The Beginning - Tax Foreclosure Auctions

It's hard to be an exact beginning on this project. We started looking back in 2004 at property. We started attending tax foreclosure auctions on the first Tuesday morning of each month in downtown Houston, Harris County Texas. Our goal was to purchase a piece of property at a great price and sell it. Make a little profit, and repeat the process until we had enough money to purchase a piece of land to build a house.

At the time we were attending tax foreclosure auctions, the TV had infomercials about how to get rich in real estate. They suggested tax foreclosure auctions as a way of acquiring good deals. Something else going on at the time involved the Harris County Appraisal district appraising property very high to tax revenue purposes. The politicians were to afraid to vote a tax hike, so instead they instructed the appraisal district to keep raising the worth of the homes to bring in more tax revenues. Housing was also hot at the time. Taxes were going up at a steady rate of 10% per year.

The infomercial told everyone tax appraisals were always less than the market value. Plenty believed it. You could see the faces of the people bidding on those properties and bidding them up the appraised value. Many of these properties we had taken the time to visit and see. Sometimes a house valued at several thousand dollars was literally a spot cleared of the rumble that crumbled from a dilapidated shack. You could tell the seasoned investors as well. They were prepared and deliberate and didn't fall into those traps. Unfortunately most of the properties were bid up way above a bargain, and it turned out not to be something very valuable for us.

On the other hand, it got us in the habit of looking at property. Looking at the combined real estate listings online, and driving around with a key map comparing properties and prices. My wife was a workhorse at driving around scouting property during her lunch hour. She would then take me to see the more promising. It took months and months of this before we found what we wanted for what we could afford.