As mentioned in a previous post about defining criteria for Tax Deed Investing, it is important to closely examine all tax deed properties before purchasing.  If you haven't read the post about defining your tax deed criteria go back and check it out.  It will provide a foundation for this post.

An important step before buying any tax sale properties is personally examining the property. Here are a few things to consider when making your drive by/walk through:

• Neighborhood/Comps - as you arrive in the neighborhood examine the neighborhood.  What does it look like?  Are the homes in good condition?  Are there abandoned homes?  This is always important to know because it can affect your potential investment's value.
• Investment Itself - as you pull up to the tax deed property, examine its structure and appearance on the exterior.  What is the condition of the structure?  Will extensive repairs need to be done to the structure itself?  Also examine cosmetic components.  What does the paint look like?  Windows?  Garage door?  Yard?
• Photograph - take pictures of the neighborhood and the investment property.
• Notes - take notes of your observations on the neighborhood, tax sale property itself, cosmetics, structure considerations, etc.

We took a group of students on location in Texas a few months ago to study and examine potential investment opportunities.  We studied the list of tax deeds that were going to the tax deed sale and decided to take a closer look at a few of the properties from the list.  As we drove into the neighborhoods we talked about what we saw that was positive and negative.  We spent some time at the homes examining the government tax foreclosure properties and deciding whether or not each was a good investment.  We examined the properties estimating repair costs and the costs to improve the properties' curb appeal.  After examining these factors and considering the numbers we decided on a maximum bid for each tax deed.

Make sure to spend enough time at each property to know whether or not the investment is a good deal.  Don't force the deal if the numbers don't look great.

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