Let me answer that question by telling you a story about a couple from Arizona. I just spoke with one of my customers who lives in Arizona and traveled to the Travis County tax sale this November. The couple purchased some lakefront property with a 4 bedroom house for around $60,000.

The market value of similar properties in the neighborhood is at $220,000 to $250,000. The property has a 6 month redemption period because it was not an agricultural use property, nor homesteaded, and it does not have a severance of the mineral estate (New Texas Law).

They have several choices at this point:

1) Flip it and make a quick $30 to $40K ; or
2) Hold it, rehab it, and then sell it at market value for a profit of around $120,000 to $150,000.

OR

If the owner decides to redeem then they will make around $15,000 or a 25% return.

I think I was most impressed with the way this couple followed my suggestions to the letter. Every possible liability was reduced like clockwork and exactly as I describe in my course. For example:

1) they made sure the status of the property as a homestead or ag. exempt researched as of the judgment date..not just the current status
2) they viewed the property, talked to neighbors, and drove around the subdivision
3) they called realtors and ran some 'free' comps - as I suggest in the course
4) they conducted a title search and made sure other liens such as:

- materialmen's liens
- child support liens
- Federal Tax liens
- State tax liens...did not exist; and

5) they are making sure the deed will be filed as soon as Travis County finalizes the paperwork.

By following the techniques in my course they were able to reduce thier risk and catch all the possible pitfalls and liabilities before buying.
In my opinion, this is the the way that real estate investing should be. It should be fun, relatively secure, and always well researched.

Don't ever go about investing unless you understand what could go wrong. If you buy a product which fails to school on what could go wrong then you are missing out on half the information you need. Due diligence means you look at the deal first from the standpoint of what could go wrong...then you look at it from the standpoint of what could go right!

Best of Luck!