By S. Jack Butala
There was a time that our real estate companies relied solely on in-person tax deed auctions to supply our land sales
chain. I was on the road in Arizona, New Mexico and California much of the year.
Most of the time each auction was comprised of between 100 and 300 properties per live event and most of the people who attended the auction lived locally and where there for one specific property.
That would leave me and sometimes one or two other investors to bid and win on properties for the minimum bid.
On occasion, amazing acquisitions would happen. Here’s a few stories;
1) Ice Storm
Because I was single and unattached, I choose to remain on the road from auction to auction and complete due diligence, research and build local relationships during the down time between events.
One night In Santa Cruz County New Mexico, in 2001ish, I checked into a dumpy motel at the county seat, had a couple of Scotches and some incredible Mexican food and completed the spreadsheet for the auction the next day outlining the properties I wanted and maximum bids.
There were 100s of 2.5-acre properties with great access on the block with minimum bids of $500. Each property was immediately sellable on the internet for $2,500 wholesale. As usual, I went in assuming I would buy nothing due to bidding competition.
I woke up the next day to what locals called the “Ice Storm of the Century” and assumed the auction was off. The auction hosting staff from Albuquerque were on a tight county to county schedule and chose not to reschedule, in part because I was present. By this time, we all got to know each other pretty-well and the State Department of Taxation had a single goal in mind for this auction (and all others); sell ALL the properties regardless of price. I had a reputation for buying everything that no one else was interested in owning.
I arrived and sat in the front row sipping coffee and waiting for the room to fill up. It never did.
A single person dressed like a 19th century rancher showed up and chose to sit immediately next to me over the 100+ other seats in the county auditorium in a show of local strength. We did not make eye contact or speak.
My policy has always been to respect the locals and make sure they get what they want in their own town over my personal financial gain, then take what’s left over.
I also have a policy to purchase the first property in every auction in a show of confidence.
Roy Sandoval’s gavel dropped (to this day he still holds auctions); I was respectfully silent, breaking my own rule. The Rancher was silent. 30 seconds went by. I bid $500. SOLD!.
Next property up, the rancher makes the bid. SOLD to the rancher. He and I purchased every single property in that auction taking turns.
In the end I purchase about 150-5 acre properties for about $75,000 cash and resold them in less than a month for well over $375,000 wholesale. It complemented our other inventory well to make that year-and epic land sales year.
These days we almost exclusively rely on sending blind offers to owners which has proven to remove the time and financial commitments of the old auction circuit days and yield predictable and consistent results.
But I still have a lot of stories from back then…
The following stories will be subsequent publications of this Blog or Newsletter.
2) 1,100 packaged up properties for $10K
3) 286 parcels adjacent to the Grand Canyon for $175 each
4) Limitless $75.00 Acquisitions in Urban New Mexico.
5) 12 Month Release Subdivision Yielding $1.1M in the end.