property in the United States, every time it’s traded or exchanged in any way because there’s a tax on it, the government is following every property.
Ted (cont’d): There was once all farmland in the United States, then the developers came in, and they subdivided. They had to get permission from the government. The government knows where the roads go, where the land survey is. They know what it costs to build that house. They know what the tax is, they know.
Ted (cont’d): I can look up your house and tell you what the value is, how many bedrooms it has, how many bathrooms, what color it is, how old it is. All of that is public information. Everybody can do that. We teach people how to do that.
Randy: We’ve talked a lot about, checking out the property and making sure of everything. How do you discover the property in the first place? How do you check for liens on a property, and can you do this for free?
Ted: It’s easy to do it for free because the county records have all that information. The county records are tracking all of that. I find out about the properties because the county is going to make brochures of the properties that are for sale.
Ted (cont’d): They put the properties in here, and they’re going to give you the parcel number on every one of them. You can look it up and find out exactly what the county thinks it’s worth, in other words, the tax assessed value.
Ted (cont’d): You can find out a lot about the property, even what the minimum bid is before you go to the auction. You can go and look all that up. Everything is wide open for people to understand.
Ted (cont’d): This is a business that’s been around for 200 years. I didn’t invent it. I used to have black hair when I started. They’ll still be doing this a hundred years from now. This has been around a long time.
Randy: You’ve been in this business for a long time, and I know you’ve helped a lot of people learn it. This is some good common sense stuff you’re talking about, and obviously there’s a lot more to learn. Is there a way that people can get a sense of an overview of what your classes and your courses teach?
Ted: Absolutely. Thanks for asking that question. Folks, stay tuned here. Austin is our editor and just watch this video. It only takes a minute. You’ll really like it.
Randy: Hopefully that gives you an idea of what goes on at Ted Thomas, the classes you put on. It’s pretty neat, Ted, and it’s a nice overview. I do know, if you want to give these folks even a flavor of what it’s like to get started in this, there’s an offer you have, what is it? Maybe you can tell them right now.
Ted: The easy way for people to do things is just go to tedthomas.com/free. If you register there, we’ll actually send you an auction list. I’ll give you a free auction list to get you started so you’ll know what it’s like.
Randy: It’s a pretty neat offer. Take Ted up on it right now, and get your toes wet in this. It’s an exciting business. Ted, thanks so much for sharing with us today.
Be sure to get your Free Gift
Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.