Introduction to Module 2

Transcription

1

2 Hello again! Jack Bosch here, and welcome to module number 2. Didn t I tell you that after module number 1 you would really know the core pieces of how this system works, or at least what the core philosophy is behind it is and how you re going to be able to get tons of deals out of this program? Introduction to Module 2 Now here we are in module number 2, so let s get started. Let s talk about these lists in more detail. We ll see how to get them, how to filter them down, and how to prepare for your mailing. I m going to keep it short and sweet because we have a lot to talk about in this module. I m super excited to have you on board here, so let s get going right away.

3 Module 2 Here we are in module number 2. In module number 2, we re going to talk about which list is best. We talked about that a little bit already in module 1, but now we re going to go in much more detail. We re also going to go in detail over the steps to get each of these lists, what each one contains, and how to talk to the county. You ll have to get the lists from the county, which will mean talking to what s called the Information Technology (IT) Department and getting the right piece of information from them. Then we ll go into how to analyze and filter the list so that you get the biggest bang for your buck. Now don t get scared when you hear me talk about analyzing and filtering, because basically all you ll be doing is pressing a few buttons on a keyboard to get the best of the best of the best. So, it s really simple.

4 Flipping is Freedom Okay, so, first of all again remember: Flipping is freedom, because flipping provides those big checks, those 10, 15, 20, 45 thousand dollar checks that you want. This kind of cash will let be able to quit that job, pay off that debt, to get yourself out of that one-time-cash debt hole that you ve created for yourself. Remember: one-time cash is the cash you only work for once; and even though flipping is one-time cash, it s better quality one-time cash than just working in a job because with one deal (let s say you get the big deal right away at the beginning), with the $40,000 dollar deal guess what? You can pay off your property taxes (if you owe any), you might be able to pay off your car or cars (plural), you can pay off your student debt, you can pay off your credit card bills, and within a few deals you re completely debt-free you might even have paid off your house, depending on the price and value and the size of the mortgage. So, ten deals like that and most people will have paid off all of their debt and they might have a lot of seed money in their bank account. At that point you start doing all the same deals, but instead of flipping them now you have the freedom to actually go and buy some property straight up and use it as a rental property to start some cash flow.

5 Challenges in Real Estate The challenges most people in real estate face are the following: 1. Finding leads with equity 2. Finding motivated sellers 3. Finding buyers with money (because deals are too skinny and nobody wants to buy them) 4. Analyzing the deal, particularly if the deal is at a distance, not close by to where they live 5. Missing the step-by-step system 6. Lacking the right paperwork 7. Building a team to sell property fast Luckily, you won t have any of these challenges because you re right here, and you re learning a technique that will give you what others are missing: deals with equity, motivated sellers, lots of buyers with money (I ll go more into that later particularly modules 4, 5, and 6 which are about selling your property and getting lots of buyers with money to come your way). Analyzing the deal can be as simple as doing nothing but passing it onto us. If you pass the deal on to us, we will analyze it. As and far as the paperwork goes, the right paperwork is already included in the program here and if you are looking for a team sell the property quickly, well, how about yours truly? I m here to help you with that if you would like me to do. Even if it s just for the first few deals until you take it over from there, whatever I can help with I will be happy to help out.

6 Steps of the Actual Program So, here are the steps of the actual program: Step 1 Getting the tax sale list: not the list of what s coming up for tax sale last month or next week, but the tax delinquent list. Step 2 Market to the list: meaning you send them some sort of correspondence, a letter or postcard or something like that. Step 3 Once they contact you, you negotiate a deal with them and you put it under contract. Now, at this point you could be done, because (Step 4a) you can just pass the deal on to me and we everything from here on out ourselves and make sure that when the deal goes all the way through you get paid for it. Or, alternatively (Step 4b), if you don t want to share the deal with us and if you don t want us to do all the work, then you can actually do it yourself and you can start marketing yourself, and obviously we will cover that in great detail later on as well. Part of that (Step 5) is building a buyers list, a list of repeat buyers that are interested in your properties. I m on the buyers list from other wholesalers and just this morning I got a deal for property in Phoenix, Arizona where I live, in the neighborhood that I d like to have property, a four-bedroom, two-bathroom house that was offered for $65,000 dollars. Now I know how these houses look and I know what kind of repairs are necessary, so I can calculate another $15,000 worth of repairs in this house without even looking at it. Because they re brick-built, there s really nothing that can be substantially and fundamentally broken in those houses, so we re talking about appliances, electricity, air-conditioning and maybe some paint and some tile or something with the water heater. And then we ll be pretty much done with the thing. The moment I got that, I ed the guy back and I m waiting to hear back from him right now whether or not the deal is still available. If it is, I might just use the money that I made from some flips and buy the property, because similar properties in the area cost up to $130,000. So, at $65,000 that is a smoking deal that will rent for $900-$1,000 all day long. Before I go into Step 6, ask yourself, how did they find me? They found me because I am on their buyers list, and you re going to be doing the exact same thing. You re going to build a buyers list, of people that are interested in what you have to offer, and as you come across properties you will send it out to them and they will buy these properties from you. And then, Step 6 is assigning and closing on the property. This is super cool because it s legal in every state, it takes very little time, it takes very little money (the only money you need is to send the mailing to these people), and because it doesn t take much effort at all - particularly if you work with us and pass the deal onto us. It also works everywhere in the United States - again, particularly if you work with us. You can totally do this on your own anywhere in the country by following these steps, but we want to make it easy for you.

7 Step 1 How to get the Tax Lien and Deed List? Okay, so, Step 1 How to get the tax sale list? There are many ways to get the list, and some of them we ve talked about already. It clearly depends on what list you want. Let s take one quick look at the different lists and how to get them. How to get the tax lien and deed list? Well, it s actually very simple - the county publishes them in their newspaper. If it s a short list then that s just fine because you just get that newspaper if you live in the area. If there are only records on the tax deed list, you can just use the newsprint and scribble down the mailing addresses. Often the county also publishes it on their website for you to download free of charge, and you can also get it via CD for approximately dollars. I haven t seen it sell for more than that, because it s just a simple CD that they are publishing in the newspaper anyway and anything they charge would be to cover their cost of production; the CD itself plus a few minutes of somebody working in there.

8 Sample Websites Let s look at a website. Here we have an sample website Fulton County, Georgia. The way I found it was by going to Google and searching for Atlanta County. When Fulton County came up, I did another search for Fulton County. Up came Fulton County property appraiser, so let s look at that. And after I clicked on it, what I saw was Fulton County Assessor s office, and clicking on that link brought me to this website here. On that website it opens to property records. That s awesome, because you can look here there s Home, there s the Board Members, Public Notices, there s all these different things that you can find. But what we want is Property Records. All I do is I click on this, and what comes up is another window. Now in this window what we ll do is we ll look at what they have to offer. It says search by location address, search by owner name, search by parcel number, search by legal information, search by map, and sales searches. They allow us to search what has sold in the area, so if you need to find comparables to properties right there we can search for what they sold. The one that just blows me away is right here, the one that says sales list. If I click on sales list it gives me the list of the upcoming tax deed sales in Fulton County, Georgia. Georgia is a tax deed state, meaning that they sell the actual property at auction. Here there is data for historic sales, what came up at sales in past months: 14 th January; February; and so on. We can click on that and see, well there s no data found for February. We can look at January - there s no data found. But if I look at some other month here, we can see what came up here. So now these are properties that sold already on that date.

9 Historic List This is a historical list that really doesn t help us too much, but it at least shows us what was sold in that county in the past. Let s go back to this one. Here I can see that we do not get the list here online. What we get is the historic list of properties that sold at public auction. Well that s not what we re looking for. So while we re kind of happy that at least we can search using different criteria, we don t see the lists themselves. So let s look a little bit further. Perhaps we can snoop around here at some related sites. We can see the contact us. Well, that s an important thing. Here we can find out some contacts, some telephone numbers, some addresses and so on. We have forms and documents, but none of that is what we actually need. Alright, so even though we didn t find what we were looking for here, let s go back to our power points and we ll need this website in just a little bit again to look up something else.

10 Contact Us Info This example was Fulton County, Georgia, and Georgia is a tax deed state. We couldn t get the list from the website, which means we would have to call them in this case. Let s go back to the tab that said contact us. From here you can call the number, and you ll want to talk to the Property Records or either to the Tax collector. There we go, to the Tax Commissioner - it s actually even mentioned here. In these case, you want to call the Tax Commissioner (as the position is called in Georgia) for any questions regarding your tax bill, please contact the Tax Commissioners office at That seems to be their phone number here at the bottom. When you call them, you will ask them to give you the tax deed list, the tax deed records that are coming up for the next auction. In that case they might point you to a different page on this website that I just haven t been able to find so far, and then you can just go there and download it. They might also just it to you in the form of an Excel spreadsheet. One of the cool things that you can do here is if you search on these pages, the historical lists, you can often click on Open results in Excel. And then they bring them up right here, in Microsoft Excel, and now you have a whole bunch of records in there with that information.

11 Historical Data. Two Keys Pieces of Information Location Address and Owner Address The cool part about historic data is that they give you two key pieces of information. One of them is called location address - which means where the house is located and the second is the owner and the owner address. They give you the address of where the owner of the property is located. The chances are when you ask them for the list for the upcoming auction, they will also give that to you. This is a cool county, because even if you can t get the list right away you can call them and chances are that the list they send will have the mailing address. But even if you don t get the mailing address, there are some ways that you can get it. For example, even if they don t give the list to you over the phone, you can get put on the county collector s mailing list or you can go to places like and subscribe there for a few dollars a month. You can even get a free subscription and then buy a list from them for a few dollars. While these lists often don t have the actual mailing address available, TaxSaleResources.com does have a nationwide calendar of upcoming Tax Sales listed on their website. Another places you can go, you can go to

12 Problems with the Tax Deed/Lien Lists Again, one of the problems with the Tax Deed/Lien lists is that they often don t have the mailing addresses of the owners. But let s assume that you get the list for Fulton County, Georgia without the actual mailing address. If we go back to property records, you can search by the actual owner name or even better by the parcel number. If you have a parcel number of any parcel from any county, for example, the parcel number is always at the very beginning here. We can copy it from the excel list into the search bar, and this will give us the exact link to the property. We can see who the owner is, where the owner lives, their mailing address, and we can just copy and paste that information into the excel spreadsheet that we got from the county or from one of the services that we just talked about. All the information that we need is there. Typically I do this in the evenings when I watch television. I have a lap-top on my lap, and while I watch some stupid show I go parcel number after parcel number if it s a short list. Of course, you don t want to do that for thousands of records. If you have a list that just has 50 records in there, it might not even be worth giving it to someone else; you can just sit down and take those 50 parcel numbers, plug them in the county s website, and pull up the mailing address, and copy and paste that over into your spreadsheet, and now you have the parcel number and all the information that you want. That s how simple it is.

13 Filter them down After you have all this information, and have the mailing addresses, you still have to filter them down a little bit. First of all, you need to decide what you want to focus on. Because think about it: in a list of tax deed and tax lien lists (particularly in the lien lists) there are a lot of properties in there. Lien lists might have 5,000 records, and there could be houses in there, I mean for sure there are many houses in there, but there is also for sure some garbage land, some really pretty land, there is going to be some commercial property, some industrial property, there is going to be some condos in there, some timeshares. All these different things are in there, and you don t know exactly what is what. But here is what you do. You can select houses only - if the list has an indication of what is what. If the lists says what kind of property it is, sometimes in the tax deed and tax lien lists they say Singlefamily residential, they say vacant land, they say commercial, they say what s on the property. So in that case you just sort by that code - sometimes called the use code - and then you eliminate everything that you don t want. Or you select everything that you do want. In this case you ll probably want to select houses only (unless you also want to go after land) and eliminate the garbage stuff.

14 How do you eliminate garbage stuff? Now how do you eliminate the garbage stuff? In case you do not have details like the use codes, you can eliminate the garbage stuff by simply sorting the properties by their value or the taxes that are owed. You also want to eliminate the multi-million dollar stuff, unless you think you can get some of them and have the relationships in place to perhaps flip a $10M commercial building that you might get for $8M and then go around and flip it right away for $8.5M. That is a different kind of game than what we are talking about here. We re talking about a cookie-cutter, replicable model that you can do again and again.

15 Example of Eliminating Garbage Just to give you an example: I just recently did a deal where I had a commercial property under contract that somebody was giving to us for $15,000. In pristine condition it is worth close to $1 million. Now, this thing was not in a pristine condition there had been a fire inside, some parts didn t even have a roof, there were squatters living in it, it was a pretty bad piece of property. But at $15,000 and even with $100,000 of back taxes owed - the thing still looked like a deal. So I put it under contract, asked for a 60-day closing, and we went looking for a buyer. Because it is an odd deal, there s only so many buyers for these odd kind of deals. After looking for nearly 2 months we finally found a buyer for that deal. We were making $30,000 in the process, so it was worth it, but at the same time the amount of effort involved in such an outside of the cookie-cutter model deal kind of made us question was it worth the $30,000? What I m saying is that you should go and focus on the cookie-cutter things that you know you can buy and put under contract. You don t actually buy them - you will put them under contract and flip them right away the next day for a $10,000 $45,000 profit. That means single-family houses, and typically single-family houses that are worth $50,000 $300,000. That s your sweet spot. So if you find something that s worth more than a million dollars, it might be a good deal, but chances are that you re not going to get it for 10 cents on the dollar - or even 50 cents on the dollar. You might get it for 80 cents the dollar, but then you ll have to struggle to find someone who ll pay 83 or 85 cents on the dollar for that same deal. That s why my advice is to eliminate the multi-million dollar stuff unless you already have experience in it. Again, the higher the price of the property, the lower the discounts you will get. On land, for example, you can get discounts of 95%-99% while on houses you get discounts of 50% or more which includes back taxes and liens. That means you might only pay $3,000 - because once you take into consideration the back taxes and liens, you are at 50 cents on the dollar and you get that 50% discount on those properties.

16 Sort the List Here s how to sort the list. Ideally you open it in Microsoft Excel and then you sort the information by the amount of back taxes owed. We have a resource section for this program, for the Flip It Fast Formula Program, and the resource section has information on how to operate Microsoft Excel, how to sort, how to search, and even how to do mail merge and things like that. So I won t be talking a lot about that now. Instead, I m going to refer you to the tutorials that you should study when you re at that point if you re not familiar with how to this in Microsoft Excel. Sort by the amount of back taxes owed, and for tax deed lists you remove every property that has less than $5.000 in back taxes. Why would you want to do that? We are removing everything that has less than $5.000 in back taxes because tax deed auctions usually require several years of back taxes, fees and penalties to accrue.

17 Waiting Period Somebody has to wait (as described in module number one). The investor or the county has to wait at least three years in most states - in some states 5-6 years - but only in few of them is less than that in which case you reduce that threshold for $5.000 down to $ But usually in the tax deed auction world there is a waiting period that the county has to endure until they can take the property and sell it at auction. During that waiting period, a lot of them slap on back taxes, interest, fees, and penalties, so that $1,000 a year in taxes after 3 years easily looks more like $5,000. If 3+ years of back taxes, interest fees and penalties don t add up to more than $5,000, the property probably isn t worth your time. The property is probably only worth a few thousand dollars.

18 Spot Checking I ve come across a lot of these properties. When you sort these lists, you look at it and say: Wow, $5,000 properties, let me take a look at that. And you test me on that. When you get the list, do a little spot check find a property that has $5,000 in back taxes and then go check out what kind of property it is. And chances are that it s somewhere in an unpopulated area, it s a piece of land that s a measuring error, or one that s really narrow, unusable, or something like that. You will want to stay away from that because typically it s garbage. Or it might be a piece of land that is way out in the boonies, that s only worth $5,000. So if it has $5,000 in back taxes then there s no profit margin in the deal. Let me go back so you can read this one more time, and make sure you understand that this is for a tax deed list.

19 Tax Deed List On a tax deed list, we are dealing with properties that have been tax delinquent for multiple years, and a lot of interests, fees and penalties have already accrued. That s why $5,000 is a good, good measurement. Obviously, if you want to do this in a super high-priced area, or in an area like the Northeast where the property taxes are extremely high, then you might up that a little bit. And if you want to do this in a rural area you take those numbers and reduce them a little bit. More than anything, it is a rule of thumb - a guideline for you to follow. Don t follow it blindly, but follow it intelligently.

20 What to Remove in a Tax Lien List Now the next option is if you are in a tax lien state. If you want to do this in a tax lien state with a tax lien list, then remove the following: For tax lien lists remove every property that has less than $1,000 in back taxes. Why would you want to do that? Because tax lien auction properties have only have one year of taxes, fees and interests and penalties accrued. A property that has accrued $1,000 in back taxes in one year is probably worth at least $50,000 or more. Now that s our sweet spot, houses worth $50,000 - $300,000. If you want to operate in an area where the average house costs less, use this number intelligently and adjust downwards. For example if you live in an area that has lots of great mobile homes that are worth less and they only have $300 a year in taxes, then reduce that number. But you are going to get more pieces of land in there the more you reduce the dollar amount. Land typically is worth less than houses, and therefore owes less in property taxes, and so on. The more than you raise that number the more houses you get. But don t raise your upper limit even if you re working in a high-priced area. Uou might live in Beverly Hills and be thinking: Where in the world are there going to be properties for $50,000? Believe me, Los Angeles has them. You might be in Atlanta, Georgia and you might be living in the richest neighborhood, and think $50,000 means that it s a war zone and I don t want to deal with that! You re probably wrong. There are good properties that you can get for $50,000, and you won t even have to go look at them. You can pick them up and flip them right away to somebody else.

21 The Key It might seem difficult at first, but once you get a hang of the filtering and eliminating those records, it is super easy. As a matter of fact, it shouldn t take you more than 5 minutes to do so once you re used to it. In the beginning it might take you minutes, but everything worth doing is worth doing poorly at the beginning - nobody expects you to be perfect the very first time you do this. Keep that in mind. In Germany we have a saying, that when translated means: No master ever fell from heaven. That means that you re not going to be perfect at filtering these lists the very first time. You ve got to do this and it will take you 20 minutes or so or perhaps even half an hour and then the second time is going to take you 20 minutes, and the third time ten but soon you will have it down and will see how quick sorting and filtering can be. I have had a 100% success rate since figuring this out. This is absolutely my personal experience, and the people that have followed this to the dot can probably agree with me.

22 How to get Delinquent Tax Roll List The master list, the biggest list, is the one that is most difficult to get but is worth the effort. It s called the Delinquent Tax Roll. We talked about it extensively in the last module - but how do you get that list? Here s how you go about it: contact the County Tax Collector Office, or even better, you call the county and ask for the Country Information Technology Department. Information Technology abbreviated is IT, you call the county IT Department and ask them for the list of all property owners who haven t paid the property taxes. Use the phrase Delinquent Tax Roll when you ask for that, because often that will make them understand what you re asking for. However, sometimes the county official still doesn t understand. If you re talking to the Information Technology department they usually understand because they have a different frame of mind than the regular county employees, but if you re just talking to someone in the front office of the county, chances are that they will not know what you re talking about. If they don t have a clue what you are looking for - what you want from them or what you want them to do - then tell them that you want them to the following: you want them to do an extract of all property owners, selecting all records that indicate that the owner has not paid property taxes. I would suggest you write this down and have this ready when you call the county to get the Delinquent Tax Roll. Ask them to do a database extract of all property owners, selecting all records that indicate that the owners have not paid property taxes. Now if you tell this to an IT guy, he will know what you are asking about. I am 100% sure of that. I have never had it happen that when I asked they ve told me that they couldn t help me. IT guys are have always been able to help me. If this is in a Tax Lien state, right away add the following: It doesn t matter if the Tax Lien Investor bought a tax lien, what matters to me is if the owner has not paid property taxes. Because sometimes when you ask that in a Tax Lien state what they re going to tell you that, Well, we have no delinquent properties because all of our tax liens are sold and therefore as far as we are concerned we have all the money that we needed to get. And while that is true, while they did sell all their tax liens (meaning the investors paid them the money and the county is now fully funded and has all the money that they were missing), this is not what you want. You will say It doesn t matter to me if somebody bought the tax lien, what matters to me is if the owner has not paid the property taxes. That s what matters. At this point, they should understand. If you are dealing with an IT guy, he should understand it by now.

23 Walk-through Conversation But if you are dealing with others, they still, even at this point, might not understand what you re looking for, so in that case, if they still don t understand, we are going to go one step further. This is literally walking you through the exact conversation that you will have with them. Here is the thing that you ask of them. You ask them the following questions: When someone doesn t pay their property taxes, you know about it, right? That s what you ask them. The county person will answer back to you: Yes, that s true. If somebody hasn t paid the property taxes, we know about it. Then you say, or if they say No, you say: OK, you know about it because the county sends them a letter asking them to pay up, doesn t it? Then they will say: Well, yeah. That s true. We send them a letter saying that they need to pay. If they say yes to that, now you move on and say: Ok, How did the county get that extract of all people who owed property taxes so they could send that letter out? The county or the person will then say: Oh, well, I don t know, but, Judy deals with that. Or, they say, Well, the IT department ran it for us And in this case you say: Ok, let me talk to your IT department. Or, if they say: Well, Denise or Sandy or Marjorie does that, or whoever is in charge of the delinquent department. Then say: Great. Can I speak with Denise or Sandy or Marjorie? Ask to be connected to that person that they just helped you find. Once talking to that person, you repeat what we just talked about. Exactly. Read this section again if you need to. Once you have your person on the line, you will again say Hi, I am looking to get a list of the delinquent tax roll, basically a list of all the properties that have not paid their property taxes, irrespective of whether or not there is a tax lien or not, irrespective of whether or not they are coming up for tax deed auction or not, whether they have 1, 2, 3, 4, 5 years back taxes. Doesn t matter as long as the owner here is the key thing to say-- as long as the owner has not paid the property taxes, I want to know about that.

24 Then they usually say, Oh yes, I know what you want to have Then they tell you It s $50, and I can get it to you as soon as I have the check. Great. Or, they transfer you to yet another person, who finally is the person that actually runs the report/extract for you. In this case, you repeat again what you want, you might rewind the video again to really memorize that, and he/she will know exactly what you need. Again, I ve never yet come across an IT person who didn t know what in the world I was talking about.

25 SOLUTION Delinquent Tax Roll And then they will ask you what fields do you want in that report, and that s a key question. So, if it s a custom list it should include the following fields/columns: Parcel number Property address, if available Owner name Owner mailing address, city, state, zip Assessed value of property Size of property What s it used for (Use code) (Residential, Mobile home, Land, Commercial, Industrial, etc.) Amount of back taxes owed, and if you can Number of years delinquent (Or often they will give you the actual amount owed for each year. Example: one column says ,443; 2011: $1,332; 2012: $1,123; 2013: $1,025, and so on) It s a different amount of taxes they owed for every single year. And then you go add it up yourself. But they can give you that information either in a cumulative amount, what is the total amount owed, or, in some shape of form they can give you an information of how many years this properties are delinquent. And then, they want to give you, The legal description of the property. You will need that when you actually go and sign up for a contract. The property address, street, city, state, zip. This is really important because we are dealing with houses you want to know where these houses are located

26 What list is Best? Delinquent Tax Roll Once you get this, you are ready to roll. Let s see if we can decide which list is best. You already know which list is best, but I want to make sure that you really understand the distinctions between those lists, because this is what will get you a lot of money. Each list has their pros and cons as you see, but if I can choose I always go for the DELINQUENT TAX ROLL, because of the following reasons: It includes everything you possibly want In a tax deed state, It includes properties coming up for AUCTION It includes properties that are 1, 2, 3, 4 years delinquent, there are even also properties that are 1,2,3,4 years from coming up from the auction or 1,2,3,4 months from coming for the auction Once you get beyond to what s being published right now, once you get to the ones that have few months coming up before they go up for an auction, once you go to the ones that have year or two still from going up to auction, now you are dealing with the kind of properties you don t have to rush for anymore. You don t have to get the letter out the day you get the list. Obviously it s always helpful to not wait around, but you don t have to rush. The delinquent tax roll works in both Tax Lien and Tax Deed states. It works all over the United States. Because all over the United States there are properties where the owners haven t paid property taxes.

27 Tax Deed List Pros I also love the Tax Deed Lists because: They are easy to get, The people who own the properties are freaked out, they want to get rid of their properties ASAP, they can t wait anymore, they absolutely want to get rid of their properties right there and then, and because they only have like three weeks left before the property is gone and they get nothing in exchange, They love you for taking the burden of ownership off their shoulders, They get cash for the property instead of getting nothing, The list is small so getting mailing addresses manually is not a big deal. Because even though if they are missing, if you got to get a 100 mailing addresses, I tell you, for a 100 it takes about an hour. If you have a list of 100, in an hour you are ready to send out those letters!

28 Tax Lien List Pros and Cons Then there are the Tax Lien Lists. The Tax Lien lists are also OK, but not the greatest, mainly because: They only have young liens, as I call them, meaning the property owners still have years before their property can get foreclosed on. So there is not much urgency to act. You can circumvent that, as I told you earlier, by sending multiple letters and postcards, but at the same time it is more effort to go and get those.

29 Tax Lien Certificate States But again, Tax lien states are still great. In some circumstances, I actually prefer them over tax deed states. Now not tax lien lists vs. tax deed lists, I am talking about tax lien certificate states. States like Illinois, states like Florida, states like Arizona. There are lots of them; they are out there. We actually have a guide - an overview in the resources section of this module that shows you which state operates under what premises: tax lien or tax deed states. The reason why I like Tax Lien states is that most Tax Investors attention is actually on Tax Deed states and, being the eternal contrarian, you always want to go where other people aren t going because there are better deals there. Nobody wants to fish in a pond where there are a 100 other fishermen. Go to the pond that s empty, that nobody knows about and fish there - and you will get the prize fish. That s what we are talking about here. Most Tax Investors attentions are only on Tax Deed Sales is because Tax Deed Sales are sexy. What I mean by that is that people go and get lists of the auction that are coming up, go attend this auction, they hope that they will get deals there. Whether or not they get the deals is another question, but the auctions are considered sexy. Investors hope that they can get a $100,000 house for $30,000 and brag about it to their friends. Even if they have figured out that they can go directly to the owners, which most haven t, they only do it on tax deed lists in tax deed states. They try to get a hold of them just days before the auction and buy the properties directly from them.

30 Summing Up But, in both Tax Lien and Tax Deed states nobody even knows that you can get the list of ALL delinquent people and all delinquent properties and contact the owners directly. And that works in both tax lien and tax deed states. While the Tax Lien lists are not the best lists, the Delinquent Tax Roll in a Tax Lien state is an amazing list to get. And also it s the same list in the tax deed states. Don t get me wrong, I love tax lien states, I love tax deed states, but the goal is to get yourself a great list.

31 Sample Deal Ok, let s look at another deal that one of our students did. He sent out 23 letters and he got this deal out of it: Bought the property for $70,170 o $65,000 of that was owed in back taxes, so therefore, o The seller only got $5,000 of this transaction. He literally flipped this condo in literally 4 hours for $95,091 And the profit made in the process was $24, Now again, if you want to see some proof, here is the HUD statement, and right there you see it again, $24, to him. In this case, he had put it under contract so he became the buyer of the property, and then by immediately flipping it he also became the seller of the property. In this entire transaction, so therefore it says $24, to the seller. And the seller is a student of mine. And in this entire transaction, he did not need any money, he did not need any credit, he didn t even need to put an escrow payment down, he just got the deal done by finding the deal, putting it under contract, and flipping it and finding a buyer, and the buyer came with a full $ to the closing desk. That s the beauty of it, and the source of this was exactly one of the lists that we just talked about.

32 Conclusion This concludes module 2. In module 3 we re going to talk about how to get the letter out the door and how to get these super-motivated sellers to call you. See you there!