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Property Tax Foreclosure Auctions: Beginner’s Guide to Profitable Deals

By February 18, 2026Real Estate Pros Show

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Show Summary

In this episode of the Real Estate Pros Podcast, host Michelle Kesil interviews John Bonillas, a general contractor and real estate investor who specializes in buying properties through Texas tax foreclosure auctions. John shares how he transitioned from spending thousands on real estate seminars to finding real opportunities in property tax foreclosures. He explains how tax auctions work in Texas, including bidding rules, registration requirements, and redemption periods. John highlights the benefits of buying distressed properties at a lower price point, leveraging his construction background to rehab homes efficiently, and converting properties into profitable Airbnbs. He also discusses common mistakes new investors make, the importance of researching properties and markets, and why having stable income outside of real estate is crucial when starting out.

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    Investor Fuel Show Transcript:

    John Bonillas (00:00)
    prime example is the house I’m sitting in right now. Uh, we picked up this house at auction for $60,000. It was like 60, 61,000. Um, this is a three bedroom, bath. We converted it to a four, two and had a swimming pool in the back also. It was already there. Took us some money to rehab the swimming pool more than I, than I wanted. Uh, but we bought it for 60. We were all in on the rehab, including the pool at about 95.

    So that put us all in at about $155, and then we had some holding costs. We couldn’t touch it for six months, right? So I had to board it up. I did have to get insurance on it, Builders Risk Insurance. And then of course, I paid to keep the lights and the water on. So I had about $5,000 in holding costs there. So we were about $160 all in. Right now, the house appraises at about $230.

    Michelle Kesil (02:17)
    Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil, and today I’m joined by someone I’m looking forward to chatting with, John Bonillas who is a general contractor and real estate investor focusing on tax foreclosure auctions. So, excited to have you here today, John.

    John Bonillas (02:36)
    Thank you. I’m excited to be

    here.

    Michelle Kesil (02:38)
    Awesome. Yeah, I think our listeners are going to get something from how you’re approaching investing through auctions. So let’s dive in.

    John Bonillas (02:46)
    yeah. So in Texas and in many states throughout the country, you know, people don’t, people have property taxes, obviously. And if you don’t pay these property taxes, eventually the county will sue you for those taxes. And after they sue you, if you still don’t come up with any money or any payment plan on, plan on these, they will then auction your property to the highest bidder. In Texas, this takes place the first Tuesday of every month.

    The first Tuesday of every month in Texas, there are your mortgage foreclosures and then your property tax foreclosures. I focus more on those property tax foreclosures where it’s the county that is foreclosing on the property. I’ve done that in San Antonio, Corpus Christi, Houston, and I’ve gone out as far as Waco in Dallas and Fort Worth. It’s the same process in Texas on how they’re sold the first Tuesday of every month.

    Redemption period, redemption rights, and a number of other things that I’m sure we’ll dive into.

    Michelle Kesil (03:40)
    Awesome. And yeah, how did you get started in your investing journey? Is the auctions like your primary way that you got started?

    John Bonillas (03:50)
    Yeah,

    it was. I say first when I started thinking about real estate was probably like in 2016, 2017. I started going to like seminars, you know, where you go to these free seminars and you go and you get a bunch of free info, but it’s just breadcrumbs. And then from there, they’re getting you to try to buy in to day two, then they’re trying to get you to buy into.

    just more programs and more mentoring and more coaching and you don’t really get anything. ⁓ So I did that for about two years and I probably ended up spending maybe like six to eight thousand dollars in just different seminars, different strategies, different so-called gurus. ⁓ And what I did take away from that was auctions. Auctions were always spoke of on the place to pick up properties at the lowest price. So then that’s where I really started to do my own research into mortgage foreclosures and then property tax foreclosures is where I found that.

    And on that property tax foreclosure side is where, for me at least, being a general contractor and having, you know, if you’re going mortgage foreclosures, you definitely need to have more money. There’s more competition on that side, higher buy-in. But on the property tax foreclosure side, much lower buy-in. And if you’re experienced in rehabbing properties, it’s much better. So I was a GC. So for me, it seemed that that was the best way to get in. Lower price point to buy-in.

    I knew a lot about rehab and could do a lot of the work myself or find and have subs that I already work with to give me those lowest price points to rehab these properties cheap. ⁓ And for me, that’s where I just put everything full steam into the property tax foreclosures.

    Michelle Kesil (06:12)
    Awesome. And so what are kind of like the ins and outs of the foreclosure world? Are there like any rules or regulations that you’ve had to learn in order to abide by this way of investing?

    John Bonillas (06:27)
    Yeah,

    so there’s a ton of them. There’s so many. There’s so many that I did write and I wrote a book on this and I give it to people for free. It’s an ebook if anybody wants it. They can just look up Tax Deed Mentor on YouTube. Just look up Tax Deed Mentor. That’s my YouTube channel. You can just send me a message and I send a free ebook to folks. It’s a 45 page read, super simple, but explains everything that there is to know about property tax foreclosures.

    because you can find great, great opportunity in there, but at the same time, you can make some terrible mistakes, which will cost you your life savings. If you don’t know what you’re doing, you can buy something that you think is a house and it’s really just a vacant piece of property behind the house or something with the same addressing. So there is a lot to know about it. But if we’re going to talk about the basics of it, the basics would be first, you cannot owe any back taxes to the county yourself, right? If you owe any, owe any money in property taxes to the county, you can’t go.

    bid and try to win properties that are going foreclosed for property taxes. Number two, you just got to have valid form of identification. ⁓ Driver’s license ID, out of state ID, as long as it’s valid, you’re good to go. You don’t need like a special real estate license. You don’t need to take a special class. All you need to do is make sure that you don’t know taxes to the county. Make sure you got valid form of ID. And then depending on your specific county, there is a window to register, right?

    So for me in San Antonio, you have to register the day before the auction. You have to register by Monday, Tuesday you can’t go. If you’re in Houston, in Houston, Harris County, you can register the day of the auction. Some auctions are online and they require you to register and then put reserve money in at least like three days prior to auction. Choose like a 5 % reserve you got to put in. And then besides that, knowing where to find the auction lists, all the auction lists are public.

    You can go to a website lgbs.com and you can navigate through that website and it’ll show you where the auctions list or the auction list is almost for every county in Texas. If you can’t find it there you can go to my YouTube channel taxdeedmentor.com and I pretty much have you know free video in there that shows everybody how to find the list, how to register, ⁓ rules to bidding, those types of things. But it’s pretty straightforward. It’s just knowing how to find the list.

    knowing how to do your research on those specific properties, knowing your market, right? Like don’t just go buy some random property because it’s starting at 8,000 bucks. ⁓ The property could be a complete tear down. It could be in a terrible market where, you know, homes aren’t even selling for that much. So knowing your market and then knowing how to research these properties is very important.

    Michelle Kesil (09:02)
    Yeah, absolutely. And what would you say is the most like beneficial part of these foreclosure properties? Like why would someone want to go to these auctions?

    John Bonillas (09:13)
    Uh, sure. Yeah.

    Uh,

    prime example is the house I’m sitting in right now. we picked up this house at auction for $60,000. It was like 60, 61,000. this is a three bedroom, bath. We converted it to a four, two and had a swimming pool in the back also. It was already there. Took us some money to rehab the swimming pool more than I, than I wanted. Uh, but we bought it for 60. We were all in on the rehab, including the pool at about 95.

    So that put us all in at about $155, and then we had some holding costs. We couldn’t touch it for six months, right? So I had to board it up. I did have to get insurance on it, Builders Risk Insurance. And then of course, I paid to keep the lights and the water on. So I had about $5,000 in holding costs there. So we were about $160 all in. Right now, the house appraises at about $230.

    All right, so we’re about 90 Gs on the property. Right now, I operate it as an Airbnb.

    John Bonillas
    the property I’m sitting in now, has an ARV of 230. I use it as an Airbnb now. And yeah, it’s been doing really, really well as an Airbnb. Costs about an extra 15 to furnish it. But we’re having some pretty good turnout so far on it.

    besides houses, like I spoke about previously, is you can buy vacant lots. You can buy vacant lots at a really low price point where you can then build on the lots if you want to. So if you’re looking to pick up cheaper pieces of land that already have utilities hooked up, go into tax foreclosure auctions is a great thing as well.

    John Bonillas
    Cool. But yeah, we Airbnb this property, as I said, but not just houses. You can pick up ⁓ lots, very cheap vacant land, vacant lots that already have utilities hooked up and then you could build there. at tax foreclosures, you can also find lots. You can also find commercial properties as well, too, that are there. Not very often, but sometimes you can.

    Michelle Kesil
    Awesome. And so, what have been some obstacles or challenges that you’ve experienced as you’ve been on this investing journey?

    John Bonillas
    ⁓

    Finding good help, right? ⁓ Finding good crews and good subcontractors is vital. ⁓ It is. That’s probably the most important thing if you’re going to be an investor is you can find the properties cheap, you can find great deals, but then you got to have great teams to be able to come in and complete the rehab and your vision as you see it. So you got to have great drywall guys, great roofers, good siding guys, ⁓ window installers, flooring installers, plumbers, electricians.

    All those key components and crews are extremely important. That’s probably the biggest obstacle that you, I, or anybody’s going to have. that’s me speaking from being a general contractor, right? Finding good help and finding that good help within a certain price point, right, is extremely difficult to do.

    John Bonillas
    Yeah, so biggest obstacles that, you know, I think anybody’s going to face in real estate and when you’re going to rehab properties ⁓ is finding the right crews, finding a good GC if you got one, but all around just finding, you know, good drywall guys, good electricians, good plumbers, know, good siding installers, windows installers, roofers, etc. All these different trades ⁓ and finding good reliable trades that are going to

    fit it in your budget. Within your budget is probably the biggest challenge that anybody in real estate is going to face when you’re buying real estate that you need to rehab. ⁓ You don’t always need to buy real estate that you need to rehab, but if you are, which most people are, that’s it. Having a great GC, great cruise, because you can have great deals that you find, but then if you can’t follow through on that back end and rehab that thing within a budget, you’re just going to lose money all day long.

    Michelle Kesil
    Yeah, definitely that’s important. And what do you feel are some of the main keys that have allowed your business to be able to continue to grow and run smoothly?

    John Bonillas
    ⁓ I guess the fact that real estate isn’t my I’m not a full-time real estate investor. I have a good I run a business and that business pays me well. Investing in real estate whether we’re losing or winning my business is always bringing me the money and the reserves in. ⁓ And that’s what I did. That’s how I got into real estate is I have a general contract in business. I worked my tail off and all the money that I was able to save I then started investing in lots.

    and then from lots, went into buy houses at auction. But having that, so if you’re a nine to five, it doesn’t matter if you’re a business owner, even if you’re just a nine to five person, having that good, stable, reliable income and knowing how to do that well, well then it’s kind of like your security blanket where you can say, I either I can take a heat lock out on my property or I saved up 60,000 bucks or.

    You know, I got some people that want to invest and we want to do this. But no matter what, even if this real estate venture fails, I still got money coming in over here and I’m safe. That does mean that you are going to work two jobs. That does mean you’re going to be super stressed out. You’re going to be up earlier and you’re probably going to be working way later than usual. And you’re going to still have a regular nine to five or still run a business. But as long as you got good income coming in and you’re good at making money, whether that be having your own business or just you just have a really good nine to five. ⁓

    I think that’s important to have and that’s what’s going to keep you safe in all this is having money coming in while you’re over here on the side trying to do this real estate venture. And then if you can get to where real estate is your full-time income,

    Michelle Kesil
    Yeah, absolutely. And what are you most focusing on solving or scaling to next for your business?

    John Bonillas
    Wow, so we have another property that we’re looking to finish out right now. We’re currently working on it. We bought it at auction last year. Same thing with that one. We’re going to put that one as an Airbnb. It’s next to a really big military base here. It has a swimming pool in it. We’re going to finish that one off. It’s a four bedroom, three bath, has an in-ground pool. We’re going to finish that off, furnish it as an Airbnb. Hope to have that one up by May of this year. That’s on the real estate side. And then from there, ⁓

    I have another property which we’re gonna Airbnb hopefully have that one up and running by August. ⁓ And that’s it for real estate side is transitioning the three properties right now into Airbnbs. We have one commercial property that we bought at auction as well, where we are gonna make it a small food truck park and we’re gonna charge rent to put about four food trucks on there. So that’s another project that we’re working on right now. So for this year, I’m probably not gonna be back at auction buying anything more this year.

    just going to be finishing off the current projects that we have.

    Michelle Kesil
    Awesome and what advice would you give to a investor that’s just looking to get started or is early in their journey?

    John Bonillas
    ⁓ Yeah, so ⁓ educate yourself on a specific strategy that you want to focus on because there are all these different strategies of real estate that you hear about. ⁓ For me, I would stick to one that you know, whether you’re going to be a wholesaler and you just want to wholesale, cool, just focus on wholesaling. Educate yourself in wholesaling. Get a wholesale mentor. If you want to go be a real estate agent, cool, get your license, do that. If you want to be an investor,

    Figure out where you’re get your cash from right whether it’s gonna be hard money whether you’re gonna take a loan out on your on your main and your on your Homestead property or whether you’re gonna save up your money and then and then take that risk or whether you’re gonna form a group And then you guys put your money together and then go go risk it but educate yourself fully on whatever strategy you’re gonna pick know the pros know the cons Know the worst possible thing that could happen plan for that one right like hope for the best but prepare for the worst

    ⁓ Is always a good strategy. I think it’s not and you’re not really being scared It’s just calculated risk is what it is calculate your risk know that they’re there ⁓ Educate yourself and then don’t wait too long right like analysis paralysis like you can also think too much Learn too much and over educate yourself and you just never take that leap like at a certain point once you feel comfortable Maybe you get yourself a mentor that mentor can really hold your hand and walk yourself through it cool like take that leap

    Go take that risk and go go see what’s gonna happen after your first year after your first project You’re gonna know whether real estate’s for you or not. You’re gonna know man. Okay, I learned a lot It was super tough, but I can do it again or you’re know man This is the toughest thing I’ve ever been a part of I want to try something else like you’re gonna know but but educate yourself and then go take that leap of faith ⁓ But it’s calculated risk, but it is still risk

    Michelle Kesil
    Yeah, definitely. think that is some great advice. And so what are you most looking forward to this year when it comes to any projects or how you see the market shifting?

    John Bonillas
    Yeah,

    so I don’t see the market like I don’t see the market turning around and being great in one year. I really don’t. That’s why for for me, it’s getting these three properties and getting them to cash flow as Airbnb’s and then finishing the food truck project that that I got working too. Because I don’t see the market turning around because, know, for me, it was to sell these houses, not to really hold them for too long. But I don’t think the market’s going to recover next year. I don’t even think it’s going to recover in a 27. ⁓ So.

    I want to hold these as Airbnbs, finish them off, get them cash flowing really well. I like Airbnbs because you can always get into your property. You can see it almost every week if you want to. You just get to maintain the thing way better than having a long-term tenant where you come in after a year and you just, you know, you got to redo a whole bunch of things. So I prefer the AirBnB game and we’ll hold them this way for a while. And then finish the fruit truck project. And then after that, we’ll see what 2027 brings.

    once we can finish these off in 2026.

    Michelle Kesil
    Yeah, amazing. That is an exciting position to be in. Awesome. Well, yeah, I can imagine it’s a lot of work that you have to balance.

    John Bonillas
    Yeah, super stressful too.

    Yeah, always.

    Michelle Kesil
    Awesome, well before we wrap up here, if someone wants to reach out, connect, learn more about everything that you’re up to, where can people find you and connect with you?

    John Bonillas
    Yeah.

    Mm-hmm.

    Yeah, for sure. So you can find my channel over YouTube at Tax Deed Mentor. If you do TikTok, you can same handle, Tax Deed Mentor. So T-A-X-D-E-E-D-M-E-N-T-O-R, Tax Deed Mentor. You can find that on YouTube or you can find it on TikTok. Bunch of free information on there. As I said, I also have an ebook that I wrote and that ebook literally is free of charge. I don’t charge anything. I don’t want anything from it other than maybe you send me a picture of your first property one day.

    because it was so hard for me to find real mentors, real help, that I don’t want to be that obstacle. I don’t want people to face those obstacles. I just want them to be able to do it. Go buy properties and then go, you know, try to break free from the rat race. There are many properties in Texas, you know, so I don’t care about creating more competition. I’m not going to go buy them all. There’s thousands that go to auction every single year. So that ebook, if you’re interested in it, you can message me. You can just send a text message, an ebook to 210.

    767 CASA that’s 210 767 CASA and that’s it that’s how you can reach me.

    Michelle Kesil
    Perfect, well, I appreciate your time and your story. Thank you for being here. Of course. For those tuning into the show, if you got value, make sure you’ve subscribed. We have more conversations with operators like John who are building real businesses. We’ll see you on our next episode.

    John Bonillas
    For sure. Thank you for having me. Thank you for having me.

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