Dive Into Tax Lien Investing with Cynthia Spirlin

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Hey everybody, Scott Carson here. Just want to say thank you again for listening to the podcast. If you've been listening for a while, you're subscribed to the podcast. First of all, thank you. Second of all, hey, you know, if you're you're not one of our coaching students or you haven't signed up for one of our three day workshops, here's an opportunity for you. You want to check out our WCN membership. This is the biggest bang for the buck of the notice street. Besides our one on one coaching, this is our monthly membership for 97amonth that gives you access to all of our online training, our virtual workshops, our note weekends, our special one day master classes that we've taught in the past, anything that we have going in the future, as long as you're a live member, if I can't make you or save you $97 a month, I'm doing something wrong. But save you paying 997 or 99 bucks or 399 here or anything like that. We make it affordable at $97 a month and like I said, it gives you access to all of our past replays, our upcoming classes, our access to our special classes. We also do weekly coaching calls with our WC members and also our WC members also get first crack at tapes and lists of notes that we get in after our one on one coach to take a look at them. But it's a great way for you to go. You can also schedule call with me anytime to go through deals that you're working on marketing things, questions you got going on about a deal. We're here to help you. So how do you get signed up for that? Really easy. Just go to noteumbrella.com that's noteumbrella.com get signed up there for you 97amonth guys. Like I said, biggest bang for the buck of the nursery and we want seeds of the family. So let's get you signed up today. That's knownumbrella.com welcome to the no family everybody and thank you for always for listening. Good morning, good afternoon and good evening everybody. Hey, welcome to this episode of the Note Pleasure Show. As always, Scott Carson excited and Jacked up to have you on here today with me. We've got a very special guest. Now, one of the great things that I love is the sense when you've done so many episodes over the years, I like to look back and see with the different episodes of what you guys have liked. And at the end of the year, I'm always looking, hey, how can I revisit that content? Because you tell me I like it by downloading and listening to it. And you wanted to get more information about tax lien investing and that kind of stuff. And so I was like, I got to have somebody on here. And lo and behold, just I'm doing the numbers. What pops up? A tax lien investing expert that I reached out to and I'm so excited to have her on today. Now. She is a rock star at what she does. She is got a big heart. You can just know that from talking with her and visiting with her for a few minutes and seeing how she does. She's had an amazing community. Who am I talking about? She's worked in the real estate industry for 20 years getting experience in drafting contracts, negotiating short sales, which is big passion of mine and buying pre foreclosure properties. She's just passionate about helping women create wealth through real estate. She's a single parent, those of you out there. So she understands the need to provide for today's and the desire to leave a legacy for your kids. I'm talking about the rock star. She's the head of the tax L mastermind, Cynthia Spearland. And we're so honored to have Cynthia on here today. What is going on? Cynthia, how are you doing today?

I am doing great. It's a new day. It's a new year and I'm ready for it. So thanks for having me on the show today.

Hey, honored to have you on here. Definitely know our audience is going to eat this up for you out there. Now it's you mentioned something when we were talking beforehand how you like to plan like three months out, you know, starting in like October, looking towards 20, 24. I'm the same way. I'm like, give me September, October, make the year a 15 month year versus just a 12 month so I can hit my goals. What are some before we dive into your backstory, what are some of your big goals for the year?

My big goal for this year is to get into notes. I want, I have an idea to combine notes and tax liens. So going to take it up a little notch, revit it up a little bit and see what we can do with that?

Well, awesome, you're in the right spot here. But they do work so well hand in hand because I get a lot of folks when I, people ask me what I do, I say, well, I'm a note investor. I buy distressed debt. Oh, you like tax liens? Well, yes, but a little bit differently. So for those of those out there, can you kind of, let's just take, take it down to a fourth grade level. Can you explain what tax lien investing is and how it's a little bit different from your buying the property?

Sure, yeah. Even though I have been investing for many years, I hadn't explored tax liens at all. But after the crash in 2010, I said, how can I invest more safely? And that led to me discovering tax liens. And in fact, banks invest heavily in tax liens. And so as a for pre foreclosure investor, I was always following the banks and now it's like, okay, let's be like the bank instead of, you know, doing it the other way. So simply, simply a tax lien is where someone, a homeowner, a property owner, because it could be land, so doesn't necessarily, not really a homeowner, but a property owner fails to pay their taxes. And so at their period of time, they contact them over and over again and say, hey, hello, hello, hello, is anyone there? You need to pay your taxes. Because they need the tax money to run the county, to pay for the firemen, the policemen, the library, all those things. It comes from the taxes, the school district. So when they don't do it, then by law they're able to sell that paper, that debt. And so it becomes a lien on the property. And the lien exists the whole time the, the county, the state, that within the jurisdiction, the boundaries of the state, they own the property first. And so they're just allowing us the, the property to build a home there and use it in a certain way as prescribed by the county. So at that point the law says that they can sell your home and so they give you adequate notice and then they put it up on a list. And investors, they count on them to come and buy the tax liens, a high interest rate. So that's the exchange. Sometimes it could be 12%, 16%, 18%, 25%. So for someone that wants to have a good safe investment with a high return compared to a CD or other investment tools, that's the, that's the catch. Now for years and years, you have to be there live and in person. But now with technology, you can buy tax liens across the country from the comfort of your home or office. So that's really great. Now though, some states have what's called a redemption period. So they give the homeowner the opportunity to get their house in order and pay that debt. Now nice thing for the investor, they don't have to talk to the homeowner or listen to why or what for. They go only back to the tax collector. They pay the money to the tax collector and then the money goes back to the investor and it's clean. You could work another job, you could be on vacation, on a cruise, whatever, and the money comes rolling in with it with that. So that's pretty much how it works. Now if they don't pay the money that they owe on this lien, then they forfeit the property. And so then the homeowner can take the following steps to put the title of the property in their name. So it's advisable.

You mean the lien holder, not the homeowner? Right. The lien holder puts the lean.

The lien holder can. Yes, correct. The lien holder can go and put the retitle the property in their name through a proper channels and procedures that allow for by law.

Now how'd you get into this? I mean it's not the most, you know, it's not the same thing as like oh hey, you're not seeing a lot of people on TV. You know, for $5 I bought this house or you know, the Carlton sheets of the days or the all the other stuff out there or the flip this house, the fictional TV shows that we see on. How did you get into being a tax lien investor?

Well, it was a long road to becoming a tax lien Investor. It started 100 years ago actually. It seems like it's been a long time, but I love what I do. But it has been a long road. When I was a kid, my parents got some property and they were both hard working with their own businesses. My mom was a daycare provider and my dad was a barber and they were just making ends meet. But then they fell into the opportunity of a lifetime and they acquired some property on a creative arrangement. It was seller financed and, and so my dad pulled money out of the cash value from insurance policy, got the property and then I saw three storefronts and single family home turned into a cash machine just printing money every month, month after month. So I said dad, why don't you do this again? And he said oh no, I don't like Being a landlord, I'm like, are you joking? You're going to keep being, well, not like in landlording, to keeping you from making like some more money. Three more doors, you know what I'm saying? Four more doors. So I said, when I grow up, I'm going to do it at least 10 times. I'm going to buy at least 10 properties. So long story short, time pass. And I, I didn't do it. I saw the, those infomercials and I would go to seminars on the weekends and I would go back and tell my friends, did you know you can do X, Y and Z with real estate? They're like, oh, that's not for real. That's, that's not, that's not going to happen. I'm like, but what if it could? So anyway, years later, I accidentally bumped in while networking at a real estate conference. This guy said, you know, it's easy. Why are you going to work every day? You should be doing this business. You're so passionate about it. Because I talked about it, but I never took action on it. Like a lot of people, right, Scott?

Right.

So, so he kind of tricked me into it. I came home and there was a message on my machine and there was another one and another one and they were saying, hi, my name is so and so and I have X thousands of dollars and I'm looking in this zip code, so please call me if you find a house because I've got cash but really bad credit. And I thought, well, this is weird. So I mentioned to him, I said, hey, I'm getting these phone calls and messages. What? Isn't that weird? He goes, oh no, sorry, I forgot to tell you. I put a, I put an ad in the paper with your number and I told people if they want to buy a home in this area, you know, to call and leave a message on that number because I was working full time. And then he had an ad that said, if you want to sell your property, call me. I, I'm a buyer. And then at night, work full time, pick my daughter from preschool. And then we go out from six to nine every night, Monday through Friday, looking for a foreclosure to buy. Well, we found one. And with that system, within 30 days we had acquired a property and flipped it for 50,000. Our expense was 10,000. He took 20 and I took 20 and I never looked back. I became a full time real estate investor.

That's awesome. I love that story. The unknown phone call. Oh, hey, I just happened to forget to. But that's such an awesome, I know exactly who does that, but that's such an awesome, awesome story out there. Now you, you went to law school too, right? You got your, you got, you became an attorney and working for the government too, I think you mentioned too.

Yeah, yeah. So my parents were self employed and they thought it was a terrible lot in life that they had been dealt to make all this money on their own terms. You know, they were forced into it, but they said for you, you go to school and get a good education. So I, I went to usc and after I graduated, so I worked in the family business when I was growing up as a kid because my mom had the daycare. And so then I graduated, I got my first job working for the Department of Defense. And I loved it, loved it, loved it. It was contracts and we're talking to people. I learned a lot about business because the government would order all kinds of things, you know, windshield wipers, ball bearings, backpacks, TVs, all kinds of stuff. And I would go and talk to the manufacturers and ask them were they going to be on schedule and if not, I would amend the contract and that type of thing. So it was a great job. And, but I left, I said, well, listen to my boss. I said, I'm going to be leaving because I'm going to law school. And he said, no one leaves the government. What do you mean you're going to take a, you're going to go to college? And I said, no, no, this isn't for me. I'm going to law school. I had decided when I was 13 to be a lawyer. Well, not to practice law. I was interested in politics. I wanted to be a senator for the state of California. That was my big dream. But after attending law school, I loved law school, absolutely loved it. I got the highest grade in contract law to 500 students. I clerked for a 9th Circuit Court judge, Warren J. Ferguson. And it was just a great, great experience. I learned a lot. I, my friends to this day are from law school because it was studying all the time. I mean, it was a job, more than a job. I studied and studied and studied.

So how did that prepare you for being a real estate investor? Most people would think, oh, you know, I get it, it's good to have an attorney to look at contracts, stuff like that. But I'm sure there's other things that has really helped you with what you're doing now, huh?

Well, I think it gave me a filter, a way to look at, you know, properties in a different way. Naturally, on a conservative side, I was always looking for how to mitigate loss. And so that's when I fell into the short sales because one of the processes that we would use in acquiring the pre foreclosure property at that time, around 2000 when the dot com burst happened, the bubble burst, a lot of people had just bought homes so they were still 90% loan to value. And in the Carlton Sheets days, you would look for properties that had equity in them and if they didn't have equity, you would walk away. So we had a pre fl. We had a, a lot of homes that we could work with because we were saying, yes, I know you only have 90% or 95%, you know, or 5%, 10% equity in the property. Not very much, but we'll still help you. So then we'd get the house under contract, contact the bank. And so I would talk to the bank every day, all day, saying, you know, this is the property, we're interested in buying it, but we need to work something out to do, put some money back on the table. And so my best, best property was a property that was worth about 750,000. The debt on there was 6:50 and the, the first was owed 550,000. And we were able to talk him down and negotiate to 350.

Wow.

And so they, yeah, they said, you know, no, why would we do that? Well, in this particular case it was a duplex and it was a young couple, they had one child and they wanted to bring, make the duplex into one large home. And so he had taken everything apart. The floor was all been removed, the toilets was removed on one side and all these things. He had started taking apart the house and you could tell he had good intentions because he had about 60, $70,000 worth of materials to, for building. But he, he lost his job and everything went with that job. He couldn't replace it and he was in a terrible way. So the second took from 80,000 down to 5,000, wrote them a check for 5,000. They removed the lien from the second. The first went from 550 down to 350. So we sold the house for, for five hundred and fifty to a contractor. Then he took it the next level, did the rehab and then sold it for that. So you know, that's, that was a great one. That was a great one I think, you know, so it's being able to make the argument to the bank, you know, my law, I, I teach people to do it, the short sale side of it. And you Know how to do it, of course, too. But I would really make a case for why we could, you know, we should have the lower price. And so I was doing so many short sales. I would give people wedding gift, they'd say, we're getting married and we found this house. Can you do a short sale on it? Okay, sure. $90,000. I hope that's your wedding present.

I love it. That's. That's awesome. I mean, that's the thing is that I think having, you know, being an attorney and negotiators attorney definitely adds a level of expertise to it that the bank takes maybe a little bit more versus just Joe Blow. Sending a letter and being organized and having all your case in place versus just throwing some number against the wall. I think the bank accepts it. Definitely. Definitely helps out there. So how'd you get into the tax lien side of things? And how did you fall into that? From the short sale and the foreclosure side and creative financing side time?

Exactly. That's a good question. So when the crash came in 2008 or so, people were just like, oh, my gosh, this. It was like a, you know, a. Like a. Yeah, just, you know, what do we do now? This has never happened before. I said to my dad, I said, oh, my gosh, do you believe what's happening? And he said, yeah. And I go, what do you mean, yeah? I thought this money was just going to keep coming, keep coming. And. And he go, no, it's a cycle. That's. It's a cycle. So, no, it was foreseeable that this would happen. So now I've, you know, years later, I get it. But at the time, I was in shock, so. But, you know, God is so good. And so at the time, I turned that knowledge about short sales and I flipped it and I helped so many people. So I went to different law firms and I became a consultant. And I'd say, you know, I'm sure a lot of you, like, even if it was a criminal lawyer, I don't care what kind of law you did. You have friends and family and clients that needed help with saving their home. So I would go to law firms and then my name got out, and I would teach their staff, the paralegals, how to use the HAMP program to help people save their homes. And it worked over and over and over again, and it was a. A huge blessing. I. I had a client once, he had taken his house, was paid for, but his partner became ill. So he take. He took a second. I mean a loan out on the house for $100,000. He passed away and he was working, driving a limo in Las Vegas to pay back this loan. But then the market crash and jobs weren't what they were before, so he wasn't able to make payment any longer. And the bank was sending him letters every day, like register letters by the, like, every day, literally saying, you owe us this money, owe us this money. And he said, cynthia, can you help me? Can you help me? And I said, I said, don't worry, I promise, I promise, because it's very simple. And that was the other thing about the law background helping a lot. You have to, if you have the elements of this case to make your case, if you can do abc, whatever they said you had to do, if you could do that, you can keep your home. And so I would tell people, yes, you qualify. And if they did, and I was honest with them and I said, no, you can stay in your home, we can buy you some time to get some money together, some resources to move, but you're not going to get a modification. And people really appreciated that. So it worked beautifully. And, but after the crash and dealing with the banks, they are. So they were kind of, they're, they're, they have shenanigans that the bank place. They, they play games. They really play some games and they're quite an opponent. So if you're trying to get something from the bank, you have to have your ducks in a row. You have to be prepared because they know they wrote the book, it's their book. They're playing by the rules they, they wrote. So you have to be sharp with them. So I said, you know what? I've done this pre foreclosure and short sales and work with the banks for so long, but I don't want to work with such dishonesty. You know, I just couldn't take it anymore. So it was rigged, you know what I mean? So I said, what else can I do? So I just asked the question, what else can I do? So I started reading and talking to people and I had the opportunity to meet a developer. And the developer explained to me about the tax liens and how he had bought property for pennies on the dollar. And then later, years later, if you can wait it just a turn, just money, money, money, money, money, money. So I learned that business and that strategy from him. I said, I'm going to give that a try. So I started looking into it. And everyone would say the same thing because this was like 201314 people were just like, in Vegas, it was a ghost town. You could drive the freeway and not see any cars in front of you because no one had jobs and nothing was going on. So I said, you know, everyone say, I don't have any money to invest. I don't have any money to invest. And I'd say, listen, you can't pass this up. It's real easy. And I explained to them, you can literally buy property for a couple hundred dollars, $300. It doesn't take a lot. Just try to build your confidence up a little bit. So then I started this mastermind group, and we would actually. Then they say, okay, well, I want to buy some property in Las Vegas. And I'm like, that's the only thing I've learned. And I tell people when they're investing, it's difficult to compete with the bank and the hedge funds in the major city. So we went to, like, Las Vegas, Clark county, to an auction. And there was like, say, for example, the list when it first started, like 80, 90 homes on there and different properties. And by the time the sale came, the actual date of the auction, there was only like 30 properties because they had, you know, saved them from foreclosure, save them from the auction.

The banks. And the banks, too, being in the lending side, the banks are notified also that the taxes.

Exactly.

And a lot of time, the taxes. The banks will go ahead and pay the taxes to avoid getting wiped out or having their position because, you know, the tax lien's a superior lien to your first lien or your second lien.

In a lot of cases.

So, yeah, you're right. That first list comes out, there's a bunch. And by the time it rolls around in the month, I mean, here in Texas, we have it happen every first Tuesday, you know, is the auctions take place. And that's the same way. There may be 500 properties on the counter, too, but down it gets a little down to 50, 60 in a lot of cases. Just it gets a lot down. And then, of course, you also, if you live in that county, you have to make sure you don't own any property tax to be able to bid on the taxes, too, in a lot of cases.

Very true, very true. But we went to the auction in Clark county that day, and there was one house on there that was listed very affordably at 10,000. It was a starting bid, but it was worth the about 125. So everyone was like, I'm. I'm bidding on that one. And it's like, okay, sure. So anyway, it sold for almost $80,000 at, you know, at the auction. So that's what happens in the auction. But you can go outside of the city and do really well. So like one of my members went over to Nye county after she took the class. It was like maybe April and that July she bid. Starting bid was $800. She won at $2,000 and the property was worth $25,000.

Wow, that's good. Picking it up for, you know, less than about, you know, about 10 cents on the dollar, which is really great. Or less than that stuff, you know.

Yeah, there are.

Do you like to focus on more non judicial states or judicial foreclosure states? Can you talk a little bit about the different states that you and your students are buying stuff in?

Yeah, yeah, we focus on the Southeast. So Alabama is a favorite of mine because a lot of opportunity is in a lot Alabama. But there's an attorney there that I work with and so he leads education there. It's called the Atlas Group. And so the nice thing about doing business there and buying tax liens was that there are already investors that you can collaborate with. So instead of, you know, having to learn, you know, everything yourself about a particular state, you can actually learn. You can go there and learn. They can, you can go to some of their meetings online and then like they're just buying them all the time. So there's just opportunity galore. The prices are right. You can, you know, buy a tax lien for under $1,000 and the property is worth, you know, 30, 50, you know, $80,000. So it's just opportunities there. Georgia a lot to have to be in person for Georgia. Florida has a lot online, so that's a great place to invest. They have the lien and separate, you know, tax deed sales. So it, it, that's the combination. So I really like Florida a lot of. And Texas is great too. I haven't had a lot of experience there personally, but because I just favor, you know, Florida. Alabama, yeah.

There's other, you know, nothing. I mean, that's too, I mean Texas, like you said, it's very competitive because we do have such fast foreclosures here. Alabama is great because you've got a one year redemption period. If you're the, if you hear the bank foreclosing, you've got to wait. But that works. Well, kind of like what kind of interest rates are they painted in the different states? You mean, you talk about Alabama. Florida.

Yeah, yeah, Alabama. They did something really interesting around 2020 they actually lowered their interest rate and. Yeah, yeah.

What was it at and where did it go to?

It was 12% and they took it down to 8.

Okay, so that's now and explain that. That's a, that's if you buy a tax, tax lien and the guy pays, the borrower pays you back immediately. You still get a year full of interest though, correct? Is it not. It's not like a month of it. It's the full year, right?

No, so it's by the, the month. So it's a percent. Yeah. So in order to get the full 12% or the full amount, it has to go for the whole year. Otherwise it's on a monthly basis. So that 16% or list for ease, 12% interest, you know, you're earning 1% a month. Yeah, but this still better than the bank Y. Yeah.

The certificate's a disappointment for sure.

Yeah, yeah, it is. Some places have like penalties, so it'll be the interest rate and the penalty. But for the most part it you really kind of wanted to go the full term of, you know, the longer it goes. For example, in Arizona they have 16%. So when you're at the auction and you're bidding, it's a bid down. So sometimes if someone really wants a property they could save for, that is a three year redemption period. So the first year they're bidding for that, they could say 2% or 0%. So they don't own any interest until year two. So but the, the person, the homeowner, they still have to pay that percentage to 16%. So for the first year you're splitting that with the county. So if you set zero, the county is getting the entire percentage for that first period. And then if you said 8%, you know, you're splitting it with the, the county, they still have to pay the full 16%.

Wow, that's interesting. That that was in Arizona that does that.

Yeah.

Wow. Okay.

Yeah. So like I have a lady, we, we caravanned over to Mojave County, Arizona and she bought three tax liens for 330, $350 a piece of. And one of them was redeemed. The other three were not redeemed after the three years. Now keep in mind, during that time period, while you are in that redemption period, if they don't pay their taxes, you have to pay the taxes during that time. So there are some costs that can, you know, follow during that period of time. But they didn't redeem the property. So both of those properties, they were mobile Home lots and they were worth 15,000 a piece. So that 350 times 2, $700, you know, turned into $30,000.

That's a pretty good deal. You know, and that's, that's the great thing about it is once you're buying this, you're going to get paid something. Usually whether it's an interest rate or you end up taking the asset back, it's just a matter of finding deals. And it comes from just looking at a lot of stuff. You know, what would you say for somebody, I mean, a good starting point. Is it sticking is researching the tax laws in their state? I mean, there's 50 states out there. What would you recommend for folks to kind of identify as opportunities or places to look for stuff?

What I find with the members is they're able to buy where they have a history or some experience. Like, for example, they lived in Florida or they have relatives in a Louisiana or something. So they have a familiarity with the place and understand the values and what the people are like there. So that gives them a comfort level to invest where they've been or what they'd like to go. So some people invest in Florida because they'd like to go there and write it off on their taxes.

Right? That's definitely truth. Who doesn't like going down to the Sunshine State there and stuff like that? But you're right. I mean, their foreclosures are all online, so you can literally just log in and, and see what's been at. Yep.

Yeah, yeah, exactly. So, and like RealAuction.com they have, you know, training, so you can call their 800 number or, you know, or sign up on their website. And as a sale is approaching, they'll offer class on, you know, how to use the platform to bid and things like that.

Awesome. Tell me about your mastermind. So you were what, how did that start? How'd that come around? How's that working?

Well, it started in a library. You know, I, I talked to some people and the first group, it was six. And they said, yeah, it was a realtor, a nurse, the nurse's husband, you know, just started like that. And so they're like, yeah, I really want to learn more about this because no one talks about it right more now than they did, you know, several years ago. And so it wasn't enough just to understand it. So the, the mastermind really came about. So I would make it fun. I did really far out funky things with mine. I'm just like. Because they're just like, what is this. So I'd say let's do tax lien and tequila and so. Tax lien, right. So this is before COVID and we in Vegas, there's so many great restaurants and everything. So we'd meet on a Tuesday at a Mexican restaurant. And I have like 30 people that would come. So some of them were the members and some people were just curious about tax liens and some people just like tequila. So it was, it was, it was.

A, A marriage made in tequila heaven then for that, right?

Yeah. So we had fun. And. But it's really about, you know, having that community where, you know, what's really fun about it is you have to buy. So and then because that's, you know, make that transition transformation from just like I'm thinking about it, I wish I was an investor. I am a tax lien investor for 100, 200, $300. Right. But the interesting thing is, like, we'll come together and we'll talk and sit at a table. So I do like study hall. So we're just like, let's talk about what you learned. Let's go and play around and look at what it's like to go onto this platform or that platform. But people have different experiences. So like, the realtor sees property a different way, the pilot sees things differently. And so we'll talk about the land and the, you know, looking at the mapping of what's going on with this and the neighboring property and what, you know, easements and what could be going on here. So that's the fun part about it.

Awesome. Are there any, like, since you've got different people looking at different things or any like, hard and fast rules you apply to, like, if it's in a such a small ass town, don't buy it. Or if it's on a piece of property you don't want to take back, don't buy. Are there any, like, guidelines for your due diligence aspect that you really tell people to stick by?

Yeah. So a lot of times people don't talk about this, but when I worked with the developer, I learned to really do your homework by talking. Don't be afraid to call the different departments. So, you know, you don't have to know everything. You don't assume anything. So you want to call the experts, call the building and zoning and say, what's the zoning for this property? What's the forecast? Are they thinking of changing this from, you know, like a residential or agricultural? Is it going to go into like a business park? Because sometimes a county will Change a whole area and they'll grandfather in certain parts and certain parts will be required as soon as they sell to go into something else. So you want to call the zoning department. Another thing you want to look at too is the economic planning. So most cities have that report online now and you can see what is the plan for the city. Are there jobs, you know, coming here? So like in Alabama, you might not know what's reading the newspaper. You don't know what's going on there. So like, there's a city called Bessemer, Alabama, and it's a great place to buy.

It's a great little hot city here.

Dollar generals move there, Amazon. So when you see that kind of thing, you say, okay, this is going to attract people. And so I, it might be nothing now, but someone's going to want this land or this lot, you know, so those are little. And the other thing we do is call the, the, the tax office where the liens are, and they're so helpful and they'll answer your questions and. Because you know who calls about a tax link.

Right.

So, yeah, so we'll do that in the group and, and people can listen to the conversation about what's happening with the cell coming up and different advice from the lean. They don't, you know, so it's, it's really helpful. But I would say two things that you never hear about as the call the building and zoning. And also look at the economic development for the city as well and limit to just two or three places that you want to buy. Don't get comfortable because every place is different and the laws change. The other thing I always advise is read the rules, even if you bought their last time, make sure that nothing's changed in the interim. That's important too.

Yeah. Because every state's a little bit different too, and how they hold their auctions to. Some do it daily, some do it like once a month. Some also just do it like once a year to different places.

Yes, yes. Right. And so the other thing too is you want to check and see if they're available over the counter. So after the auction, I like to buy them over the counter. People say, oh, it's just junk left over. Well, not necessarily, but that's why you do your due diligence to confirm and verify. But like for example, in Arizona, when you go to the live auction, it's bid down, but the day after, the month after you go, and you want to buy a tax lien over the counter, it's for the full 16%. And you didn't have to compete against anyone.

And it doesn't matter. A lot of things fall through because people aren't. Are only looking at specific aspects of it. Is every state required you to have cash in hand or is it partial payment of the tax lien and so. Or is it wiring funds? How's this?

Yeah.

How do you pay for the, these tax liens?

You have to read the rules for how they want that because there's a registration, you have to pay so much to bid and then they'll tell you, you know, like you might not have to pay for, you know, like 48 hours or you have 24 hours to come with the difference. So I know the first time my students registered for that live Clark county, option one girl, she was in the line to register Ford, and she's like, I'm in line. I'm so excited. We're on the phone, right? And so she got to the front and she's like, oh, no, I've been in line for like 30 minutes now. Because she got there early to avoid the crowd, right? And she planned to write a check. And I said, did you read the rules? Oh, I said, okay. So the lady told her, you, no, you have to go get a cashier's check and come back. And so she had to leave as she waited that time because she didn't read the rules, right? You have to read the rules. They have, you know, and they'll tell you if you don't bid or if you don't win on your bid, how you can, you'll. How they'll return the money to you as well. So things are different now. So. But no matter what, you have to read the rules. And that's why people, that's why people, you know, really kind of shy away from tax lien and tax deed investing because they don't want to do all that reading.

But that's, that's everywhere. I don't know about you, but I think people have gotten so dang lazy, you know, just spoon feed me. What do I have to do? I had a guy called me the other day, one talk about vesting. Been a loan officer for like 20 years and he's out of work. And I'm like, well, if you want note vesting, you know, you got to do a little bit of marketing. You got to do the. Oh, that sounds like too much work. I'm like, what else are you going to do? I don't know, but I don't want to do that. I don't want to spend any money. I'm like, well then you're just going to sit there and keep filing unemployment. But that's the thing is there's so many of these little things like that out there where you can find amazing deals, great returns, not a huge amount of money. But you got to get outside your comfort zone. I know, you know, people think, when they think real estate investing, they think you got to have a half million dollars because you live in a half million dollar house. So you don't understand the facet that you know, like some of these counties, you only put up a little bit and you've got a time frame to get the rest of the money or you got, you've got to have cashiers check here in Texas, you got to show up with cashier's check for the whole thing immediately. Yeah, they don't play, they don't play around here. Yeah, but you're, you're so right that, that tip of over the counter of stuff that didn't sell, didn't get auctioned off, that the county had to take back, That's a phenomenal tip for folks to take a look at and see what, what's available to them.

Right. So you just call the county and ask do they offer liens after the sale? And yes or no. But if they do, then that gives you time to do your research. You can. And the other thing too, like you were saying, where do people the comfort zone? Some people, well, I don't want to buy outside of California. So it's like, okay, that's going to really slow down your ability to participate because I mean, if it's only $300, I mean, you know that a lot of people waste 300amonth on something.

Yeah, that's a dinner, that's a, that's a half decent dinner for a family of four.

Yep.

Beforehand a little bit of how things got expensive. But yeah, I mean it's all, it's all relevant. And that's the thing to realize. I mean if you think back, you know, is there any big mistakes you've seen people make when it comes to buying tax off the tax liens?

Well, there, there is a concern. I haven't experienced it in our group or myself, but I did read a case where it was a tax lien and a company in Arizona had bought some property or a lien in Philadelphia. Okay. And so the person file bankruptcy. So when you're at the state level, the laws are governed for that jurisdiction like Philadelphia. However, when you file bankruptcy that's federal law. So all any type of collection has to cease and at this any you know it, you just can't ask for money any longer. So the case was brought and the petition by the the investor asking the bankruptcy court to release the property because you know they were expecting that if they didn't get their money they were expecting to have control of the property and the banks, the judge said no, you cannot have preferential treatment because there's other debtors as well that are in line to receive money and the only asset is the property. So if you take the property for yourself that would be unfair to the others. So you can take that. It was a chapter 13. In a chapter 13 they have set limits of the what they can pay. So if they can afford $50, then you receive $50 a month for a period of time and at whatever you get when the that closes, that's all you get. So that was a, that was damaging but I think that was a. I mean, I'm sorry, go ahead.

No, but it's a great example that you got to know what's going on and be be prepared that people do file bankruptcy to avoid foreclosures. And then it's. You've got to petition the court and the they've got come up with a payment plan to be chapter 13 for up to five years. And the plan's got to make. It's got to make sense. Being a lien holder on first liens there's times that we get you know, payment plans kicked out because they just don't make sense. Their normal payments 800 they want to make $50 a month. Like that doesn't make any sense. Yes, just let's work it outside there. But you're right about that. If you're the only ass is the property you've got other glean holders. Yeah, you better be be prepared just to collect a small amount on a monthly basis for five years until everything's worked out. But that's the thing. It's all comes down to due diligence knowing what to look at. So with your due diligence documents, what are some of the things you're looking at obviously besides value of the property, what's on it? Are you pulling any type of title lien search on the asset as well too?

Yeah. So you want to look at the value of the property itself. You want to make sure that the property is there because sometimes the property's not there anymore. And you really can't even verify that with Google recently. One of the members bought a tax lien, a house for $800 and Google said it was there and it was in good condition. But reality, the realtor did a drive by and it was burnt. It had suffered fire damage. So you can't rely on that. You sometimes if you're investing out of state, you might want to, you know, make that extra step to have someone pass by and take a look at it, pick snap a picture of it. The other thing too is title. And so some information. You know, sometimes title isn't up to date, especially since COVID things are getting caught up. But there's there was a time when things were behind. And so as far as title goes, you want to check but call and see if you can find out what people don't think about are utilities that the water. So say for example, you know, subsequent liens or other lanes on the property can go away, but those utility bills will not go away. So if they owe some type of code enforcement where they boarded up the windows or they mowed the lawn, that will have to be paid. If they have a water bill that will all these things stay on. One of the. One of the houses once had a fire bill on there. So they had to pay that fire bill. So yeah, things like that you want to check as much as reasonable. And then the other rule of thumb is just don't invest or more than 25% so you want to keep your bid low, your investment on the low side. So something does pop up that you didn't expect, you know, you'll be able to cover it and still have room margin for to sell the property. The other thing too is prior liens. So you know, you want to look at the tax record and see if the person has done this before where they, you know, maybe their business is cyclical in some sort of way that every so often, you know, they go into the lien situation but they've always paid it off in the past or if they haven't, is there something wrong with the property that another investor put money up and bought this lien in the past and they didn't follow through with, you know, closing the property out and putting it in their name that they find out that the property is not worth it or do they just not have the interest and so they're just going to wait till another investor comes out and buys them out. So you want to look at the tax record, how they paid, their history in the past.

You know, one of the things that is is definitely looking who the borrowers Are we. We had a situation where there was two married couples went in and bought a property.

All right.

And they each took their turn and filed bankruptcy. They never made a payment. And they would, you know, one husband would file bankruptcy, drag it out. Then, then when that was when the, the, you know, statute of limitation was changing the time for that, the other couple would file bankruptcy and they, they drug this thing out for four years and. Yeah, yeah. I'm like, well, that's that check. Never buy a mortgage note on something where there's four borrowers versus just two.

You know, that's good to know.

Yeah. Are there any states you would recommend people avoid when it comes to investing in tax liens?

I have heard that there are some places that are difficult, I don't know off the top of my head, because I just stay in my lane over here, to be perfectly honest. But there are about four states, states that they say, don't waste your time. So I'll, I'll have.

What are those four states?

I don't know.

You're gonna email me. We'll put that in the description there for you. Well, but that's the thing. I mean, that's, you know, every state has tax liens or tax certificates. Some have a redemption period. I always don't have redemption period. You know, sometimes that redemption period is different for an occupancy. I mean, you know, owner occur homestead versus an investment property. I mean, yeah, you know, it's, it's different too. You know, I'm a big believer. Don't buy something that you don't want to end up taking back at some point.

Yeah, that's true.

There was a story about an investment company that bought what they thought was a duplex and instead it was a one foot wide piece of property that ran next to the duplex.

Yes, I heard about that.

I heard, probably heard about that. And they were fighting with the city because it was, it was, it was labeled incorrectly in the, in the city and just said, no, you own that one foot piece wide of property, not the duplex. In a lot of cases, it was a tax lien situation. I also, few years back, we were talking about Hamp and all the things that took place 2008, 2009, there was a. Detroit has a lot of tax liens that don't get paid. All right? And there was one of the guys that owns one of the biggest car dealerships in Detroit, went and bought every tax lien that the city had. Was about six years ago, they only paid like 4 million bucks. It was like $16 million with the tax liens and he got a deal on it and everybody got got up in an uproar about it that he got it such a cheap deal that it was like it was insider thing and like, well, either he was going to pay it or nobody was going to pay it. Which one? You know, just because you think you, you're owed 16 million bucks taxing doesn't mean somebody's going to pay that, you know, and we all know how, how bad Detroit is struggling now. Can you use your self directed ira, you know, your Roth traditional to buy tax liens as well too?

Yes, yes you can. So you know, that's a really good strategy when you're doing the tax lien. So then the money comes back, the interest into your ira. Yeah, you can definitely do that.

What's the most you've ever heard of one of your students paying for tax lien? And what's the cheapest amount somebody's ever paid?

The cheapest one so far is $75.

Wow.

Yes. It's in Surprise, Arizona. It was near a municipal airport. So it's a industrial type area and she's hoping that she will get the little piece of property. It's a small piece of property. And so I always talk about what's your exit strategy? And so she said her exit strategy was to maybe it could be a cell tower or a billboard. So she, you know, she has plans for it on that $75. And then so far the most expensive was probably about $10,000, 7,500 for the lien and that was bought as a secondary. So tax lien investor had already purchased it but they didn't want to take it to the foreclosure part. But it was at the close of closely drawing close to the three year redemption period. So the sold it for 7,500. And then the, the silly people in the home, the occupants were, had inherited, two brothers had inherited the home from their parents and the debt free and they didn't want to pay the taxes. Now where can you live for just the taxes? So Anyway they wanted 2,500 to relocate and so the house is immediately. There was nothing wrong with the house. It was cleaned out and rented within 30 days for a thousand dollars a month. And so now she's decided to list the house for 102,000.

Wow.

So, you know, she's done really well with that. She got her, you know, initial investment back already in the, in the 24 months.

Sure.

And then she contemplated whether it was space to add another unit, so it'd be like a duplex instead. But she's decided to sell it and use the money in a different way. So can you. Investments more actually in investments.

Right. She's pretty happy about that now.

Yeah.

Are you able to pay off the redemption rights? Pay the. The borrowers to go away, pay off, you know, to redeem, you know, to release their redemption rights is what I'm asking.

Yeah. So that if they, you know, because they can fight it and drug it out, you know, so if you want things to, you don't want to have, you know, legal problems and draw, draw the mess, the, the situation out. So if in this case it made sense to go ahead and pay that. Now there's some laws of whether you can approach a homeowner that is in this situation. So some states have laws that prohibit you talking to the homeowner before the auction, you know, so you want to be careful about that. But I, you know, there have been. I actually was able to get a couple notes that were for people that wanted to avoid the auction and so their house is free and clear. Take a mortgage on there. And so that's a nice opportunity as well. So that bills come up sometimes under the right circumstances without, you know, breaking the law.

Right, exactly. Working with them to keep them in their house and they start paying off on the other. Yeah, it's definitely a good thing there for you. So this has been absolutely awesome since we talk all afternoon, but I know you've got places to go and the deals to make happen. What's the best way for our listenership or folks watching this to connect with you to find out more information about what you're doing. And you also teach classes on this still too, correct?

Right, I do. So I have a page on Facebook group called Tax Lien Mastermind, so that's the best place to reach out to me. And then I have Instagram as well. Tax Liens with Cynthia.

Awesome. We'll put those links in the description there for you. Cynthia, thank you so much for coming on the note closer show sharing some of these amazing stories. I learned multiple things on here today, which is always a good thing. I always love to learn and it's good to know that there's still a lot of opportunities. Also good to meet a fellow person who's got a big heart and wants to help people succeed in today's world.

Yeah. Well, thanks for having me. I really enjoyed chatting with you and I, I definitely want to share and let everyone know that they can be a real estate investor regardless of their credit history, their employment status, or how deep their pockets are.

Amen to that. So listen to what Cynthia said, guys and gals out there. Go out, take some action, everybody, and we'll see at the top.

Sam.