I finally figured out why I’ve been successful at investing in tax lien certificates, but have not been very successful at other types of real estate investing. All this time I thought it was just because there’s less money needed for tax lien investing than there is for most other types of real estate investing. But now I think that I’ve found out the real reason. It’s my negotiating and communication skills, or should I say lack thereof.
Most types of real estate investing require negotiation and communication. You have to get on the phone and talk to someone, negotiate a price, and make a deal. Worse than that, you might have to make a few cold calls – you know call someone that has a property for sale or rent who doesn’t know you from Adam, ask them about their property, and determine if they’ll sell it to you, at a discount and preferable for no money down.
Well I don’t know about you, but when it came to these calls I was terrified of the phone. It wasn’t actually the phone that I was afraid of but the person on the other end of it. It didn’t matter if they were calling me and responding to one of my “we buy houses” ads, or I was calling them on their for sale or for rent ad. And then I had to meet them in person, look at their property and negotiate a deal. I just didn’t consider myself a good negotiator.
With tax lien investing on the other hand, there is nothing to negotiate. Usually, I never have to talk to the delinquent taxpayer. The only person that I have to talk to is the tax collector and maybe the other bidders at the sale. I don’t have to negotiate the terms of the deal. State law already specifies all of that. All I have to be concerned about is exactly how low in interest or how high in premium I want to bid. No negotiating skills needed - Another benefit of tax lien investing over other types of real estate investing.
Money Magazine
