Buying Property Dirt Cheap Through Tax Liens | Meet The Investors S2: Ep. 2

TL;DR

Ned Carey shares insights on acquiring properties via tax liens and foreclosures.

Transcript

what's up bigger pockets alex felice here the host of the meet the investor series i'm back with another episode i'm in beautiful baltimore maryland i've never been here before i came out to meet the legendary bigger pockets member ned carey [Applause] today we're going to go through this uh very nice house everybody on bigger pockets has a differe... Read More

Key Insights

• Ned Carey specializes in tax liens, buying them at auctions and occasionally foreclosing to acquire properties, which serves as his primary investment strategy.
• Tax liens offer the opportunity to earn high interest rates, up to 18% in Baltimore, if homeowners repay their taxes during the redemption period.
• Real estate investing is described as an 'ideal' investment due to its income, depreciation, equity build-up, amortization, and leverage benefits.
• BiggerPockets is a valuable community for real estate investors, offering forums and resources to learn and share knowledge about various strategies.
• Understanding three types of knowledge—strategies, deal evaluation, and market insight—is crucial for successful real estate investing.
• Ned emphasizes the importance of market knowledge, which helps investors understand buyer and tenant expectations, critical for making informed investment decisions.
• Ned's transition from a career in the bicycle sporting goods industry to real estate highlights the transformative potential of pursuing real estate investing.
• The video underlines the importance of overcoming naysayers and taking action to start investing in real estate, using BiggerPockets as a resource.

Questions & Answers

Q: What is Ned Carey's primary real estate investment strategy?

Ned Carey primarily invests in real estate through tax liens. He purchases tax liens at auctions, which gives him the right to collect taxes from homeowners. If the homeowners fail to pay their taxes, he can foreclose on the property. This strategy allows him to acquire properties at a discount and earn high interest rates.

Q: How does the tax lien process work in Baltimore?

In Baltimore, when homeowners fail to pay their property taxes, the government auctions off tax liens. Investors like Ned Carey purchase these liens, effectively becoming the tax collector. Homeowners have a redemption period to repay their taxes with interest, which can be as high as 18%. If they fail to pay, the investor can foreclose on the property.

Q: What are the benefits of real estate investing according to Ned Carey?

Ned Carey describes real estate investing as an 'ideal' investment due to several factors: income from rentals, tax benefits from depreciation, equity build-up as property values increase, amortization of mortgages over time, and leverage, which allows investors to use other people's money to purchase properties. These elements collectively make real estate a compelling investment choice.

Q: Why is BiggerPockets a valuable resource for real estate investors?

BiggerPockets is invaluable for real estate investors because it offers a community platform where investors can learn from each other. It provides forums, resources, and networking opportunities to share strategies, evaluate deals, and gain market insights. This community-driven approach helps investors gain the knowledge needed to succeed in real estate.

Q: What does Ned Carey identify as the three types of knowledge needed for real estate investing?

Ned Carey identifies three essential knowledge types for real estate investing: strategies, deal evaluation, and market insight. Strategies involve understanding different investment approaches, deal evaluation requires knowing how to assess the financial viability of a deal, and market insight involves understanding local market conditions and buyer expectations, crucial for informed decision-making.

Q: How did Ned Carey transition into real estate investing?

Ned Carey transitioned into real estate investing from a career in the bicycle sporting goods industry. He started by attending weekend courses and boot camps, eventually getting sold on a real estate course. His partner's success with rental properties also inspired him to pursue real estate, which he found to be his calling.

Q: What advice does Ned Carey give to new real estate investors?

Ned Carey advises new real estate investors not to be deterred by naysayers and to take action to start investing. He emphasizes the importance of gaining knowledge in strategies, deal evaluation, and market understanding. Carey also suggests using resources like BiggerPockets to learn and connect with other investors, highlighting the importance of community support.

Q: What lifestyle benefits does Ned Carey enjoy from real estate investing?

Ned Carey enjoys several lifestyle benefits from real estate investing, including flexibility and the ability to work on his terms. He mentions that although he still works, he can take his dog, Wonder, with him everywhere, even to title companies and settlements. This flexibility and autonomy are significant advantages of his career in real estate.

Summary & Key Takeaways

• Ned Carey, a seasoned real estate investor, shares his expertise in acquiring properties through tax liens and foreclosures, emphasizing the lucrative nature of this niche strategy. He describes tax liens as a way to earn high interest and potentially acquire properties at a discount.

• Carey highlights the benefits of real estate investing, such as income, tax advantages, and leverage, while stressing the importance of community platforms like BiggerPockets for learning and networking with other investors.

• He discusses the critical knowledge areas for successful investing, including strategy, deal evaluation, and market understanding, and encourages viewers to overcome fear and start investing, using his own journey as an example.