Overspending at a Tax Auction

We recently visited a tax auction and saw some experienced and inexperienced buyers making bids. County public tax auctions can be a viable way to acquire land and even developed land with homes on them. We assessed and made bids on over 30 parcels. 99% sold for way over our viable price target. One parcel we were willing to pay $15k for sold for $70k. You may think that parcel maybe work $70k. Well you can buy a similar parcel on the MLS for under $30k. So this buyer clearly over paid. There was another buyer who bought close to 200 properties at the auction. 90% of those parcels were in remote areas of the desert unused land. That buyer paid low prices on many occasions, but many other parcels sell today in these remote areas for very little or they don't sell at all. We are not sure how this bidder will ever get his money back on 200 parcels of useless land. This bidder also bought 80 acres for $160k or $2k/acre. One can get land in the same area for under 500 an acre. The moral of our argument is not all bidders at public auctions like this one in Los Angeles County get great deals. Unless you intend to hold onto the parcel for 20 plus years many of these bidders overpaid and will not see a return on that cash investment. Don't Pay over retail at a wholesale venue