Pre-foreclosure Bank and Hedge Fun Tax Lien / Deed sales

Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes

@Jacob Turner Don't know anything about these guys or this company or their previous company. Never heard of any of them. Sounds like they are excellent sellers of guru theory or education.

I always think though if they have this giant lucrative program of how to secretly profit from buying from hedge funds, why don't they just do it. Why do they want to teach you to do it, other than the $350,000 weekend take?

Just heard someone advertise they had an 8figure yearly tax lien/deed/certificate business. I call BS on that. I just don't think that is possible in any state for a lot of different reasons.

I almost always say if you have $35,000 to get into their secret system, go spend that on tax liens/deeds/certifications once you've attended 3 sales and have spent some time studying the process and have a decent understanding of what you are buying and what your exit strategy is. If you buy the education, you still have to have money to invest in their secret sales, so you probably will need another $10-20-$35,000 to get started. If the system or opportunity isn't really there, then your $35,000 is gone. If you use that money instead to actually buy your own, then hopefully you break even or make money on some of it. Even in the worst case scenario, and you loose it all, I think your self education will be a lot better in your specific situation than any of the national education programs will provide you.

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Ned CareyPro Member

Moderator

Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes

3y

@Jacob Turner

“So I wonder, if these pre-foreclosure certificates are available in bulk packages from banks/funds, what are they called? “

They are called a scam. The idea that a tax lien investor of any size would sell a certificate for less than it could be worth as a foreclosure is laughable. It doesn’t happen. When I have been presented packages, they are always crap the the seller is hoping for a greater fool to buy.

“Does any of this seem real, or is my "strategist" full of bologna”

No it is not real. Your strategist is full of something much more distasteful than Balogna.

At 4% interest how much money do you have to invest for how long to recoup your $35k?

4% you ask, but I have been promised 12% and higher? In Baltimore City the starting interest rate is 18%. Our average rate in the last sale was about 5-6%. Many properties were bought at 1-2% or less.

Based on the bids I am seeing, even most foreclosures could be break even at best. If the market drops we could see a bloodbath in the tax lien market.

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Bruce Lynn

Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes

3y

@Jacob Turner Somehow I also doubt any banks are regular investors or maybe even ever investors in tax liens/deeds. If they are it is buy necessity and probably not for investment purposes. I could be wrong, but think that thru. If the lien is worth buying, why don't they just foreclose? This should be pretty rare as most loans require escrow (so they make sure taxes get paid). There are occasionally lenders that don't require escrow, but one of the provisions of the loan is normally to keep taxes and insurance paid. If you don't keep them current, they would probably foreclose.

I don't think there is almost any way banks are regularly investing in liens/deeds/certificates as part of their asset or trading strategy. Way too much work, expense, risk I would think. They have so many other options to park money or buy T-bills, etc.

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Don KonipolBusiness Member

Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

3y

Quote from @Jacob Turner:

Hi all! My first post :)

I'm new to REI and followed the shiny into buying ($390) and attending a goofy 3-day workshop (currently sitting in Day 2 in Danvers, MA) on tax lien buying by TAX LIEN WEALTH BUILDERS, previously known as UNITED TAX LIENS, founded by Jay Drexel, who also built MarketPlacePro.

It's been almost useless, a giant patronizing waste of time (as @John Underwood and @Ned Carey has driven home - don't pay for education you could obtain more quickly and thoroughly on the googs or through networking), but an interesting exercise in appreciating their polished presentations, sales strategies, and trying to understand what these people's actual business model is by reading between the lines of all the shiny idealized and exaggerated examples of rapid wealth generation. I know they are funneling people into their $35k "Diamond Package" coaching/class/blah blah combo, but I was able to ascertain from my "strategist" Rob that this company's inner circle does in fact buy Tax liens/deeds. However, according to him, they have some magic ethereal list of certificates that are about to enter forclosure that they purchase from banks/hedge funds, as the banks/funds do not want to own them once they foreclose because it tips the balance sheet and would be considered a negative asset and would be too much work to liquidate.

Does this make sense at all? He claims he's never been asked about the details of how TLWB acquires this packages of pre-foreclosure certificates, or the agreement they have with the bank/funds, but that they do in fact have monthly packages or certificates up for sale within the group that are purchased from the bank/funds in bulk. The idea being then that the insiders can purchase these certificates, realize the reinstated high interest rate or acquire the property through foreclosure much faster (within days to a month). He says he uses this company's resources pretty exclusively as a property acquisition tool.

So I wonder, if these pre-foreclosure certificates are available in bulk packages from banks/funds, what are they called? Could anyone with enough capital make agreements with the banks/funds to get a rolling offering of these? Does any of this seem real, or is my "strategist" full of bologna and just covering for the slime-ball objective of funnelling rich old ladies life savings or desperate people into taking out giant credit lines (through their partner finance company - Copper Rock Financials) so they can afford the $35k package. I imagine if 10 of the 35-40 people in this room do that, clearing $350k on the weekend is pretty decent. They seemingly host these events every weekend.

Thanks!

Jacob

Thanks Jacob. Very informative. I have no idea if this is real or not, however, I have my suspicions. I can tell you that their program follows the now standard real estate mentorship model promulgated by a few seminar companies out of Las Vegas and Provo, Utah. Real estate is NOT their product, their product is “mentorships” for $35,000.
Colleges are required (if they want to qualify their students for Federal funding) to provide information on the success of their graduates in obtaining employment in the field of study, starting salary information, career advancement. Unless the “educator” in question was able and willing to provide information concerning the number of “graduates”, the number of these who’ve made say 5 deals, and the average income earned, I’d stay far away from spending $35k. Here’s what you typically get for $35K; all your questions are answered by a novice reading from a prepared “answers to questions” manual. The novice answering questions and assigned as your mentor is typically someone who couldn’t make it as a salesperson for the same company.
I have seen one seminar company using this model that I believe was legit; questions were answered personally by the “guru”, he held conference calls with all the mentored 3 time weekly, and he personally answered emails. Also, I have known this “guru” for 20 years through business dealings, and he was successful and still is somewhat active as an investor. Further, he told me his program was to put potential clients in touch with successful graduates to answer questions, and was willing to provide a list of graduates providing both successful and unsuccessful. However, every other program I looked at had a glaring weakness that rendered the program near or completely worthless, if not detrimental.

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Doug SmithPro Member

Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes

3y

Somewhere around 2012, I was approached by a large publishing company that worked with one of our clients, an economist/author, to do a course on non-performing loan buying. I met with them, but they basically wanted me to put together a fund with low-end NPLs and the start teaching a course where, over the course of a weekend in some hotel ballroom, I would teach students how to buy notes. Then, they wanted me to mark-up assets in the fund and sell to my new students...which they use their lists to fill the ballrooms. I felt super-icky and had to shower twice after their pitch to me. I said no thank you and said that I felt like I was leading lambs to slaughter. I've always toyed with getting more into consulting for Private Lending and NPLs, but running this company and "doing" doesn't allow a lot of time for "teaching". I think people that buy a course or sign up with a guru really need to take a hard look at their formal backgrounds. What makes them an expert. "One day while I was working at Starbuck's, I stumbled on the secret to make $1M by this time next week" is obviously not someone I would listen to. I think any boasts of "here's how to make $X or X% returns" is crap. There are legit teachers out there that help people pass licensing exams or set up their business, but any time you're looking at someone that has a resume that makes no sense for what they are doing...scroll past.

6 Reply

Will Sifert

Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes

3y

Quote from @Jacob Turner:

Hi all! My first post :)

I'm new to REI and followed the shiny into buying ($390) and attending a goofy 3-day workshop (currently sitting in Day 2 in Danvers, MA) on tax lien buying by TAX LIEN WEALTH BUILDERS, previously known as UNITED TAX LIENS, founded by Jay Drexel, who also built MarketPlacePro.

It's been almost useless, a giant patronizing waste of time (as @John Underwood and @Ned Carey has driven home - don't pay for education you could obtain more quickly and thoroughly on the googs or through networking), but an interesting exercise in appreciating their polished presentations, sales strategies, and trying to understand what these people's actual business model is by reading between the lines of all the shiny idealized and exaggerated examples of rapid wealth generation. I know they are funneling people into their $35k "Diamond Package" coaching/class/blah blah combo, but I was able to ascertain from my "strategist" Rob that this company's inner circle does in fact buy Tax liens/deeds. However, according to him, they have some magic ethereal list of certificates that are about to enter forclosure that they purchase from banks/hedge funds, as the banks/funds do not want to own them once they foreclose because it tips the balance sheet and would be considered a negative asset and would be too much work to liquidate.

Does this make sense at all? He claims he's never been asked about the details of how TLWB acquires this packages of pre-foreclosure certificates, or the agreement they have with the bank/funds, but that they do in fact have monthly packages or certificates up for sale within the group that are purchased from the bank/funds in bulk. The idea being then that the insiders can purchase these certificates, realize the reinstated high interest rate or acquire the property through foreclosure much faster (within days to a month). He says he uses this company's resources pretty exclusively as a property acquisition tool.

So I wonder, if these pre-foreclosure certificates are available in bulk packages from banks/funds, what are they called? Could anyone with enough capital make agreements with the banks/funds to get a rolling offering of these? Does any of this seem real, or is my "strategist" full of bologna and just covering for the slime-ball objective of funnelling rich old ladies life savings or desperate people into taking out giant credit lines (through their partner finance company - Copper Rock Financials) so they can afford the $35k package. I imagine if 10 of the 35-40 people in this room do that, clearing $350k on the weekend is pretty decent. They seemingly host these events every weekend.

Thanks!

Jacob

I don't know if you can buy them in bulk but some of the larger companies that buy tax liens across the country, they do sell tax liens that are ready for foreclosure. I forget which one, but one of them has a list of all the properties / liens on their website. It's almost all garbage not worth much. I have also seen where the same company, in the same area has gone through the foreclosure process and then sold the property with an agent in the MLS.

The short answer is yes, they do and will sell of some of their liens that did not get redeemed. Yes, their business model is interest and they really do not want the property they want redemptions. But, KNOW they are not giving anything away and they will foreclose on the better properties themselves. Maybe this isn't the case for all of them, but I would say that the majority operate this way.

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Pre-foreclosure Bank and Hedge Fun Tax Lien / Deed sales

Pre-foreclosure Bank and Hedge Fun Tax Lien / Deed sales

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