Another Offline Model - Flipping Foreclosure Properties?

Not exactly "machining", just asking the Warriors about their experience with it...Pondering more really... Hey you used to flip some real estate here and there...did it have anything to do with this tax lein stuff?

A guy I know... wouldn't really call him a friend, but I've done some work from him and learned a lot from him. He flips properties, owns a couple bars and restaurants and a strip club.. I know that he did do some of this, not sure how much but he was pretty successful at it.

I know he flipped an apartment complex and a few other houses.

I think his main goal was monthly income though, so he ended up with about 30 rental properties. Owning the strip club, that was a complex situation which I won't get into here, but he was paying 6K/week for the building. There was an original owner, and really, there was a lot to that but I'm not going to get into all that. LOL.

The club business kind of sucked his money from all the other streams of income... so it's hard to say if he was really successful at it or not. He did file bankruptcy, but kept all the properties and I think it's all going fine..

It seemed to me, that he was doing better with the rental properties than anything else. Other than that, I don't have too much info. He got into some commercial real estate too, but I think that was a bust.

My step father, has a remodeling and construction business.. he was looking into doing this as well, found a lot of super cheap properties but not sure if it was just the tax lien type thing. He ended up not doing it, not sure why he backed out but he's owned a few successful businesses and flips THEM lol, so there had to be something he didn't like about it.

I'm also interested in hearing more.. It's hard to see a losing opportunity here..

it does work, but people who get into it think it's a quick money maker, but it is more like an alternative or an addition to your retirement. I say that becuase you have to wait so long before you can "own" the property because each state and then county is different, but it does work. My dad is doing it and like I said, it is a slow stream of income, but once you "own" the property, then its well worth the wait, as mentioned in the opening post...

Well I can't speak on that tbo. I can say that the guy selling this tax lien system has this background..

Over his career, Givens was the target of dozens of lawsuits and two court cases for defrauding customers, one in California and one in Florida. The California fraud case found that he had mislead his customers by claiming that he had made his money using his financial strategies, rather than by selling his financial strategies, and he was ordered to refund $14.1 million to his customers. Givens settled the Florida fraud case. Givens was also sued for advocating dropping insurance to save money by a woman whose husband was killed by an uninsured driver. Givens settled the insurance suit in 1993.
"Givens lied about his past," said John W. Jeffrey, an attorney for the plaintiffs. "The way he made his money was not by using the strategies he sold but rather by selling the strategies themselves." A month after the verdict in California, Givens' company filed for Chapter 11 bankruptcy protection. He lost control of the business in 1997. A judge approved a plan to repay creditors 25 cents on the dollar. To protect himself from creditors, Givens transferred most of his assets to limited partnerships, frustrating lawyers who tried to collect for their clients.

Excellent input.

Yes there may be renovations and added expenses that must be considered... in my friends case there werent, but I have to think that's isolated, or he just took the time to really pick a great deal.

It would be good to shake down the variables here and give warriors a realistic perception of those shows... Hopefully it will shake out to be a great model, but maybe not. Thats what this thread is for.

I know a guy who was renting a house from a guy who didn't pay the taxes and my friend ended up buying the house for a very low price at a tax auction or lien auction. Either $1100 or $11000--can't remember

Most all of the real estate programs you see work. Carlton Sheets has hundreds that say it works and thousands who say it doesn't. Robert G Allen bought a bunch of houses no money down.

I have a friend who buys junk houses, fixes them up and sales them on a rent to own plan. He gets a good option payment of $5000 or more and then ends up taking most back. The people can't pay the rent and just walk away. So he fixes them up and does it again. He has had houses given to him.

You do need some knowledge to this but it is like buying a used car cheap and trying to flip it by cleaning it up and marketing better. Sometimes you get a deal and sometimes you get a lemon.

If you go to your local real estate investor club(just google it) you will find people making money doing all the things you see on TV. You can find the money you need to invest in a flip.

What you do might work well in this business. Get a good list of houses that have problems like cosmetic work and call them all and offer 40 cents on the dollar. You will find someone who will sell. Of course then you do your due diligence before the sale is finalized.

You could call people who are about to go into foreclosure and find good deals. Check the laws. But there are guys who knock on the door and tell the people they know they need help and are there to help bail them out. Might seem a bit cruel and they do get kicked off the property often ---but it only takes one a month or every few months to make a good living.

The deal is there is lots of ways to buy real estate cheap. there is lots of competition but there is also lots of opportunity. By making offers you at least have a chance

Good stuff. Keep it coming. I want to hear the neg perspectives too but those are always going to be 80% of all stories, you have to consider the sources. It would be great to hear from some more who make it work or know of others who do.

There is always a way to make something work and a way to make something that works...NOT work. lol

I researched tax lien sales and have actually been to several auctions in different states. This method of making money is now OVER-SATURATED! Too many people at the sales AND most properties are vacant land. I went to sales in Arizona, (all tax lien sales are in the month of February for ALL counties), and Florida. Most tax lien sales are now on the internet so ANYONE can bid.

Lastly, most TLCs, tax lien certificates, are "redeemed" by either family members or banks. My experience taught me that less than 5 PERCENT of tax lien holders will actually get the property.

Bottom line, not worth your time and money and DEFINITELY don't buy some "infomercial" crap seen on late night TV.

chemo38

John,

I'm not sure if I'd go the tax lien route. As a former CA R E broker I specialized in foreclosures. A lot easier, faster and cleaner or at least it was for me and my partner.

We currently have a client here in the Valley who has mortgages on 235 mobile and manufactured homes. He gets all of his HO ins through us that's how I know. If you want a realistic way to make money in real estate look at this market and become a lender. Like everyone else, these buyers are looking for financing too.

The beauty is, one of realtor clients tells us, the buyers almost always show up w/between 5 and 10K down on properties selling for (usually) 40 to 50K. If the lender mentioned above had to take back a property he doubles the sales price and starts again.

I bet you can do the math. He bought it anywhere between 20 and 30K sells it for 50 to 60k and finances the sale. Buyer gets foreclosed. Seller offers it for 100K accepts between 60 and 80k and like the IM people say, wash, rinse, repeat.

Obviously I gave you only the highlights w/o the fine print. But, as a lender, your options are pretty wide open under the current laws.

That's all I know cuz I don't want to know no more...

Here is a reputable website devoted to real estate:

Real Estate Investing, Real Estate Investment Resources That Work!

That is not an affiliate link nor do I make a dime off anything they sell.

BTW, go by your local MLS office and see what kind of books and materials they have 4 sale on mobile homes. Your local library - remember that source - probably has a whole row of books devoted to real estate and mobile homes.

Finally, find a real estate agent licensed to sell mobile homes and see if they are willing to give you a free education. By free, I mean you might have to buy lunch.

If I remember any more sources, I'll post later.

P.S. I have Lonnie's book. Fantastic biz plan with solid advice.

You can do this anywhere you want.... I used to do this, in the US, dealing with companies like HUD. You need around $15k to start.
I can go into more detail if people are interested. Or make an ebook and sell "How to make $2k/day" (True story) for only $7....
I have never done it directly for realtors, although I have considered it.

Forgot to mention the sales only occur statewide once per year. They are published in July and the sales take place on the county courthouse steps in each county in August all on the same day. I know of a family here who covers four separate counties by Dad, Mom and two older children each at separate counties to invest their money.