Building a Rental Portfolio Through Tax Sales with Jim Tannehill

A tax lien purchase does not always lead to a property. For Jim Tannehill, that is part of the model.

Jim and his team may evaluate hundreds of properties before an annual tax sale. They narrow those properties down, set maximum bids, purchase tax liens, and then wait through the redemption period.

If the owner pays the taxes and required costs, Jim gets his principal back along with interest. If the lien is not redeemed and the legal process is completed correctly, his team may eventually acquire the deed.

Jim explains that the tax sale is only one piece of the puzzle. Once a property is acquired, his team still has to decide whether selling it, renovating and selling it, or holding it as a rental makes the most sense.

Jim also shares why discipline matters. His team stays inside specific buying parameters instead of chasing every cheap property that appears at the auction.

Key topics and takeaways:

• Why Jim sees tax sales as an acquisition strategy rather than the entire business
• Why his team may drive by 500 to 1,000 properties before an auction
• How roughly 220 possible bids can turn into around 100 winning liens
• Why only about one third of those liens may become deeds today
• How redeemed liens return principal plus interest
• Why renovation money is included in the original capital budget
• The mistake that led Jim to buy a garage instead of the house he thought he was bidding on
• Why parcel numbers and county GIS information matter
• How Jim decides whether to sell, renovate and sell, or hold a property

Guest Information:

Jim Tannehill is a real estate investor who has spent roughly a decade building a portfolio of income producing properties. His company self manages a portfolio in the 200 property range, with a focus on duplexes and single family homes.