Some of the best property tax lien investments you will ever make will come in the ugliest of packages.
You have probably heard other investors say they are sick and tired of “tenants, trash, and toilets.” Usually, this is because they have been landlords for a long time and are getting a little burned out. However, as a longtime tax lien and tax deed investor, I can tell you that tenants, trash, and toilets are some of my favorite things when it comes in tax lien investments.
To explain that crazy statement, I need to make sure we all are on the same page about what “tenants, trash, and toilets” means. Basically, it means that when you own rental property, you have to go through a lot of hassles. The biggest hassles are the three T’s: tenants, trash, and toilets.
Tenants are, by nature according to many landlords, kind of difficult to deal with. They may not always behave reliably, or they may just not treat your property like their own. It’s human nature because, well, it’s not their own, and most people have a really hard time treating other people’s stuff with as much care and love as they do their own.
Annoying at times?
Natural tendency even in the best of us?
But regardless of how much empathy you have for your tenants, the odds are sometimes you get tired of dealing with them.
And if even the best tenants can sometimes be troubling, imagine how much more troubling trash and [clogged] toilets can be! As a landlord, you usually have to deal with these two issues far more than the regular homeowner because you own more than one home. Your tenants expect you to help out with their home as well because it is your rental property. In a bad month, you can find yourself bone weary of tenants, trash, and toilets. Sometimes, it even happens when you’re having a good month…
Tax lien investments with tenants, trash and toilets
So, what does this have to do with why I love tenants, trash, and toilets so much? To explain, I’m going to tell you about the PIP Group Deal of the Month for August. When we bought the lien on this little house, the previous owner had really done a number on it before they left. We were able to acquire the property, which, when cleaned up and updated, would likely be worth about $90,000, for just over a third of that because it was absolutely trashed. Most investors would not get near it when they saw not just the trash in the place but also the disgusting toilets and absolutely filthy interior. We, however, saw this property for the diamond in the rough it truly was, and decided to hold our noses and do the deal.
After cleanup and some repairs, we were able to sell that property to another investor looking to hold turnkey properties, rental properties with tenants in place that are popular with cash-flow investors. In fact, a lot of PIP Group clients actually use tax auctions to acquire turnkey rentals for themselves! At the end of the day, we were able to sell the property for nearly $100,000, placing our investor solidly in the black with an annualized return of 16 percent and a net profit of more than $20,400 – all in less than six months! It was a case of the magical combination of tenants, toilets, and trash working out just perfectly for everyone.