The Land Geek Podcast #31

Welcome to the Land Geek Podcast, your resource for information and tips to making money by buying and selling land. Let the Land Geek show you how to make a passive income by working smart, not working hard. Learn strategies and tricks to make money buying and selling raw land today. And here's the man that's gonna help you do that. The Land Geek.

Hey, it's Mark Podolski, the lane geek from thelanegeek.com and today I am really just thrilled to get the most trusted tax lien investing authority back on the podcast. Joanne Musa. How are you this morning?

Hey, Mark. I'm good. Thank you for that introduction.

So last time we spoke, we, we were going to discuss secondary tax liens, but you just finished or you were just about to have a conference. How'd that conference go?

Oh, the conference went great. It was in Anaheim, California. We had more than 50 people at the conference and we had a great time and it was right after the REI Expo. So we had a few people come over from the Expo that live in California, and it was good.

That's great. That's great. So what's the biggest difference between west coast investors and east coast investors? Because you're on the east coast and can you tell a big difference. Do they just talk slower? Do they move slower? Do they eat slower?

Actually, I think California and the east coast is a lot alike. They just talk differently. You tell New Yorkers from Californians.

Very politically correct, Joanne. Very politically correct. So, you know my buddy Duran in San Diego, he's like a surfer guy, so I always haze him about that and just like, you know, that lifestyle. So we got a lot to talk about today. Secondary tax liens. I know you and I are going to have a webinar together about the investors toolkit coming up on December 10th, which I'm really excited about.

Right, yeah, me too.

We'll talk about that. And then you have another conference coming up in January, which I think we should talk about. So we've got a lot to get through.

Okay.

All right. So what's a secondary tax lien?

Oh, okay. Well, you know, a lot of people ask me about over the counter tax liens. They want to purchase tax liens from the county because they, they think that's the best way to get the maximum rate, to get the highest rate possible. The problem is that, and you know, some of these experts, some of these tax lien investing gurus are telling people that don't go to the tax sale because it's too competitive. You can get the maximum rate if you just buy the lien directly from the county. But the problem with doing that is that if these, if these tax sales are so competitive, which they are, what makes you think there's anything good left over? Especially since the way a lot of these online sales are done and even some of the live sales that aren't online, they will have their tax sale and then they have another sale which they call a cleanup sale or oh, I forget the name that some of the states use for it. But if it doesn't sell on the first sale, then they'll make everything available that didn't sell on the first sale available in a second sale, a second. And, and, and then after that it goes on the over the counter list. So these liens have been through two sales and if you've ever experienced, for instance, you're in Arizona, right Mark?

Right, right.

Have you ever seen the results of any of those online tax sales?

I have, I have. In fact, I bought property in, in Navajo county, which is Northern Arizona, after the tax. So there, you know, Arizona is a tax lien state and whatever doesn't get sold, you can buy over the counter over tax deed, I believe, or after some amount of time, I'm not exactly sure. But I know that these properties were available after the sale. You could buy over the counter and I bought some back in the day.

Right, right. And back in the day you could do that. Right. But today there's less good stuff on those lists than there used to be.

Because I didn't know what the hell I was doing either, Joanne and I, I bought total junk up there. No, I mean, well, that's what happens.

When people try to buy these over the counter liens. That, that's what happens because basically that is what's left on, on these lists. Because think about it, if there's, if you've been to any of these tax sales lately, you'll know that especially in the online sales, there can, on one property, anything good is going to have a lot of bids on it. So the likelihood of anything good getting into that over the counter list, it's not likely. It does happen once in a while only because sometimes the person who won the bid doesn't pay for it on time. Now if that happens, then it will go back and it will be in the next sale. And you know, once in a while you get a good property on that list. But it's, it's really not a good strategy for the new investor. It's very time intensive because you have to go through that list With a fine tooth comb, you've got to get the list immediately when it comes out because everybody else wants to do the same thing. I'd say it's even more competitive than the tax sales are. So it's not the best strategy. So instead of.

I agree. I don't think I bought anything over the counter in six years.

Okay.

Yeah.

Now, so instead of doing that, here's another way to get property that's ready to foreclose or almost ready to foreclose, and that is to buy it from an investor. Because many investors don't want to be bothered with the foreclosure process. They just want their money. They just. So if the lien goes almost to. Almost the end of the redemption period, they just want their money back. And they'll. Sometimes they're even willing to take a discount on what they would be paid if the lien redeemed. So, for instance, some of the secondary liens that I have on my member site, the agent who bought these for their clients got them at 18%. And that's. They were Illinois liens. So that's 18% per six months.

Okay.

And. And the investor just wants to sell it because they don't want to go through the foreclosure process because you have to, you know, have more money to go through the foreclosure process, and you don't know if the lien is going to redeem or if it's going to foreclose. They don't want to bother with that. They don't want to wind up with the property. They don't want to take a chance of having the property. They just want a return on their money. So they're willing to take 12% a year instead of the 36% a year that was bid, because 18% per six months is 36% a year. And that's a penalty, not an annualized interest rate in Illinois. So they're willing to take a discount on what it would redeem. Now, for the person that's buying the secondary lien, that means they're going to pay the lien amount and they're going to pay 12% a year, which they're not going to get interest on. If the lien redeems, they're going to still get that 18% penalty per six months on the lien amount.

Okay.

Right. When. If the lien redeems. Now, if the lien doesn't redeem, they're going to get the property. Now they're going to have to go ahead and Start the foreclosure costs. I mean, start the foreclosure. And they're going to have to pay the initial foreclosure cost and bring up all the taxes. Because if this thing is now, if the lien is now a couple years old, the redemption period in Illinois is two and a half years. So if it's already two years old, they've got to pay another two years of taxes. So when you're buying a secondary lien, what you got to do is look at the lien amount and figure that your total cost is going to be three to four times that lien amount.

Okay. Okay. So what's a typical lien on an Illinois, like in amount, Is there an average, is it $5,000, $15,000?

Oh, here's the thing, Mark. They could, you know, from, from these lien sales, it could be anywhere. It could be anywhere now. So if you purchase, you know, if you purchase one of the more higher end liens, like at least $5,000, then you know you're going to get your foreclosure costs back. And the difference between that, because the, what you're getting when the lien redeems is the difference between the 12% that you paid and the 36% a year that you're going to get back, right?

Yeah, that's a nice spread, actually.

It is a nice spread. And that will cover your initial foreclosure cost and you're going to get any other taxes that you pay. For instance, let's say the lien was a $5,000 lien and now you have to pay $15,000 in the, you know, last couple years of taxes because this lien was bought three years ago. And then you have to bring up the subsequent taxes pay off those liens because they're probably subsequent liens now on that property. So, but you're going to get all that back if the lien redeems sometimes during the foreclosure. And if the lien doesn't redeem sometime during the foreclosure process, you're going to.

Get the property, you're going to get the asset. And the asset typically on a house like that is going to be worth a lot of money, correct?

Exactly. Exactly. And here's the thing that, you know, if you purchase these higher priced liens, you're bound to make out one way or the other. And you have more of a chance of getting the property than if you just bought the lien, because this is a lien that already went the full redemption period. Okay. Almost the full redemption period and wasn't redeemed. So your chance of foreclosing goes up. It's not just, you know, 90% or 99% is in some areas, but now it's 50% is your chance of actually getting the property.

I see. Now, are there companies out there that form syndicates, raise a couple million bucks, and that's all they focus on, are these secondary tax liens. And they're going to do fix, they're going to do, go through the foreclosure process and they're going to fix up the house and they're going to flip it and they're going to make, you know, 30, 40, 50%. Is that, is that a typical strategy or is it more individual investors, you know, kind of picking it up?

That is a really good question, and I don't know the answer to that. I don't know of any company that, that specializes in secondary lanes. But I know that's something that as an individual investor that I've taken notice of lately. And I'll tell you why. Because it used to be when I first got involved in this business in 2002, liens would redeem quite quickly. Quickly. And the investor was frustrated because you didn't make a lot of money. Now I'm finding liens are held longer, and when they are redeemed, it's most of the time the bank that's redeeming them. Okay, that's good, you know, which is a sign of our times. The, the economic times that we're in right now are not very good. And not only that, the real estate market and the, the mortgage market is a little different than it was a few years ago. Whereas a few years ago it was very easy to refinance and pay off loans, today it's very hard to refinance and pay off any loans that you might have. So it's harder for the individual to redeem, it's harder for the property owner to redeem. And the banks want to protect their interest in the property. Since they're having a lot of houses, they're taking back a lot of houses, and they don't want those houses. So they, but they do want to protect their interest in the property. So they're the ones that are redeeming. And with all that they have to deal with right now, some of these things are slipping through the cracks.

Right, right. So. And last time we spoke, there was, there were certain states that you really loved for tax lien investing. Texas being one of them, is secondary Tax lien investing going to be the same type of strategy where we want to look for the best states or are they different than typical tax liens?

You know, I hadn't thought about that. The on in my members area I have a list of liens, Illinois liens. And because here's the thing with secondary liens, I'll give you a couple of tips. When it comes to buying secondary liens, you have to buy it from a trusted entity or a trusted person. So I buy secondary liens from an agent that I've known and trusted and recommended to my clients for years. And if I was going to buy, I've looked into buying secondary liens from individual investors. But you have to be really careful about that because you don't know if they've done their due diligence properly.

Right, right.

If they're not experts. Now I have also seen a list of secondary liens from an investor that I knew who passed away. He was in, when I knew him, he was an older man and that was his name. I knew him as Mr. Older and, and he was old when I met him. Wonderful guy who invested in tax liens. But I knew some of the liens he invested in and I knew some of them were vacant land and some of them were not good. So he had both, he had good and bad liens in his portfolio and you really had to do your due diligence if you bought one of those liens, even though he was a seasoned investor. All right? So you have to know, number one is know who you're buying from and you still have to do your due diligence yourself. And the third thing is that you want to make sure that there's enough spread in what you're paying for it and, and what you're getting for it. So you want to buy it at a discount. Most people, when they sell secondary liens, they're going to want the redemption amount, what it would be, what it would redeem for. Right. Now the problem is if you pay that price and then it redeems the next day, you're not going to make a thing.

Right, right.

And then if you go to, if you pay that price and you go to foreclose right away and redeems, you're not going to make anything. So. So the key is to buy it at a discount.

Yeah, just like buying a discounted note. So exactly. Yeah, I've got a note. The guy's, it's been seasoned for a year. He's paying me $500 a month. The balance is, you know, $50,000, let's say, and I need cash, so I'll sell it at, you know, a 20% discount. So if the interest rate's 9% now, effectively the investor's making 14, 15% or something like that. I've, you know, I don't know the.

Math, but yeah, it's a similar situation where you. So those are the three keys. You want to know who you're buying it from, know that they're experienced investors or an agent, a professional that, that knows what they're doing. You got to do your due diligence anyway, and you want to buy it at a discount.

Okay. Okay, great, great. So let's just break it down on a scale of 1 to 10, 10 being the most complex real estate investing you can do, let's say, like, you know, buying a piece of raw land and taking it through the entitlement process and going vertical and building to the least complex, which might be just buying, you know, a piece of property from a realtor on the MLS and paying close to retail. So how would you rank secondary tax liens in that range, if you will, of investment complexity?

Well, you know what? I'm going to give you a way to do it so easy that it's not even in that range. It's outside of that range, really. Here's the way I did it. I bought my secondary lien from an agent who takes care of everything. They will take care of the foreclosure. They will do the rehab and the selling. As a matter of fact, I bought the secondary lien. They started foreclosure. And of course, you know, I had to give them more money to start the foreclosure. And, and then the next step is, during the foreclosure, you have to pay the. The subsequent taxes or redeem any subsequent liens. And. And they already have a buyer for the property if it actually goes through the foreclosure process.

No kidding.

Yeah. So there is a way to do it so that they do everything for you.

So if I want to. Yeah, go ahead. I'm sorry.

Just like with buying liens, I mean, if you have the money to invest in liens and you want to do it through an agent, you can just give your money to an agent and have them do it again. The key is to have that it's an agent that you trust and has a good track record. And I have an agent that I've dealt with for four years that I've been referring my clients to for years. So that is, and that's who I purchased the secondary lien from. And for my members, part of one of the benefits of being a member of my website is that my members have access to, to the list of secondary liens from this agent.

Wow, that's huge. Well, listeners, if you're interested in secondary tax liens, go to taxlienlady.com and become a member and then get the exclusive access to secondary tax lien investing, which sounds like the easiest investing ever to make. What, what kind of return do you make on 18%?

Well, for secondary liens or for.

No, no, for secondary liens.

For secondary liens. Well, you know, it's actually on a case by case situation because, you know, some liens are going to redeem and some are going to foreclose. Now here's the thing. If you buy a low priced lien, like a $700 lien or something like that, and the initial foreclosure cost is $1,250. So and it does, and it, and it redeems sometimes during the foreclosure process, you're not going to get that $1250 back. So you're not going to make in that spread between 12% a year and 36% a year on $700. You're not going to make that money back. So that's why I was saying that the key is to buy the higher priced liens now. But what some people do that want the property is they'll buy the lower priced liens, but they'll buy a whole bunch of them and then a certain amount of them they'll actually get to foreclose on. And that's how they make that up. That is not my strategy. My strategy was to purchase a lien that's at least $1,200, maybe $2,000 and, and go through the process in hopes that, and a lien that was a house that was occupied in the hopes that it would foreclose. Now I've done, I've only just done one deal so far and it's in the foreclosure process now. And as I said, they already have a buyer if it does foreclose. So we're waiting to see if it forecloses or if it redeems. So it's really on a case by case basis. I don't, I don't, I wouldn't say that an average would be valid even if I, even if I had one.

Okay. But it's still a very viable way to make a very, you know, nice passive return on your money as opposed to sitting in cash with not, I mean, not too much risk, as opposed to, you know, if I, if I go through and learn how to buy just tax liens from you in, you know, making what average 14, 18%. So secondary tax liens is a very viable way of, it's a more viable way of actually getting the asset, underlying asset. Am I understanding it correctly?

Yes. Then buying liens. Oh, yes.

Okay. All right.

And the hardest thing that I had to do was request the money for my self directed IRA to do it. I mean, you know, it was, it's easy because there was. Because I didn't have to do any of the work. All I did was request the money from my self directed IRA to go to the agent who did everything, you know, and is in the process of doing everything for me.

All right, very cool, very cool. So have we covered enough with secondary tax liens or do you have anything else?

I think so. Let me give everybody a website to go to to find out more about my members area if they do, you know, want to get the list of those secondary liens. And also in my members area, I do a training every month on liens and, and there is a training in there on secondary tax liens.

Okay, great.

If, if they go to ww.tax lie lady.com forward/membership Maine and that's membership with a capital M. Okay. Main M A I N with a capital M. So it's membership capital M main capital M dot HTM I know it's a long.

All right, I'm gonna put this in the show notes. So taxleanlady.com.

Membership main membershipmain htm htm and if you do, you know, if you do decide you want to order, there is a monthly and yearly membership. Just let me know when you order that Mark referred you that you heard about me from Mark.

Yeah, please do that. Send the Lane geek some love there. Yeah, yeah, exactly, exactly. So, you know, if you do that, Joanne will continue to come on the podcast. If you don't, you know, I'm just gonna be talking to myself. It'll be a very sad state of affairs. So let her know you listened to the Land Geek podcast and wanted to join the members area and learn how to start investing in tax liens and secondary tax liens. So let's pivot. We don't have that much time left, but we are going to have a webinar together, which is going to be my first webinar, which I'm really excited about and hopefully it's going to go really, really well. So Joanne, what's the webinar? You know, if someone's ever never been on a webinar, what do people take away from a webinar typically?

Well, we give a lot of content on our webinars, so I suggest, you know, you be ready to take some notes. And Mark, I think judging by your podcast, you're going to have an awesome webinar because you give a lot of good information and that's what people want. And I'm excited about it. I can't wait to hear more about what you do. So.

Yeah, yeah. So the webinar is. I don't know if this is too long. You might tell me to hold it back, but I've been practicing it. It's about, It's a solid 90 minutes. It's a lot.

Oh, wow. That is a lot. That is a lot. I tell you what, I'm going to ask you to cut some out just because we're going to have questions and we want some questions. But yeah, we want some time to answer the questions because I know we're going to have questions. So.

I will definitely do that. I don't know how to do it, but I'll do it.

I'll help you with that. We could talk about that later.

Okay, so the investors toolkit, which is what I'm talking about, the webinar is talking about the program of literally pulling back the curtain on how to buy and sell raw land for active profits, for flips, and how to make passive income by creating land contracts and getting income each month. So it's a one time sale. You finance the buyer and they continue making payments to you. So how do you do this? And I'm going to teach everybody how to do this. We're going to discuss the due diligence program, which is basically a fancy word for how to do your research. We're going to discuss more deals than you can handle, which is my program that's going to teach you how to get an endless stream of incredible deals. So it's literally going to be more deals than you can handle. So the deal flow system, I'm going to give you my secret list of counties and business documents package so you know exactly where to start getting great deals and plus all the documents and scripts that I use. So you're starting off really the smart way, not the way I did, which was, you know, bumbling around and trying to figure it out. Then there's the more buyers than you can Handle program, which is the marketing program. And I'm going to really teach you how to sell your property at record speed and even how to pre sell the properties before you even close on them. And then there's a copywriting program because, you know, Joanne knows, look, the difference between a good ad and a great ad, it's all about the words. Then there's the pricing strategies program. I'm going to teach you how to unlock the hidden value in your properties and maximize your profits. See, Joanne, this is why it's going to be such a long webinar.

Wow. I was going to say you're going to do all this at our webinar?

Yeah. And then there's a virtual assistant management program.

So look, you know what, Mark? I think we might even have to have like two webinars, a part one and a part two, to let people assimilate all this information you're going to give them. This is great. And they're going to get it for free.

For free.

Wow.

That's what I like to do.

Wow, this is really cool. I can't wait. I can't wait to learn this stuff myself.

Yeah, I mean, the only thing that's worrying me is that you're going to be bleary eyed by the end of it, so.

Well, that's why I think what we're going to do is split it up into two webinars. So. And we give people a chance to listen to it and then answer and answer their questions that they might have. So we might want to schedule the second webinar now as well.

Okay, great.

So, I mean, not right now, but when we get, when we're done with this podcast, we might want to schedule part two so that we can make sure that we answer everybody's questions. This is great. This is like a training. We're gonna do a training for people.

It's gonna be. It's a lot. It's a lot. So. And then I'll talk about, you know, the other, the other value propositions that go along with it. So let's pivot again. As much as I love talking about me in our upcoming webinar, let's talk about what's going on in the world of the tax lien lady. What's, what's your next conference? When, what are you guys going to cover? What's going on?

Oh, okay, great. We're. I'm hearing a little echo now, Mark. I don't know what happened, but.

Oh, I don't hear it. Okay, okay.

Well, I'm glad you don't hear it. We're having our next tax lien investing workshop and conference in Bear Creek, Pennsylvania which is in Macunji, Pennsylvania on January 25th. And that's a Saturday. It'll be all day from 8:30 in the morning until 5:00'. Clock. And we're gonna cover how to invest in tax liens in specifically we're going to cover New Jersey. We're going to cover the online investing in Arizona which is going to be coming up also the other tax sale that will be coming up will be Nassau County, New York. They Nassau County, New York is a live tax sale in fe February of every year. And it's a usually a three or four day tax sale, really big tax sale. New Jersey sales happen all through the year and some of these are now online. And the Arizona tax sales happen in February of every year. So our conference will be right before, right before these tax sales end. So we'll be able to give people some tips about those tax sales. And as well as the tax sales in Pennsylvania, since we'll be in Pennsylvania, we'll also cover that. And we also have tax title services will be there and they are experts at clearing the title to your property. So they'll be here. And Mark, I'm hoping that you'll be there to talk about your land business.

I'm planning on it. I'm planning on it. So you know, the only thing that's going to stop me is if it's too cold because you know, I'm thin skinned.

Well, you know, this is ski season and we are having it at a ski resort, so be prepared.

All right, I'll tell my wife to start buying the.

Bring your coat.

The appropriate, yeah, the appropriate gear. You know, my, my North Face gear for the, for the event for sure. But yeah, I'm definitely gonna plan on being there.

And we will also have a representative from Camma Plan which is a self directed IRA company. As a matter of fact, they're one of the companies that I have an account with. So they'll be there to talk about investing in tax liens and tax deeds with the self directed ira. And my partner in this conference is Steve Davis, owner of liarSource. And leansource.com is a data service and they, they specialize in New Jersey, but they're also, they specialize in New Jersey and Nassau County. They also do custom lists. So that's somebody that you'll want to meet, Mark, when you come out here. They also do custom lists including lists from different states, but not only the tax sale list, but delinquent property lists. So something that. And not only that, but he is also a former New Jersey tax collector. He was a tax collector for years in New Jersey, so he has some real insight into investing in New Jersey tax liens.

Wow. Very, very cool. Okay, awesome. So I'm going to put you on the spot as I always do.

Okay.

What is your tip of the week?

Okay, well, I mentioned the online tax sales, and here's a website that has a lot of the online sales. It's realauction.com and the only online sales that are going on right now are the ones in New Jersey. And you can, you can actually get the results of previous sales. Now the only one that right now is posting the results is Clifton. But as these other sales that are going on now, as they are done, you'll be able to get the results of those sales as well. And you can see the Arizona There's. They have some of the Arizona counties or. First of all, only half of the Arizona counties are online. Some of them are live. But out of the Arizona counties that are online, I think three or four of them are done on real auction. So you'll be able to see those. They're closed right now. They don't open up till February. Quite many of the Florida tax sales are also on real auction. Some of the Colorado sales, which are just over now, are on real auction. And the only county that has Nebraska tax sale, Douglas county, is on real auction. So there's quite a few. Some of the Maryland counties. A couple of the Maryland counties are on real auction. They will be coming up again again in May or June. They come up in late spring. So there are a lot of online auctions on that site. And they also have deed auctions there as well.

Oh, okay.

So you could. Some of. There's, I think a handful of Florida counties that have their deed auctions on real auction. And the nice thing about the Florida deed auctions is that some of them are done once a month. Some of them are even once a week or a couple of times a month because there's a continual feed of liens that go into these deed sales.

Okay, very good. Realauction.com I'm going to try. All right, so my tip of the week is going to be a marketing tip. And Joanne has used them in the past. I have not used them because, I don't know, I just learned about it. So I'm gonna see. I'm gonna see if it works or not, but. So I'm gonna put this disclaimer. I haven't done it yet, so I don't know if it works. Maybe wait till I give you the results of it. But it is a new site. I mean, it's not a new site, but it's a site that I'm gonna use for my marketing and I'll let you know how it goes. It is prweb.com and it's for press releases now. Prweb.com expensive compared to free press release distribution companies. But I really feel like, you know, you get a piece of property, this could be a great way to drive traffic to your website. What do you think, Joanne?

Well, we'll find out. You're going to let us know, right?

Yeah, but you, you do these press releases?

Yeah, but I use press releases for different things. Not to advertise properties. I use press releases to advertise the webinars that we do.

Oh, okay. Well, I'm going to try it with property and try to bring traffic in to the site or even building my list to get people into the squeeze page. How to avoid the three fatal Land Buying mistakes. Something like that. And just see how it goes.

Okay.

All right, Joanne, thank you so much. I really appreciate you taking time out of your busy morning again to teach us all about secondary tax liens. And I'm really excited about our upcoming webinar. If you want to learn more about Joanne Musa again, the most trusted tax lien investing authority and how to make an incredible passive income investing in tax liens, check out www.taxleanlady.com. i'm going to have a link to her site. Also check out the membership main area that we discussed before and get involved in the exclusive membership as far as learning and investing in tax liens and secondary tax liens. Look, give me some love. Go to www.thelandgeek.com, download for free the Passive Income Blueprint, get the free ebook how to Avoid the three Fatal Land Buying Mistakes and get this podcast delivered weekly into your inbox. Joanne, how do you feel about this podcast? You gonna come back?

Oh, yeah. I always enjoy talking to you, Mark. It's always fun.

Thanks so much. I really appreciate it. I'm so excited about our webinar, which I've just learned now has become a marathon webinar. So we're gonna shut that thing down. We'll talk after the podcast so the listeners don't have to be bored of the details. But thanks so much. This is Mark Podolski, the Land Geek. We'll see everybody next week. Thanks a lot.

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