Seth: Hey everybody, how's it going? This is Seth and Jaren, and you're listening to the REtipster podcast.

So not long ago, I did a little experiment where I attended over a dozen different tax deed auctions in my home state. If you're not familiar with what a tax deed auction is, I'm going to link to a blog post in the show notes for this episode that explained everything you'll need to know about what these are and how they work and why some real estate investors are interested in these things. You can find the show notes at retipster.com/97 because this is episode 97. Again, that's retipster.com/97.

Now, I had heard about tax deed auctions for a lot of years, as sort of this back channel that real estate investors could use to find really good deals. However, I had also heard about how competitive they can be. And the whole issue with any kind of auction is that if you're the only person bidding on a property or the item being auctioned off if you're the only person who cares, then yeah, you can totally get great deals.

But as soon as you start introducing a bunch of other people into the equation who also want the same thing you're bidding on and they're willing to pay a higher and higher price, you can pretty quickly lose any potential for getting a good deal. And sometimes the price of the item can end up selling for far more than the thing is actually worth. It's almost like this psychological trap that people can fall into in some cases and really lose their shirt.

So anyway, I had toyed around with a couple of tax deed auctions several years ago, but it wasn't really taking them that seriously. And it wasn't until just a few months back when I really decided to give these things a good try, like attend a lot of them. I spent lots of time researching properties, coming up with the right bid amounts. And really, if there was any potential for finding something, I wanted to uncover that potential and see what was really available here.

And after spending a lot of hours picking out the properties that I wanted to bid on and assessing what I thought they were worth, I spent weeks participating in these auctions. And guess how many properties I walked away? Drum roll, please. Nothing, not a single property. It was a complete bust, a total waste of my time. I mean, I can definitely say I learned a lot on the process, but just monetarily speaking, there was no profitable activity here.

Obviously, I didn't have any luck, but I took special care to chronicle, everything that I went through and experienced and did lots of screenshot recordings of the live auction as I was doing them. And I published this in a four-part blog and video series. And again, I'll link to those in the show notes for this episode. Again, retipster.com/97. So, if you have any interest in seeing what that whole process looks like, be sure to check that out.

Now, seeing how I know of much better ways to find deals with direct mail, I was pretty much ready to swear off ever attending another tax deed auction again, because I mean, again, in my experience, it was just a total waste of time trying to find anything good there.

But after I posted these blog posts on retipster.com, I got an email from a reader named David Krulac. David was telling me that he has bought hundreds of properties at tax deed sales, and he's been buying for many years and he's still buying them now. And a little light bulb went off in my head and I realized, “Hey, this person clearly knows something that I don't know.”

So, since I wasn't able to bring the process full circle in the series of blog posts I put together, I wanted to get David on the podcast so we can attempt to close this loop and figure out, okay, if I wasn't able to find anything, what was I doing wrong? What should my expectations be at a tax deed sale? What properties should or shouldn't I be going after? And how great is this opportunity really? Is there something amazing hidden here, or is it really as hard as I think it is to find properties?

So, with that, let's dive into our conversation with David, and hopefully, he can peel back the onion a little bit and help me and help you and help us figure out how this really works and what we should be looking for and what we should and shouldn't expect at these kinds of tax deed auction. If you have any interest in this, or even if you haven't in the past, I think this is going to be worth your time. Hopefully, we'll walk away with a lot of new discoveries here. So, with that, let's jump into the conversation.

Hey, David, welcome to the show.

David Krulac: Thanks for inviting me. I really appreciate it. I've followed your work for many years, going back to BiggerPockets also.

Seth: That's great to hear. I appreciate you following along. So maybe in less than a minute, can you bring us up to speed on who is David Krulac? What's your story? How long have you been investing in real estate? And what would you say is your specialty if you had to pick one thing in the real estate realm?

David Krulac: I've been investing in real estate since 1975, and I've been buying at tax deed auction since 1986.

Jaren: That's longer than my wife has been alive. My wife was born in 1987. That means you are an expert. Expert of experts, for sure.

David Krulac: I don't say that I'm an expert. I just have longevity. I've bought and sold over 990 properties for my own inventory. I buy a lot of properties. I'm a ferocious buyer. One year when I still had a full-time non-real estate job I bought and sold 74 properties in a year. I like tax sales a lot. I've been doing tax sales for many years. I bought some properties at a tax sale this year. I go to tax sales in different areas, different counties. I do buy scattered lots at tax sales. I do buy larger tracks at tax sales. And I've also bought houses and other properties.

Seth: Yeah. This is part of why I wanted to talk to you, especially after seeing your emails to me and just explaining some of your experiences that you just mentioned here. So, when we talk about tax deed auctions, as I found in my one good shot that I gave it this past year, there's no guarantee that you're going to find any deals and there can be a ton of competition. And I just found it to be really hard. It was really hard to find any real opportunity that was a slam dunk, awesome deal. Maybe it was because of the types of properties I was going after, or because I was only trying to handpick the best properties I could find. So naturally, there's going to be more competition for those.

But when you go to these tax deed auctions, and when you succeed, what types of properties are you able to succeed with? Are certain ones easier to get than others? Or what are your thoughts on that?

David Krulac: I think there are fewer bidders for land, which you're very familiar with. And smaller properties, smaller land properties. There are several issues here that may not apply everywhere. The tax deed sales are different in every state. They have different rules. One of the rules in Pennsylvania is that there's no redemption period. So, in some other states, like West Virginia, which is a tax lien state, the redemption period is two years. So, if you buy the lien at the sale, you really have to wait for two years because the former owner may redeem the property.

Now you can shortcut that by contacting the former owner and getting a quitclaim deed from them for doing other procedures. But in Pennsylvania, there is no redemption. And that confuses a lot of people, particularly people who are out of state, where their state has redemption, they own property in Pennsylvania, they let it go to tax sale thinking there's going to be redemption period. Then there's not. 

We bought a property where an owner was from out of state that was 25 acres. And this owner thought that there was redemption. And I think he even talked to an attorney, but he talked to an attorney in his home state and not in Pennsylvania and he got the wrong advice. So, he didn't pay the taxes because he thought he had a redemption period in which to come back and pay the taxes. There was no redemption period. He was very upset, but it ended up that we prevailed and we kept the property.

Jaren: So, David, I wanted to jump in there and ask you kind of a very practical question, because when Seth was looking into this tax auction potential as a strategy for finding land deals, I was not doing as much research as he was, but I was definitely doing my fair share. And what I found was when it comes to areas that are in the path of growth, like my land business is based in Florida and kind of what I like to teach a lot of the coaching clients that we have at REtipster and stuff is to really focus on the path of growth. Look at metrics like job growth, population growth, those types of metrics. And whenever I would look at the auctions and the properties, even land properties in the counties in Florida that were heavily in the path of growth, there was no opportunity. The numbers just didn't make sense for what people were buying the properties for.

So, I wanted to ask you, is it more advantageous when you look at tax auctions as a potential for deals to be in an area that's not growing? Especially in the land context, should we be looking in undesirable counties, maybe the things that are like in a population decline or something in the middle? How do we actually find these deals?

David Krulac: I'm in the fastest growing county in Pennsylvania. We go to tax sale all the time. Not only in this county but other counties. I bought a lot this year at a tax sale where I paid less than $3,000 for a lot. And it's a buildable lot. It's in a subdivision. I was the only bidder. I got it at the minimum bid.

Seth: Maybe it's not so much about growth as it is about like you said, a rural versus a densely populated county. Or what does a good county look like for you, David? Where have you had the most success or not?

David Krulac: I'm not sure how you define a good county. Our county is a suburb of Harrisburg, which is the state capital. The largest employer obviously is the state government. The second-largest employer is the federal government. Both of those are not business cyclical. No, they don't have layoffs. They don't close factories and all that. They don't have factories. So, the employment situation here is very steady, very stable. And typically, the jobs are well-paying jobs. So, it's a very stable area and there's growth here. It's the fastest-growing county in the state. I think that makes it a good county. By the same token, a lot of other people realize what's going on here. And there's lots of competition.

One of the tax sales I went to this year, I had 8 or 10 properties that I was interested in. I ended up getting none of them because the bidding was too hot and heavy and the high bid was much higher than I was willing to pay. Now, some of the bids I thought were near market value. So, there were a lot of people there with a lot of money who are willing to spend a lot of money. And as a result, I didn't get anything at that specific sale, but I did get a house at another sale. I did get that lot at another sale. So, I went to all those sales and I did prevail.

Jaren: David, are there any huge differences in the results that you can get within one state or one county? Let's dive into the practical a little bit on what kind of spreads you can expect. Because I know at least from what I see with my limited experience with tax auctions is that I was seeing properties that I could buy and maybe have like a $3,000 spread after I sold it.

But what was hampering that from happening was the fact that I had to do a quiet title action and that quiet title action costs $3,500 to implement. So, what kind of results can you expect? I know it's hard to say what a good county is versus a bad county, but across state lines and across county lines, what are the major influxes of results in processes?

David Krulac: I think the general state of the economy has something to do with it. When the economy is really good, there's going to be more people bidding at the auction. When the economy is bad, I've been going to auctions all these years. I went to auctions in 2009, 2010. There were a lot fewer bidders. There was a lot less money. It was less competition. So, there wasn't as much competition for properties. It was easier to get better prices on the property. And I've bought property at the minimum price, which is hard to do because all you need is one other person that's interested in that property to bid you up.

The rules are difficult. First of all, I think the no-redemption is a big factor. States where there are redemptions, it's not like you bought it. It's sort of like you bought it. Maybe you'll get it. Maybe you won't get it. No redemption, I think is a key issue. Number two, they require a hundred percent payment that day, right there at the sale.

One of the sales that I went to, where I got the house, they want you to pay right away. They leave like 15 minutes after the sale, you have to have your full payment there, 15 minutes after the sale's over, or you lose the property. They don't accept cash, which I find very strange. I understand their reasoning for that, but they don't accept cash. They don't accept personal checks. They don't accept business checks.

The only things that they accept are cashier’s checks and certified checks. And you have to register three weeks in advance. They vet all the bidders. You're an ineligible bidder if you owe any real estate taxes, you owe any municipal liens for like sewer, trash, or water. If you owe any state liens, like you have a business and you haven’t paid all your business taxes, you're an ineligible buyer.

So, there are all these things that they go through to eliminate the buyers. If you come to the sale and you haven't registered, you can't bid. If you come to the sale and you want to pay in cash, they won't accept it. They negate your bid. So, there's a lot of restrictions there to get through the gate. The gatekeeper is very strict in letting you in.

I think that's an advantage to the bidders. I went to a tax sale one time and a friend of mine was there and he didn't realize that you had to preregister and there's only one property that he wanted and he had a personal interest in it. He knew the owner and he knew the circumstance. They wanted that property. Well, he couldn't bid on it. So, he came up to me and I ended up bidding on it for him. And after the sale and after we got the deed, I deeded it over to him. If I hadn't been there, he wouldn't have gotten the property.

Seth: I'm curious in how many different states and counties have you done this? And I know you mentioned Pennsylvania, West Virginia. Have you ever done any other places?

David Krulac: Onto Delaware, their tax sale is handled a lot differently. They do their tax sale in a mix with the mortgages and it's done by the sheriff. So, it's a sheriff sale for the taxes. That's totally different than in Pennsylvania. I've done research in some other states. I have researched Florida. I was interested in buying some property at tax sale in Florida, but I never ended up buying anything. And I've looked at a couple of other states. I'm primarily interested in tax deed only. I'm not really that fond of tax liens. Now that eliminates a lot of states like around here, West Virginia is a lien state. New Jersey is a lien state. I'm not going to West Virginia anymore. I'm not ever going to New Jersey. Ohio is a tax deed state, and it's run pretty similar to Pennsylvania and so is Virginia. So those are states that are similar in the way that they operate.

Seth: And I know something that I've found in Michigan anyway, is that a lot of these used to be handled like in-person, you had to show up physically. And just starting this year because of COVID it has to be online or it's not happening. Have you found that and do you think is that sort of the trend, the direction these things are going to be going in the years ahead?

David Krulac: One of the counties that I go to frequently did it online. The other counties didn't. The one where I didn't get anything, they held it in a parking garage, which was open.

Seth: And you're talking about this year in 2020?

David Krulac: This year, 2020, last year. The one where I got the house was held outside in a park. And the one where I got the lot, it was the weirdest of all. They have it indoors, but they didn't have it at the courthouse where they normally have it. They had it at some other auxiliary building and they would only let 10 people in the room at a time. So, the people that wanted the bid were waiting out in the hall. I think they had around 300 properties there on the sale list.

They came out and they said, “Okay, we're going to auction off the first 10 properties on the list. Is there anybody here that wants to bid on those?” And they would let the first 10 into the room. Well, if you were like the 11th person and you wanted to bid on the one that probably is the first 10, you weren't allowed in the room, you couldn't bid. And so then after the first 10 properties were bid on, they let those people out of the room and they go, “Is there anybody here that wants to bid on a property is 11 through 20?” And then those people went into the room.

Well, fortunately, I was able to get in the room when the property I wanted, there's only one property I really wanted. When that came up, I was fortunate enough to get into the room and nobody else bid on it and I got the property. So, it was kind of weird. And it was sort of truncated because it eliminated a lot of bidders. If there were a lot of bidders that were interested in one property, you could only have a maximum of nine other bidders there at the same time. And they didn't take phone bids and they didn't take online bids and everything else.

Seth: It almost seems like, from the county standpoint, it seems it would be in their best interest to get this online because it's easier to get more people involved. Like, I don't know why they wouldn't do that.

David Krulac: You're thinking it from a logical perspective and that's not the way they operate. Some of the counties that I go to, don’t have assessment data online, let alone have bidding online. And the smaller the county, the more rural the county is, the less likelihood that they're going to be more sophisticated technology-wise. I've gone to counties where there were only eight properties on the tax sale list. They're not going to automate that. It's too costly for them and they don't want to be bothered. So, they just do it the same way they've always done it. And they don't even do assessment data online. So, you can't get assessment data without going to the courthouse or paying for a service that has access.

Seth: Yeah. In my experience, as a land investor where we've sent out direct mail and find people that way…

David Krulac: We do that too.

Seth: Yeah. It's not uncommon to get properties that you can buy for like 10% to 30% of their market value. And that's kind of the frame of reference that I had when I was going into these tax deed auctions and found it to be, I mean, I didn't find anything like that. And I'm just wondering, is it crazy for me to expect that? Should I expect to pay more like half of market value? Have you been able to get deals that good or are you barking up the wrong tree, if that's what you're expecting from this kind of auction?

David Krulac: My maximum is 50%. I won't buy a property at a tax sale for more than 50% unless it was some really extraordinary property and highly valuable. Let me give you a couple of examples. There was a house that was in a development that had a lake. The seller had paid $180,000, three years earlier, cash. And this was a sale where all the liens transferred. So, you needed to do a title search, which I did. And I couldn't find a mortgage, a lien, a judgment, or anything. There was nothing on this property. I don't know exactly what's going on with the seller, the seller was from out of state, but for some reason, the seller didn't want to be located. He had called into the tax office and they talked to him and he knew that there was going to be a tax sale and he was going to lose this property that he paid $180,000 cash for three years earlier. He wouldn't give the tax office his address. I have no idea. It's illogical, but there's a lot of illogical things going on. So, I went to the tax sale. There was somebody else that was bidding on the property, but they dropped that after having a couple of bids. I ended up getting the property for $6,500 and it's sold three years earlier for $180,000. The spread there between $6,000 and $180,000 is huge.

Seth: For sure. So, it sounds like there's definitely an opportunity there. It's just about… Is it luck, do you think to some extent?

David Krulac: You got to know where to look. It's not just luck. That didn't fall into my lap. No, I did title searches on properties that I was interested in bidding on because, at this particular sale, all the mortgages and liens transferred. So, you need to do a title search, which is another limiting factor for bidders, because a lot of bidders don't know how to do a title search, or don't want to pay to do a title search. And it's very understandable that they wouldn't want to pay to do this. One of the counties that I go to the list is 3,000 properties, 30 days before the sale. In the 30 days between when it's advertised and when the sale happens, 90% of those properties are taken off the list. People pay them or they enter stay agreements to make partial payments, or they declare bankruptcy. Something happens and that property is no longer on sale. So, you go from a list of 3,000 to only 300 being sold. Well, you can't possibly do title searches on a bunch of properties because there is probably a 90% chance they're not going to come to sale.

Seth: Yeah. So, how do you know where to start? What do you not waste your time on?

David Krulac: I try to look for properties that give me an edge, which are the properties that have a higher percentage of going to sale. Out of state, out of county, long-time owner.

Seth: How would you know that without doing a title search on all of that?

David Krulac: Sometimes the unit owner says “The estate of John Smith.” Obviously, John Smith is not with us any longer. Or if it says “John Smith owner” and then underneath it, it says “Heirs of,” or something else like that, you know that it's a probate situation probably. And you can check probate to see if a will has been filed. So those are things that I look for. One of the other things that I look for that I don't think anybody else looks for is I look for dollar deeds.

Seth: Like a $1 transfer price?

David Krulac: $1 transfer price, which means it's a family or it's a spouse. Lots of times, there's a dollar deed if there's a divorce or parent giving a property to a child. Well, one of the things that I've gained from my experience is a lot of these properties that end up going to sale, more than the 10% that you would think based on the overall figures, it's where the people got the property for free. Your father gives you the property for free. Well, you got it for free. You don't have any money in it. You don't really care as much about it as if you put up the money yourself and bought the property. So, you're more likely to give the property up because you didn't put anything in it. You don't have any skin in the game.

Seth: When we're talking about dollar deed transfers or out-of-state, out-of-county owners, is this just displayed on the original list that you download, or do you have to go into each individual one, unlike some property data service, and verify this stuff first? I know it's not like a full-blown title search, but how far are you going?

David Krulac: The list shows the owner's name and it shows their address and it shows the property address, but also shows their mailing address. So, if their mailing address is different than the property address, it's obviously not owner-occupied. And if it's vacant land, it's obviously not owner-occupied and they couldn't have that as an address.

Seth: And this is the list you're getting from the county of the upcoming auctions?

David Krulac: Right.

Seth: Okay. Because in the one that I got from Michigan, they didn't have all this information.

David Krulac: If it doesn’t have the dollar deeds on it, it doesn't have the last deed. I have to do additional research to do that, but it does have the owner's name and it has their mailing address, and has the property address and it has the property number and the amount of taxes that are owed.

Seth: And maybe it works differently because in Michigan, for example, the owner is the county. There is no way to see who this other person is. It's like, no, the county owns it. They're auctioning them off. So, does it work differently in Pennsylvania?

David Krulac: They are not owned by the county or the state. They're auctioning it off as if they're the trustee. So, it would be in John Smith's name. Like the deed will say, no, the county is selling this property as the trustee, which is how they have awarded it here. So, the owner's name is on there. You'd have to do additional research to find out what the sale price was when they bought it and how long ago they bought it.

Seth: And I guess this is also predicated on being in a disclosure state where you can actually see the transfer prices. Because in some states, you literally can't see that. It's against the law.

David Krulac: Yeah. And some people don't put the proper price. Like some people put dollar deeds all the time. The state is only concerned about you paying transfer tax. So, you can put a dollar on your deed as consideration, as long as you pay the full transfer tax for what the real price is. So, they allow you to do that. So, there are some dollar deeds like that, that aren't really gift-type deeds, but people are just trying to obscure the purchase.

Seth: It was interesting, earlier you mentioned that there was an auction to where the mortgage and other liens came with the title. And I always thought that all that stuff was wiped off. I know in Michigan it explicitly says that.

David Krulac: In Pennsylvania, there are two different kinds of sales. The first sale, all the liens transfer. That means that it's a lot easier and quicker for the counties to do that because they don't do title searches. They don't care who the lien holders are because all the lien holders transfer with the purchase. Properties that go through the first sale and nobody buys them.

A lot of them aren't bought because there is a mortgage against them. Then that goes to another sale, usually about a year later. And that's called a judicial sale and that's gone through the court. They have to do a title search on each one of those. They have to go before a judge and they say, “No, we want to wipe out all these mortgages and liens.” They have to send notice to all the lien holders and mortgages saying, we're going to wipe you out unless you do something, we're going to sell it on this such and such a date. So, they have to get noticed. If they don't get noticed, their lien is not wiped out.

So, one of the things you have to do on the second sale is you have to try to figure out if a person has got their notice or not. Because if they hadn't gotten noticed, the mortgage still isn't wiped out, even though they would typically be wiped out at that sale.

Seth: And that's where a quiet title action would come into play, right? Have you done that with many of these properties you've bought?

David Krulac: We've done quiet title actions.

Seth: Is that like a standard thing you should plan on doing? Or that's if you're not able to verify any other way?

David Krulac: We don’t do a quiet title action as a substitute for doing a title search. We do a title search across the board. I can only think of two where we ended up naming the lien holder in the quiet title action. Usually, when we do a quiet title action, we're only naming the former owner to clear their interest in the property, but the properties are free and clear otherwise. But we use the quiet title action to clear their property.

There's an alternative way of clearing the cloud on the title and that would be to get a quitclaim deed from the former owner. But sometimes that's hard to do if they're deceased or they're out of state or they've already passed and there are multiple heirs. We had a property we bought at a tax sale that was two houses on one property. There were six heirs and they weren't amenable to each other. They wouldn't sign the same deed, the six heirs. So, we had to draw different deeds so each one of the six heirs could sign a deed so that we could clear the title.

Seth: And that's one of the odd things that I've encountered time and time again whenever there is a tax deed sale in the history of a property that I'm buying. It's weird because, on one hand, it's supposed to wipe everything out, but it actually creates a problem because of the fact that it's so hard to verify that everybody else was notified of the tax sale. So, it actually creates like a cloud on title, unless you're able to somehow verify that. And I'm not even really sure how you would do that because you'd have to somehow track what the county or the state sent to those lien holders. But it's basically just like plan on there being an issue that you have to clear up somehow.

David Krulac: I keep a file on each property.

Seth: Oh, really?

David Krulac: In Pennsylvania, at least, they're supposed to post the property. Physically post the property. Notice on the front door or something. It has to be advertised in the newspaper and they have to send notice to the owner and you have to have all three notices. If you don't have all three notices, it's insufficient notice. When they send certified mail, the county gets back the green card with the person's signature saying that they received it. So, they put that in the file. So, you have access to that, you can look at the file. And in some of the counties, they don't let individuals look at it, but they'll let an attorney look at it. So, there are different things for that. But you can find that if they have proper notice if they have a green card.

Seth: It's funny that requirement about the newspaper. Because I know a lot of newspapers are going under.

David Krulac: It's an archaic rule.

Seth: I don't know. Maybe that's just typical county mentality for you. It got to change with the times.

David Krulac: It's a rule that goes back decades and decades when newspapers were much more prevalent. And that was the way of getting news.

Jaren: So, David, I want to circle back to the question that Seth asked about different states and different counties. Because if I were to put myself in the mindset of somebody who just wanted to get started, who has never bought from a county auction before, what was your motive thinking to choose the states that you did? Was it just because you live in Pennsylvania and you have adjacent states and it just kind of led that way? Or is there some kind of criteria that you use to pick specific states and specific counties?

David Krulac: I started in Pennsylvania because I lived in Pennsylvania. It's a lot easier. And back when I started things weren't online. So, it wasn't accessible online. You had to go to the courthouse to look at the assessment data. You had to go to the courthouse to look at deeds and mortgages and judgments and all that sort of stuff.

Jaren: So, are there any particular counties or property types that will have lower competition or is there any kind of mode of logic to guests and kind of gauge where you're going to have a favorable opportunity doing county auctions in a particular area?

David Krulac: I think the economies that are more rural and have less on the list. Like the county that only had eight properties on the list. There are not very many people that are going to go there. It's not going to be worth their time to go there and bid. So those counties that are more rural. Like, say 50 miles outside of the city. Once you get past there, there are a lot more rural properties, smaller economies, smaller populations.

Also, property type. I think land is much more overlooked than houses at tax sales. People don't know what to do with land. And we've talked a little bit about title issues on property, but another issue with land is perking. If it doesn't perk, it's unbuildable. What's it worth? Can you get it to perk? You kind of have to have a grasp on that situation too. Or if you buy a property that doesn't perk, then it's unbuildable. Then the value is much lower than a property that does perk.

Jaren: So, do you feel like the lot that you gave as an example earlier that you bought in the fastest growing county in Pennsylvania was more of an outlier? And if I were a beginner, it would be more advantageous for me to specifically target rural counties as getting a starting point.

David Krulac: I think that would be one path. There are multiple paths there, but I think that land is something that's less competition than houses. So, if that is what was your goal to be in less competition, that would be something that you consider. But when I started, I think one of the mistakes that I made was only looking at low-valued properties, ones that had low bids. Because some of those were good properties, but some of them were awful properties. They were terrible properties and they rightly so had a low bid because they weren't worth anything.

Now, you have to be really careful not to just buy low properties because you find junk that's unbuildable and there's nothing that you can do with it. So, you've got to be careful that way. The price isn't the determining factor. The value is the determining factor, not the price.

Seth: Actually, one of the questions on our list was about that. You sort of just nailed it. A lot of times the reason properties are going up for auction is because they're junk. They're not useful. Like nobody wants them for a good reason. But sometimes it's almost like there's value there, but the average person hasn't seen it because they don't understand what it could be used for or how it could be repurposed. Do you have any cool stories of hidden potential where you were able to see value that nobody else recognized?

David Krulac: I've bought a lot of properties that had title issues. I have bought properties that are landlocked, which is an issue. And I've bought a lot of properties that had perk issues. I got a license to do perc test, not because I wanted to do perc test on other people's property or work in that profession. I got the license in order to take the courses to know what park testing was all about, how it's run, what are favorable factors, what are unfavorable factors.

At one point I had my office collocated in an attorney's office and they did almost exclusively real estate. They had five title abstracters on staff and they covered multiple counties. I asked the owner of the firm, I said, “Would it be okay if I went out with your title abstracters and learn how to do title searches?” And he said, “Sure.” So, I went out with multiple title searchers to multiple counties and watched them do title search, ask them questions, all that stuff. This was before things were online. So, you had to physically go to the courthouse.

So, I learned how to do title searching. It became an auxiliary knowledge that helped me invest. Before 9/11 in one of the courthouses they would close the doors and lock the outside doors to the courthouse at 04:30. But if you were inside the courthouse, they would let you stay as long as you wanted. But as soon as you left, you couldn't come back in and they had a guard at the door. We worked on tax sales. So, I had a partner plus we hired two abstracters to work with us on an hourly basis. So, all four of us were there doing title search. And we were the only ones in the deed office doing title searches. Sometimes we were there past midnight. We were there before 04:30 in the afternoon, and we worked as long as we could work that night and maybe come back the next day and work again. We had exhaustive, extensive title research, more I think, than anybody else that went to tax sale.

Seth: You mentioned title issues can be one opportunity. You also mentioned like perc tests and landlocked properties. So, have you been able to buy properties with perc test issues and somehow fix that or same thing with being landlocked and how were they able to fix that stuff? Because I know that's a pretty common thing for land investors, where you have properties with these problems and you can either do nothing and hope to make money or you can fix it and make a lot more money. So, how did you fix those things?

David Krulac: In one area we bought 117 lots. The number one source of buying those lots was tax sale. We also did some letter solicitation and there were a couple of lots that we got through the list. We bought lots as low as $50. One of the examples that we had there was I bought one lot for $1,000 and I bought the lot next to it for $500. I combined them into one lot and did a perc test. Neither lot had ever been parked. So, I had $1,500 invested in this plus a perc test. I sold the lot for $80,000.

Seth: Oh, man.

David Krulac: So big spread. The big difference was perc test. And there are lots of factors in the perc test. There are things I can see by not even getting out of the car that are factors in the perc test. Like, is it wetlands?

Seth: Is it underwater?

David Krulac: Is it a flood zone? Is it steep? And here you can't get a sand mound except experimental over 12% slope. Well, if it's a steep lot, you're not going to be able to get a perc test on it. If it has rock outcrops on it, you probably are not going to be able to get a perc test on it. So, you can see those things. So, you eliminate all of those. And in this particular area, they were failing a lot of tests. Now it wasn't all their fault while they were failing the test. There were other factors in there. The lots were only half acre. So, there's a limited amount of space to move, to get a well on a septic on a half-acre lot, they have to be a hundred feet apart. Now, your septic has to be a hundred feet from everybody else's too. So, you got to have those considerations. You can have a lot that's going to perk, but then you violate the isolation distance and you can't build on it anyway. So, you've got to check all of that.

But these lots were all wooded and there would be lots and lots in a row that were all undeveloped. Well, you couldn't tell exactly where the corners were. So, to be safe when the municipality had a perk for the landowner, they'd go to the middle of the lot and they'd go to the front of the lot and they would do a perc test there. Well, that's not necessarily the most advantageous place to do it. And if it failed, you had a failing perc test.

What we would do is we would locate the corners. All the corners had been there when they did the subdivision, they put no rebar or pipe in every one of the corners. I bought a metal detector and I was able to locate like 99% of the corners, even though if they were buried underground. So, we located the corners front and rear. We were able to move around the lot, get the best place to do the perc test. And so, we were able to re-perk something that already failed and get it to pass and increase the value of the property at least 10 times, maybe 20 times.

Seth: Yeah, that’s a big win.

Jaren: It sounds like what you want to do with a lot of these properties is looking for opportunities where you can improve land slightly in some capacity. Whether it's getting easement access or perking it, or what have you. So that's a really interesting insight there. If I'm doing everything right, I want to know when it comes to doing title searches, if I'm doing the due diligence and going about it, the exact perfect way to buy from county auctions, what's my normal success rate if I want to be the winning bidder? Am I looking for one 1 of 10 bids, one 1 of 100 bids?

David Krulac: That's a really hard question to answer. I'm not sure how you are using the term success rate. The tax sale that I went to, where I got the house, that was the only property I was interested in. The one that I got the lot, that was the only one that I was interested that was on the list.

Seth: I think the nature of the question is, say if you find 10 properties and you decided these are all worth going after and I'm going to try to do it. And you do that. What percentage of those would you end up winning? Is it 1 out of 10, or 1 out of 5, or 1 to 1?

David Krulac: Well, that's still difficult to answer because if you're willing to pay any price, you can be the high bidder. That's not the point. The point is being the high bidder at a reasonable margin.

Seth: Yeah. The assumption is sort of built into that. So, I probably should have specified, but the assumption is that it is a good deal 50% of market value or less.

David Krulac: I went to a sale where there were 300 properties being sold and there were 300 people in the room. We bought eight properties. I considered that to be a success because there was a couple of hundred people there that went home with nothing. Success for me was when I walked home with eight. If you figure it out mathematically, there's 300 people, there's 300 properties. Everybody should have got one property and everybody would have been happy. Well, I got eight. That means seven other people didn't get a property as the way I figured it out. So, I was successful and they were not.

Jaren: It sounds like to me, that it depends on really what's available. Like what are the properties that are going up to auction and that coupled with what your unique investment strategy is in your unique circumstances of what you value in a property. There's no real rule of thumb that you can give us of a deal ratio to bid ratio.

David Krulac: No, one of the things I talked about earlier is that the ones that are paid off last year, 2019, I went to a sale where 750 properties were paid off the last day. So, the day before the sale, they were on the list. I went to the sale and they were gone. They weren't on the list. 750 properties. Well, there were properties on those 750 that I would have liked to buy. I wasn't given an opportunity to buy. I couldn't have gotten, but I still got some properties. I think all the tax sales I go to, there's always properties I'm interested in buying and I almost always get something. And I'm usually happy with what I get.

Seth: When I look at it, maybe I'm just thinking more about my own experience, where I spent quite a bit of time getting confident about the properties I was going to go after and getting confident about what my maximum bid amount was going to be. And then it all just fell apart. It was a total waste and it's hard for me to get excited about going back and doing that. And I think about how much time should one spend per property, especially in that case you just mentioned, where 750 of them just came off the list. What if you were going to go after a bunch of those? That's a huge kick in the gut I would say.

David Krulac: It's not so much they dropped off, it's that they dropped off the day before. So, some people waited. They had 30 days to pay. They waited until the 29th day to pay. And I've seen at some of the sales where they allow people to come and pay their taxes while the sale is going on, which is absurd. Well, what if they got a flat tire on the way to the courthouse and they didn't get it in time before the property was sold, that they only accept payment if they haven't got to your property on the list yet? Well, why would they want to wait till the day of the sale to pay their taxes when they had two and a half years to really pay their taxes?

Seth: Yeah. It almost sort of sounds like a little bit of a gamble in a way, in terms of how much time do you decide to put into each one. Because you just don't know. You can make educated decisions, but at the end of the day, you just have to spend time that's going to get wasted because it's not going to materialize in anything.

David Krulac: I have three rules that I follow. One is I want to know the rules at that specific sale. Even in the same state, different counties operate differently. They have different rules, like that pre-registration. If you weren't aware of that, there are some counties that don't have pre-registration. Some of them do. Well, if you're not aware of that and you come to the sale and you're not pre-registered, you can't bid. So, you want to know what the specific rules are of that sale that you're going to. And that can vary from county to county within the same state.

Secondly, I want to do due diligence. I want to do title searches. Sometimes I'll call a code enforcement officer to see if there are any code violations. I'll try to look for a bunch of different things. And I'll also look to see if there's something that can be done with the property that's not being done with it now.

And the third thing is I have to physically see it. I don't rely on Google Earth. Some of those photos on Google Earth are years old. I went to a tax sale one time and there was a farm. The farm house had burned down like three days before the tax sale. There were people bidding on the farm feverously who obviously didn't know about the fire and didn't know that the house had burned down. It was ashes. It was totally burned down. There was nothing there. So, you need to be physically going to see the properties because online stuff is not always accurate or up-to-date.

Seth: That kind of sounds enormously time-consuming. If you have to visit everyone, knowing that many of them will not work out.

David Krulac: I try to push my visits to the end of the work process. So, when I started, I would go out the day before and there were so many that ended up going. It was after dark. Well, you can’t see the properties after dark. There was one time where I worked through the night, all night, like doing it all night, like cramming for a test to look at properties, and then went to the sale. Well, it was counterproductive in my opinion. So, I try to look towards the end of the sale, but I like to look in daylight.

And one of the things I do is I get an updated list the day before the sale. So, all the ones that have been eliminated before that are no longer on the list. And then I'll go out and look at properties. Sometimes I'll look at properties earlier if they're particularly interesting. Sometimes they were on the sale list before, I looked at them before. If it's a vacant lot, I may not even go look at it, or I may just drive by. So, I can do those kinds of things too. But I leave the physical looking to the end. I do the assessment research. I do the title research. I do all that stuff first to eliminate properties so that the ones I have to physically visit is a much smaller list.

Seth: Yeah. And I know you sort of mentioned a few deals in the past in terms of like what your profit margin was and that kind of thing. Do those rank among the best deals you've ever done? I'm trying to get a feel for what could one expect from a typical deal like this? How much could a person make on just an average run-of-the-mill property? And then what's like just a home run, like unusually huge, awesome or easy deal?

David Krulac: We had mentioned before how at a tax sale, there seem to be some weird things that happen and unusual situations. So, there's a lot of that going on at tax sales. So, we bought a property at a tax sale that was a house and the owner had passed away and he left the property to his granddaughter who was a minor. Well, an aunt lived in the house and was the guardian of the minor. And the deceased person had left the aunt like $50,000 in cash. It was supposed to be for the care of the minor, who was inheriting the property. Well, the aunt just spent it on herself, pizza and beer, things like that, and didn't pay the taxes. And there was no mortgage on the property. There was no liens or judgments on the property, but she wasn't going to inherit the property. The niece was going to inherit the property. And the aunt could have saved it from a tax sale by just paying the taxes. She could have lived there forever probably if she had just paid the taxes.

But for some reason, she didn't pay the taxes. It went to tax sale. We bought the property. We paid $58,000 for the house. The taxes on it were only like $8,000. So, we paid $50,000 more than what the taxes were owed on the property. It was a verbal auction. There were other people bidding. We got the property for $58,000. Well, when we found out all the circumstances about the niece and her not getting money, we approached the judge and he called the aunt into his chambers. And he scolded her, told her what she did was illegal. That if he ever saw her again in his court, he would throw the book at her. There was $50,000 extra on our bid. We made sure that that went to the niece. We got an attorney involved. We got this judge. And so, the niece ended up getting $50,000 out of the sale of the house. 

We hired two guys to de-trash the house. We got a dumpster. Two guys went in, they worked like a week cleaning all the trash out of this house and putting in a dumpster. People would come by. This was on a semi-main street. People would come by and stop and talk to these two guys who were working for us and say, “Well, what are you guys going to do with this house?” And they said, “Well, we don't know. We're not the owners. We're just cleaning it up.” They would give them my phone number. Somebody called me and wanted to see the house and possibly buy it. So, we showed it to him. It was a contractor who was looking for winter work for his crew so he didn't have to lay off his crew over the winter. And we sold it to him for $98,000. So, we made $40,000. The only thing we did was de-trash it. We didn't clean it. We didn't paint it. We did nothing to it, except that, and we make $40,000.

That's in the typical, maybe high typical range, but there are other properties that were home run. I bought a house at a tax sale that was only 12 years old. It had four bedrooms, three full baths, two car garages on two acres on a cul-de-sac. I got it for $30,000. There was a title issue on the property. The house is worth $360,000. The first people I rented it to paid $2,050. I've considered that a home run.

Seth: It sounds like it to me. How often do those come up? Is that like once in a decade kind of thing?

David Krulac: There's a lot of uniqueness and strange happenings that happened at tax sale, which happened at this property. They're rare. And you've got to kind of pick through it. It is sort of like a needle in a haystack to find something that's going to be like that. Another property that I bought at tax sale was 15 acres. You had mentioned about people intentionally abandoned the property. These people intentionally abandoned this property. It was 15 acres of woods, no buildings. The last deeded owner died in 1910.

Seth: It's a long time ago.

David Krulac: He died in 1910. The deed was still in his name. When he died in 1910, the best that we can figure out is he was not married and he didn't have any children. He informally gave it to his girlfriend, but there was never any deed transfer. There was never any wheel probated. There was no court action. There was nothing. He just said, “After I'm gone, you take care of this”. So, she did. She paid the taxes and she died. And she informally gave it to her son. He paid the taxes. Then he died. And there were two sons that were left and they paid the taxes. Somebody approached them by buying this property and doing a small subdivision. And as their preliminary work, they did a survey of the perimeter.

They did a preliminary title search. The buyer's attorney came back to the buyer and said, “Well, you can't buy this property. These guys that are selling it to you, they don't own it.” Which they didn't. The guy that owns it died in 1910. They're not related to him by blood or marriage. There's no deed to them. There is no deed to their father, there is no deed to their grandmother who was the girlfriend. There's no deed. Well, these two guys said, “Well, that's not possible. We've been paying the taxes on this for 85 years.”

So, they went to their attorney and their attorney did a title search. And he came back to the sellers and he said, “Yeah, those guys are right. They want to buy your property but you don't own it. There's nothing you can do.” So, they stopped paying the taxes.

So, I went to tax sale. I knew the surveyor who had surveyed the property. So, I had some inside information. Nobody else bid on it. I got it for the minimum bid of $4,500. I did a subdivision on the property. The property is worth $500,000. And the two attorneys said, there's nothing you can do. Well, the brothers could have done the same thing I did. They could have gone to tax sale. At a tax sale, you're not allowed to bid on your own property, but it wasn't their property. That was the point. They could have gone to tax sale and they could have bid on it and they could have done the same thing that I did. But two attorneys said, “Oh no, there's nothing you can do.” 

Seth: I wonder why you can't bid on your own property. I mean, that makes no sense anyway, but why would that be a rule?

David Krulac: Well, it started in Pennsylvania that it was at the second sale where it wipes out the mortgages and the taxes. So, you could benefit yourself by letting your property taxes go. It goes to tax sale and then it wipes out your mortgage. Years later, they further enhanced that law that you weren't even allowed to bid on the sale, where the mortgage is transferred. And I think the logic there was, if you're not paying your taxes, you shouldn't be eligible to bid on any tax sale.

Seth: That makes sense.

David Krulac: So, there are examples of two home runs that we've done.

Seth: Yeah. That's all really helpful. Totally great deals. So, as we kind of wrap this up, we've established that you've been doing this for a long time. You've been through a lot of deals. You've seen the world change as this process has continued to evolve and the markets have changed. What are some of the biggest, most important lessons you've learned from all of this? If you were to give advice to somebody relatively short to the point advice, what comes to mind? For somebody who wants to get into this and doesn't have the knowledge that you do have.

David Krulac: I think you start small. The first tax sale I went to in 1986, there were 30 properties on the list. I probably looked at 10. I think I bid on 2. I got 1. It was a pretty good deal. I bought two acres for $1,600. It was landlocked, but it was only one property between me and the road. I introduced myself to the property owner. He said he was having his property log. And he said, “There are some big trees on your property. You should talk to the logger.”

So, I did talk to his logger and the logger came and looked at my two acres. And he said that he'd be willing to cut some of the trees on my property. Typically, loggers, don't like to do small tracks. They like 5-to-10-acre tracks because they have to move in the equipment. There's overhead.

Since he was doing my neighbor's logging, he said, he'd be willing to do mine. He paid me $3,000 for the trees that he took. 30 trees, but 10 trees, an acre he took. He paid me $3,000 in cash. Well, that was more than I paid for the land. I had to buy it right away, but I ended up selling the land for $80,000.

Seth: Oh, man.

David Krulac: That was the first deal I did. So, you do a deal like that, even though I only got one property and even though it was only $1,600 property, and even though it was landlocked and it wasn't perked, I started small and I could see that I could build on that and I can make this property much more valuable.

Seth: So, it almost sounds like you want to look for the problem properties and try to find the opportunity that most people don't see.

David Krulac: If you can solve a problem, you can increase the value of what the property is. We did perc tests on some of the landlord properties. We got right away on some of the other properties that were landlocked. We sold it to a joiner and we didn't have to get it right away. So, there were a lot of different things that we did, and we were able to do that. Most people don't want to deal with landlocked property. They think it's too much of a hassle.

Seth: Well, David, I want to thank you for spending your time with this. You helped us figure out a lot of the mysteries here and answered a lot of questions. And I feel like if I ever did want to pursue this again, I could be a lot smarter about it and maybe just have better expectations about what is and isn't available here. So, thanks for spending your time with us, letting us know how this works from your experience.

If people want to find out more about you or connect with you or ask questions or anything like that, you don't have to share anything, but if you want to, you're more than welcome to.

David Krulac: I'm on BiggerPockets. I posted there over 3,000 times. I did a BiggerBockets podcast, number 82, I'm also on LinkedIn. So, there are lots of ways that you can get in touch with me. I am a broker in Pennsylvania. I have my own real estate office here, and we do a lot of real estate business with investors.

Seth: Do you have a profile on the REtipster forum yet?

David Krulac: I don't.

Seth: You're more than welcome to sign up. And if he does listen, I'll link to his REtipster profile in the show notes as well. In the meantime, I'll have his BP profile link and that episode he was on with BiggerPockets and links to a lot of other stuff we talked about throughout this conversation.

David Krulac: Thank you very much. I appreciate the invitation.

Seth: So, there you have it, folks, that was our conversation with Mr. David Krulac, who was able to shed some light on a lot of things regarding tax deed auctions. It’s kind of interesting. I felt like it definitely helped. There were still some answers that I feel like I still don't have, but maybe it's because the answers just aren't there. Like it's just a complicated thing and there is no perfect ratio that you can always expect of a success rate and that kind of thing. I can see what he was saying. There are lots of factors to consider at a tax deed auction like that.

Jaren: Yeah. I think if I were to ever explore Florida again, I would probably just do any in every county that I had the opportunity to get the data for and had enough time to process through. Because it really just feels like deals are going to be everywhere and you just have to find the needle in the haystack and just be willing to find the needle in the haystack. And I think that's a competitive advantage, but also the Achilles’ heel of this as an acquisition strategy is that you don't have any direct mail costs and very little overhead, but it's super time-intensive and super data-oriented. And not my personality. I'd much rather spend thousands of dollars in direct mail and talk to people on the phone because I think I would hate my life if I did county auctions full-time.

Seth: Yeah. I almost wonder if it's one of those Hunter versus Farmer mentalities where the Hunter is more after the direct mail stuff. And the Farmer is more after… I don't know, maybe that's not accurate. But I do remember when I was trying to do this, that was the one thing that I really loved about it right out of the gate was not spending money on direct mail, not talking with motivated sellers. It was all laid out pretty clearly. Like these are the properties that you have a shot at, go for it.

Obviously, the end results didn't help me all that much, but it was just nice not having that kind of ambiguity of “What will happen when I send this mail out and what might come of this?” So just different advantages and drawbacks to it.

Jaren: Yeah, for sure.

Seth: I think it is kind of like with anything where you can probably do really well at it if you become a specialist at it. If you choose to really focus all your time and energy and effort on that, most of your time and energy. But for somebody like myself, who's kind of gave it one good shot and obviously, I didn't spend all of my time and energy on it and I probably won't, I'm probably never going to see anything awesome from that. So, you just have to pick your battles, I think.

Jaren: Yeah. I might give it another go around sometime in the future. The biggest takeaway for me from the conversation is that I should not be picky about the counties at all. I should almost arbitrarily just pick whoever I feel is best and just hope that there's an opportunity there. And then if there's not, just go to a different county. And keep that kind of mindset and just go county by county until you find something. Because it almost feels like you have to have that approach every year because there might not be anything at this particular county's auction this year, but next year it could be a totally different story. That's what it feels like.

Seth: It’s interesting that your takeaway, that it's just kind of arbitrary, like you don't think the county matters at all.

Jaren: Yeah. I mean, compared to how I normally approach my direct mail, I'm very strict about county data. I don't necessarily look for the highest metrics for growth data, but I find that at least in Florida and in my land business, it's really helpful to be in an area that has high demand and just makes things sell faster. With my strategy of using agents to sell property, it's easier to find a good quality agent and so on and so forth.

Seth: Wouldn't that still apply though, in this situation? I mean, if the main concern is getting the things sold quickly and easily, it seems like those same rules would still be worth looking into.

Jaren: I guess so, but maybe, I don't know. It felt like when I did it in those counties, there just wasn't an opportunity at all. Like he was saying that he only offers 50 cents on the dollar. There was no way that I could get deals in Orange County, Orlando, Florida, or other really high-demand areas.

So, I think that you should still check those because he said that he bought a property in the fastest growing county in Pennsylvania or whatever, but you just have to shoot for anywhere and just go. I shouldn't shy away from or rule out an area that has a population decline or high crime. I just really shouldn't worry about that stuff. Almost like if I have the VA power, like pool list for every single county, scrub every single county's list, and then approach it that way. Because I think that's where you're going to fare the best for actually getting deals.

And then once you have done it in a few cycles, you might know, “Oh, okay, I can specialize in this county, in this county, in this county.” But for starting off because you really are shooting from the hip and there's no real gauge otherwise, I would just say hit everything in a state if you can.

Seth: Yeah. I see what you mean. Just because you had success in one county one time, it doesn't mean at all that you're going to have success there again. Like the next year, there could be more competitors who happened to want the same ones you want. It’s not that formulaic.

I remember just going through some of the ones when I was reassessing the situation after the auctions were done in Michigan. There were a few that I probably could have gotten at that 50% of market value range, but they were all kind of just like, “Eh.” Like they weren’t even in the same universe as what I would call a home run deal. But I could have made money on it. It just wasn't anything to get that excited about. But maybe you just sort of have to be okay with that, like be fine with the monotony of getting lots of deals.

Jaren: Yeah. And I did like the fact that he would get by landlocked properties or problem properties and figure out ways to increase the value there. And I do think that there's a lot of potential there. I think in my land business that's something that I'm going to be slowly dipping my toe into. It’s just trying to figure out ways to increase the value of the property without having to develop it.

Seth: Yeah, I know that perc tests thing. I don't know that you can just assume that this is possible everywhere, but there is that raised septic drain field where basically say if all of the ground is clay and it doesn't drain at all, you basically just build up this sand base and can use that as the drain field. And from what I've heard, it costs a lot. Like over $10,000 to do that. But if that is the one thing that makes the property worth way more, it could totally be worth it. So, I kind of like what he was talking about in terms of what to look for in terms of perc tests. Like if it's on a super steep slope, well, that's probably going to disqualify right there. Just kind of good practical tips on that.

Well, let's do our little exit question here. So, the question for today that Jaren and I are going to answer is aside from family, friends, and pets, what would be the most difficult thing for you to give up in your life?

Jaren: Yeah, right now it would have to be videography. I've really been diving really deep in learning how to create videos. And I absolutely love it. I’m by no means an absolute expert at all. There's a lot that I don't know, but there are a few things in my life right now that gives me more joy than creating videos and editing videos and thinking about videos, and learning about videos. So, if somebody were to put a gun to my head right now and say like, you got to give that up, I don't know if I could.

Seth: I would literally rather die than give up video editing. I think for me, I have a lot to lose right now in my life. And what I mean by that is a lot of things have gone well. Like I've been blessed with much. If you exclude family, friends, and pets—I don't even have any pets—but if you exclude those as an answer to the question, I would probably say my freedom in terms of working. If I had to give up my current situation and go back and get a job that I didn't really care about… Man, that would be hard. I don't think I would fall into a deep depression. I would probably be fine. But just the idea, if you were to tell me that that was going to be my future in the next 12 months, that would be a hard thing to come to terms with for me.

So, I feel like I have it about as good as it gets right now in terms of, I'm free to spend my days, however I want to. And the money is there and I can stay at home or I can go where I want and I can work with who I want to. I feel like it's pretty much as close to perfect as it can be. And it's kind of like people who have been wealthy and then it's taken away from them. I feel like it's way harder to experience that than it is to just be poor all along because you sort of tasted how good it is and then it's gone.

Jaren: To your point, there's a lot of people that if they lose a lot of money from investing in the stock market or whatever, a lot of big crashes in history, like the 1929 Great Depression. A lot of people ended up committing suicide because just overnight their entire life savings were gone. It can be really hard.

Seth: That's interesting. Not to get super deep here, but that whole suicide issue or depression issue in terms of like, why do we get depressed? Or why do people commit suicide? It's really interesting. It's funny, in my alma mater, when I went to college, it sends out this quarterly publication to all the alumni and it lists out people who have died. There was a person that I knew on that list that I graduated with and she died and I think it was suicide. I don't know that for sure, but I think that's what was going on because I know she had been pretty depressed for a long time. It's just interesting, like where a person draws their happiness from or their worth from, or their reason for living. I feel like some of that is maybe just like a chemical imbalance or disease. Maybe it's genetic. I don't know. I haven't suffered with it a lot myself, so I'm probably not one to make a lot of guesses on that. But yeah, it's just a weird thing.

Jaren: I think a lot of it has to do with expectation. If you expect much in life and then you don't get that for whatever reason of what you're expecting to get, then that's a huge source of pain. I think that on the flip side, if you don't expect much, then you're pleasantly surprised with all of the blessings that you get. I just think it's a big mindset thing.

Seth: Yeah. Underneath expectation is sort of this assumption that I deserve something. Like I am worthy of getting this good thing and that's why I'm expecting it. It's interesting in terms of, how do we define what makes you a good person and whether you deserve anything in life. It’s weird. It's weird how the human mind goes there and makes all kinds of assumptions about that stuff. But anyway, that's my answer. It’s I would not want to lose my freedom, my working life.

Jaren: Yeah. That’s awesome.

Seth: Well again, if you guys want to check out the show notes, head over to retipster.com/97. You can find a lot of stuff there, information about perc tests and timber harvesting, and my experience at the tax deed auction, David's BP interview, and his BP profile, all that stuff.

And also, if you guys are listening on your phone, go ahead and text the word “FREE” to the number 33777. And you can stay up to date on all the latest and greatest things going on with REtipster. Thanks again, everybody. And we'll talk to you in the next episode.