Last Updated on August 30, 2025
Table of contents
- How Josh and Mike Beat the Competition at Online Tax Sales
- The situation: one prime property and a bragging bidder
- Why enter a high maximum bid early?
- Why go up to 90 % of ARV?
- Understanding proxy bidding
- Key lessons from Josh’s strategy
- When should you use this tactic?
- Other tips for tax deed success
- What happened after placing the high bid?
- Learn with us
How Josh and Mike Beat the Competition at Online Tax Sales
In a recent video, Coach Josh and Mike show how they outbid other investors during an online tax sale. They explain how they identified the most desirable house in the auction, met a rival investor who boasted about his larger budget, and then used a bold bidding strategy to keep that investor and most other bidders away. This article walks through their approach step by step and shows why it worked so well
The situation: one prime property and a bragging bidder
At this particular reoffer sale, only one house sat in a truly desirable area. Because of that, everyone was watching it. Josh and Mike visited the property with their students a day earlier and met another investor who bragged that he had more money and would definitely win the house. Rather than engaging in a bidding war, Josh decided to create a “pay‑to‑play” environment.
Why enter a high maximum bid early?
Josh noticed the current best bid creeping up by $100 every few minutes. To stop this gradual rise, he decided to enter a maximum bid of $125 000—almost double the current price. He explains that this tactic:
- Signals seriousness – A big opening bid shows you mean business, causing casual bidders to drop out.
- Speeds up the process – It avoids endless increments of $100, which only prolong the auction.
- Keeps costs down – Because online auctions use proxy bidding, you pay only $100 above the second‑highest bid; your high maximum doesn’t mean you will pay it.
- Makes others pay to play – Anyone wishing to test your limit has to jump in large increments, which scares away low‑budget investors.
After entering the high bid, only well-capitalized bidders remain, and most of them think twice about pushing higher. Josh calls this turning the auction into a pay‑to‑play scenario.
Why go up to 90 % of ARV?
In the video, Josh is comfortable bidding up to 90 % of the property’s after‑repair value (ARV). This might seem high, but they had critical information that others didn’t. They talked to the occupant, inspected the interior and exterior, and discovered that the home was in excellent condition. The tenant wanted to stay and was willing to pay $1 500 per month starting immediately. With almost no repairs needed, the rental income would cover costs quickly, making a high ARV bid still profitable. Josh notes that many investors avoid bidding near full value because they don’t know the condition; having that information provides confidence.
Learn more about how to choose the right properties in a tax deed sale in our guide to picking properties.
Understanding proxy bidding
Online tax deed platforms use proxy bidding, similar to how some major auction sites work. When you submit a maximum bid, the system only raises your current bid when someone else bids against you. For example, if the current top bid is $70 200 and you enter $125 000, the system makes you the high bidder at $70 300. If another bidder raises the bid by $5 000 (to $75 200), you remain the leader but the system increases your displayed bid by only $100. This blind bidding means only the leader knows the true maximum. Bidders must make large increments to test your limit. In the video, another investor tries to find Josh’s max by adding $5 000 at a time, but quickly realizes that the limit is high and gives up.
Key lessons from Josh’s strategy
- Do your homework. Josh and Mike visited the property, talked to the occupant, and took pictures of every room. They knew what the house was worth and what repairs were needed.
- Set a realistic maximum bid. They calculated a maximum of $125 000 based on the property’s condition and rental potential.
- Bid early and big. Entering a high maximum bid early discouraged low‑budget investors.
- Use proxy bidding to your advantage. Even with a high maximum, you only pay slightly above the second‑highest bid.
- Stay calm. Josh never panics when others test his limit; he knows his budget and sticks to it.
- Collect rent quickly. Because they knew the tenant wanted to stay, they planned to collect rent as soon as they won the auction.
When should you use this tactic?
- A desirable property with little competition. If there’s only one attractive property in the auction, expect lots of interest.
- Clear understanding of value. Only bid high if you have inspected the property or have detailed information.
- Strong cash reserves. Your deposit must cover at least 5 % (sometimes more) of your maximum bid, and you’ll need funds available immediately after you win.
- Confidence in your numbers. If the market softens or repairs are more expensive than expected, a high ARV bid could become risky.
Other tips for tax deed success
- Inspect properties whenever possible. Knock on doors, talk to occupants and neighbours, and look for hidden issues.
- Understand state laws and deposit rules. Each county has different procedures for deposits and payments—check the county clerk’s website for details.
- Research rental demand. Knowing rental rates helps calculate potential cash flow.
- Learn the traits successful investors share. Our article on the top trait needed for tax lien and deed investing covers mindset and discipline
- Consider partnering with experienced investors. If you’re new, you can learn about partnering to spread risk and learn from someone who has done it before
What happened after placing the high bid?
After Josh entered $125 000, another bidder raised the price by $5 000 to find out where his limit was. The system showed Josh still as the leader. The rival eventually realized that Josh’s maximum was far above his own and stopped raising the bid. This saved both time and stress. Josh and Mike’s “pay‑to‑play” strategy worked: they kept the casual investor who boasted about his deep pockets from getting the property, and they set themselves up for a profitable purchase
Proxy bidding lets you set a maximum bid in advance. The system only raises your bid when someone else bids, usually by $100 increments. You only pay slightly above the second-highest bid, not your maximum, unless someone pushes you all the way there.
They’ll quickly see that the system keeps you on top with small increases. Unless they’re willing to jump to your level, they usually drop out, as the rival bidder in Josh’s example did.
This works best when there’s one standout property in the auction, you’ve done your due diligence, and you have the cash reserves to back up your maximum bid. It’s not a tactic to use blindly.
You can join one of our tax sale field trips, where we walk you through real auctions and strategies like this. Many attendees start investing during or right after these trips. You can also download our free ABCs of Tax Liens & Deeds book to get started.
Learn with us
If you want to see these strategies in action, join one of our tax sale experience trips. On these trips, we take you into the field and show you how to buy tax deeds in real auctions. According to Dustin, about 80 % of attendees end up getting involved in property during or soon after the trip. Click below to learn more and reserve your spot
You can also download our free ABCs of Tax Liens & Deeds book and get a free consultation with our team. These resources explain the basics of tax lien certificates, tax deeds, and how to get started—even if you have never invested in real estate before.
Ready to start? Download the free book and book a free call today.
