What You Missed March 2018 General Meeting
by Rob Earhart
Make Money From Tax Deed & Mortgage Foreclosure Surplus
Rich Meyer, Default Investor Association
March 6, 2018
Mr. Meyer began the evening with, “I was at the airport and needed a cart to carry our luggage. The carts were $5, but you get one dollar back when you put it back into the mechanism. One person was putting one back so I asked if I could get the cart from them and I would pay them two dollars. To my surprise, they said “No” and put the cart back in and took their dollar from the machine. I tried one more time and offered three dollars, and still they refused.”
“I just could not understand why they would not want to double or triple their money.”
Rich warned, “The moral of the story is that people don’t want you to make money.”
“I have bought 1,500 homes that were sold at auctions, foreclosure sales, etc., but this business is easier and more lucrative,” exclaimed Rich.
Rich described the three books that he has written, with the crown jewel being Distressed Properties.
“I will show you how to make 25% more in your real estate business.” Rich passed around a book filled with copies of checks he has received since the first of January.
You will do better in the larger counties because the small counties don’t have many sales.
Reasons to work this business:
- There is no risk
- You never have to own a property
- It requires no cash
- Create equity with just your own skill, contact face-to-face or phone. I know you talked to someone today.
- It’s a ground-floor opportunity
- Your income potential is not limited
Your average income from tax deed surplus is $6,200 per file. You should get at least one surplus in four hours, but you must have the discipline to work for that four hours.
Surplus is only available at government sales, tax deed sales, foreclosures. None are available at Hubzu, Zillow, or any other auction sites.
State Statute 55.141 is Transfer Lien to Cash. You can pay off a lien against your property and then negotiate with the lienor to collect it and split the return of funds.
Most people have one attorney in their business, but I like to have multiple attorneys to handle different aspects. Rich showed a video of one of his “Bulldog” attorneys, Bernie. He has his own office and clients, but he represents us very well.
Some liens are erased, but municipal liens are not extinguished at the tax sale.
When you buy a tax deed, and you know what you are doing, you can go to the home with the owner. Ask them how they would stop the sale. They typically can’t, so I buy the property at the tax sale. As a grantee of a tax deed, you are entitled to an eviction.
When you bid on a house, the price will be based on whether it has been homesteaded. They will tack on $25,000, but that will go to the surplus and you can negotiate with the homeowner to get 50%.
If you want to claim a surplus, you must make a claim administratively from the homeowner. Florida Statue 197 says claims are paid in priority: 1st mortgage, HOA fees, then the homeowner.
I like to teach that Surplus will pay your bills; tax deed sales will buy you a car.
Go online to check the tax sales; there are hundreds of leads.
Secret Sauce is: I’m never concerned who the mortgagee is when I make a claim.
Declaratory action determines who deserves the surplus. The bank will try to claim the surplus, but most of the time they don’t show up in court, so they are defaulted out. The bank will have to produce the mortgage or answer questions about payments, phone calls, etc.
Part of the reason we are so successful is we know how to pick a file. The conditions will be successful if they have any assignments or any MIRS. If those are in the file, it is a good suspect.
When I start a lawsuit, my attorneys charge me a flat rate of $3000.
You just have to spend your time on only qualified leads.
Whenever there is a Judge involved, I feel a lot better than just dealing with an administrator.
There is a lot of skepticism in this method of money recovery. You don’t need to be slick, they don’t trust slick. You are just going to show them how to recapture monies they never knew were available.
Foreclosure surplus is different. Licensure is not needed to help homeowners. You are not a trustee. Your recovery fees are limited to 12% by law. After 60 days, only the homeowner can apply for the surplus.
Most of the time, the first mortgagee is the forecloser. If there is a second mortgage, they take priority over the homeowner.
Surplus is the easiest sale in the world, because the homeowner does not know they are due anything.
How much can I charge? For foreclosure, 12%, but tax deed surplus is 50%. If you try to get more, the judge will not sign your order because they will not let you have more than the homeowner.
What happens to the money if the homeowner does not get it? It goes to the state, and no one wants to see that. That is your pitch, and it’s easy to do.
Tax deed sales are normally cancelled and don’t come back, and there is a lot of competition.
I found I could not wholesale houses because there are not a lot of leads. I could not talk to a homeowner telling him I can pay $100,000 for a $150,000 property so I can sell it for $120,000.
Probate is impossible because you can’t get four people to decide on lunch, much less how to split $50 for the house.
Rich spoke about the upcoming Super Conference and how it will jumpstart your default business. “You can earn between $1,200 for foreclosures to $6,000 for tax deed surplus payouts, and all it will cost you is your education.”
“Saturday, I will be teaching both foreclosure and tax deed surplus training here at the Ramada. For the entire program, you can invest $897.50 and your first check will pay you double that,” exclaimed Rich.