QOTD 001: Getting Marketable Title on a Tax Deed without a Quiet Title

Session 001 Show Notes: 

Getting Marketable Title on a Tax Deed without a Quiet Title

In this Session we discuss the process of getting title insurance on Tax Deeds. Schumacher is a trailblazer in the title industry who created a product that allows real estate investors to get title insurance less than 2 months after tax deed auction purchase. In this interview, Dave guides us through the process and explains what maybe the fastest and easiest way to get title insurance on your tax deeds. As I often say the faster you can get title insurance, the faster you can sell them and collect your pay day if you are flipping.

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Resources mentioned:

Tax Title Services – Company I have used to get marketable title on a tax deed in 30-45 days without having to do a quiet title action.

Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki

Central Florida Realty Investors – a 25+ year old not for profit real estate investment association in the Orlando area servicing investors and real estate industry related professionals.

National Real Estate Investors – a parent organization to many real estate investor association throughout the United States.

How to Drive for Dollars Part 1 – If you are looking to wholesale some houses and need a deal, driving for dollars is definitely great way to find motivated sellers.  Play the video and watch how I spot the potential motivated sellers.

How to Drive for Dollars Part 2


In this particular episode you will learn:

  • Why Tax Deeds title have to be made ‘marketable’
  • What does marketable title mean
  • Some options that include clearing the title in court
  • What options you have in getting marketable title
  • What are Tax Deed Certifications
  • How to choose the right title company if you are going to get a Tax Deed Certification
  • What are the best practices
  • Why the risk of challenging the Tax Deed may be low
  • A discussion about some of the liens that survive the tax deed auction


Sandra: Welcome to The Queen of Tax Deeds podcast but first…

Announcer: You are encouraged to seek council from a knowledgeable professional on this or any other investment with which you are unfamiliar as to legal, financial and tax implications prior to implementing the techniques and processes discussed in this program. Always do your own due diligence and do not solely rely on the information provided here.

Welcome investors to The Queen of Tax Deeds podcast, uncovering the real estate secrets of making money with OPT, Other people’s taxes. Your host is Sandra Edmond, a Real Estate Investor, Entrepreneur, Realtor and Tax Deeds expert since 2004.

Sandra: This is The Queen of Tax Deeds podcast for real estate investing, session number one. I’m Sandra Edmond and in this session we will be discussing one of the techniques of getting marketable title for tax deeds and that is real estate investing.

Joining me will be Dave Schumacher of the President of Tax Title Services. Before I bring Dave on, I want to tell you a little about myself and my intentions for doing this podcast. This is our first podcast, our first episode. Always for years that I have been teaching these classes and educating people with my YouTube channel and the content I put on line. My intention is always to help people, help as many people as I can.

I’m a big believer in helping people to help yourself get to as far as you want go. I always give the analogy that you can’t have your hand closed and expect something to come in it. So you keep your hands open, be very giving in order to have things come back to you, law of attraction.

Provide valuable information for beginning investors, intermediate to advanced, seasoned investors who are already familiar with the tax deeds, tax liens or real estate investing in general. I look forward to hearing from you. You all can contact me by going to my website, QueenOfTaxDeeds.com. Contact me through there.

You can send your questions. If they’re things that you want me to discuss or people that you think we should bring on as a good resource for you, let me know. I’ll also provide as many resource as I can and we can discuss those, also information on educational opportunities that I may have coming up as well. On my website www.QueenOfTaxdDeeds.com, I’ll have a special section for the podcast with show notes which will include some links, transcripts, some, you know outlines of what we have discussed. The intention is to build more and have more available for you as this happens.

A little bit about my background. Before I got into real estate in 2004, I was in the television news business. I graduated with a degree from the University of Central Florida in Radio Television and so I started working in the NBC affiliate here in Orlando behind the scenes and based out of Central Florida, behind the scenes as a News Production Assistant and I would help out in the news room and write stories and things of that nature.

My first market was here in Orlando at The NBC affiliate,WESH and then I worked there for about three years and then went on to the CBS affiliate in Fort Myers where I got my first on-air job as a part time reporter over there. Worked there for about, just under a year when I found my first full time job on air in Tallahassee and I moved up to Tallahassee ABC station there WTXL where I was the Crime Reporter and fill in Anchor and lastly I worked in West Palm Beach as a News Reporter in the night as The ABC Affiliate in West Palm Beach. I was their Treasure Coast Reporter, covered everything that was going on from Vero Beach through Palm Beach and Northern and Broward County as well.

My contract was coming up for expiration and they weren’t going to renew it so I had to find another job in another market. So while I was looking I was getting offers from other TV stations in other states but at the time I didn’t want to leave Florida so I turned them down and waited for a position to open up here in Florida.

So while I was doing that, I found out about ‘Rich Dad, Poor Dad’, Robert Kiyosaki’s book. Many investors who got in the business know about this book. It’s called ‘Rich Dad, Poor Dad’, What He Rich Teach Their Kids About Money That The Poor And Middle Class Do Not, and that inspired me cause first by the title I thought this is probably going to tell me why my credit’s horrible and why I’m not being successful, why I’ll never be successful, but actually it was very aspirational and it also showed me how to become a better person and make the money and become an Entrepreneur. Then even if you didn’t learn you can always pick it up later on in life. So, I started doing what rich dad said.

There are two main things that he talked about; one was ‘join your local real estate investors association and I did that and then he also talked about wholesaling and I also did that. Those are the two best decisions I ever made, was to join my local real estate investors association which I joined one in South Florida, was there for about a year, then I moved over to the Central Florida area and I joined the Central Florida Realty Investor Association and their website, I’ll put on my show note, it’s cfri.net. That’s for Central Florida Realty Investors.

I joined the organization. I became a volunteer and I liked it so much I came on the board at CFRI in my last position there. I spent two years as the President of the association, 2013 and 2014. CFRI has been around a long time. They celebrate 25+ years in the business. They’re also a member of the National Real Estate Investor Association. So if you are not in Central Florida, this podcast reach many people.

You can also join REIA in your organization in your area. If you go to National REIA’s website, I’ll put their link also in the show notes for you. I believe its nareia.com or .org but I’ll put that in the notes. You can look on their map and they’ll show you where other real estate investors associations are in your area. Go, take advantage of that, that’s where you’ll meet other investors and especially if you’re not doing this business full time, maybe you’re doing it part-time.

You’ll find people that can encourage you and help you stay in the mind frame of, you know, working and moving forward in this business cause if you’re not in it full-time you might get discouraged or you’re not around other people that have a similar mentality so you find like-minded people at these associations as well.

So I told you there were two good things that I did when I read the Kiyosaki book, one was, I joined CFRI. The other was, learned to do wholesaling and that was the part that I didn’t believe that you can do. I was like, what, there’s no way that you can buy properties.

First of all, there’s no way you can get a property under contract and be able to sell the paper work. They weren’t just talking about making money selling the property; they were talking about making money selling the paperwork and making lots of good money. And back in 2004 the market was doing pretty well, you know, it hadn’t crashed so people were making some good money wholesaling and I was like there’s no way you can do this. I wanted to prove that you couldn’t do it. That’s how I got into it. I wanted to prove that you couldn’t. I ended up proving myself wrong. I was completely wrong cause within the first couple of months I got into the business I had three deals. I was making some good money doing it and what I did was what’s called driving for dollars.

So I drove around the neighborhood, had a note pad with me and a pen, something to write with and I rode through the neighborhoods looking for ugly houses and we’ll do a session and we’ll discuss that. Distressed ugly looking houses and I wrote down the addresses of these houses any time I came across them. So that way I can contact the owners and I would contact them by looking up their information on the Property Praisers website.

If you get an address for the house, you look it up on the local assessor’s website or Property Praisers website. It’ll tell you who the owners are and where the owners live. I would contact the owners by knocking on their doors. While a lot of people were sending letters I was knocking on the doors cause look I worked as a TV News Reporter and they would send us out to go know on other people’s doors and usually when I knock on the doors it was not good news. It was about something you know, bad or something awful that happened. So it was very refreshing to be able to go to people and offer them money.

So within the first couple of months and I had locked up three deals, was making good money, was an amazing feeling to be able to make your own money that you made out of thin air appear. It’s not as though I had something and I bought it at a reduced price and turned around and sold it. Yes, I had a property under contract and what I did was, I found another investor.

So I found a home owner, presented them with an offer, they accepted that offer. I left the offer with them even if they tell me no, I left the offer with them and a lot of times they would call me back later and say “You know what, we thought about it, we’ll take the money” you know cause they’ve got a closing date. They got the offer right there and the paper work. They talk to their partners or relatives, whoever is involved ad they’re ready to sell. They’d rather have money than this property sitting there that they’re sinking the money in and not getting anything out of it.

So what I did was…. I was the pro-buyer and of course the home owner was the seller and what I do is find other investors who also thought this was a good deal and I would allow them to take my position in the contract so that’s what you do with an assignment. And then another investor comes in and they take your position and for you to assign that right over to them they’ll pay you a fee. So they’re many things that I learned. There were some pitfalls one was which make sure you control the title company.

So then I would make sure I picked my own title company cause the first deal I didn’t and I learned the hard way why it’s important to control the title company. So I made some good money wholesaling and I remember the first piece of equipment I ever bought with my business money was a all in one multifunctional printer and that printer I had for like several years.  And it wasn’t until I saw a fabulous deal for a printer that I realized I had sentimental value attached to that printer because it was the first bit of money that I actually earned in the real estate and it made me so proud to buy something with my own real estate money that I never got rid of that printer as long as I was in the business. And so like five or six, seven years later it was time to get a new printer and it really was hard for me to let go of that printer because it symbolized, you know and new part of my investing business.

So if you’re just new or just getting into this, you’re going to have a great time. You just have to be persistent and you now, follow through. Let’s see what else did I want to tell you? At around the same time that I was wholesaling I got into tax deeds so that’s what the whole thing is about. So I got into tax deeds. I started doing research.

I watched the seminar who mentioned tax deeds and how you can make money that people have to pay property taxes and if they don’t pay their property taxes the county will auction off their property and the person that buys it at the auction gets immediate possession. So since these were county auctions and things happening at the county offices, I figured, well I know the Florida public record laws pretty well and being that I use to be the Crime Reporter I know the court houses pretty well too. I know how to work my way around, get the information that I need. I can dig into the details of these cases and I also studied up and knew Florida’s property record laws pretty well cause we use them a lot in TV news and Journalism ad I also studies the Florida statutes on tax deeds just state laws on tax deeds.

So my first deal, purchased a property on the Land’s Available list. These are properties that went to the auction and nobody bid. I know you think that’s got to be junk. Well I spent $12,000 on that property, turned around and sold it for $49,000 within a few months. So apparently that junk made some lots of money so it just all happen. There are other good deals on that Lyn’s available list. That property had a mortgage on there which got wiped away and we’ll discuss that with Dave Schumacher and how that happens and it also had code enforcement liens on there which don’t go away.

Code enforcement liens were pretty high, about 8000 and they negotiated with us down to 4000. So they reduced the lien but we still had to pay it. So we arranged that, that lien would get paid off and we made an agreement with the county to pay it off in about a year which is the most I would think that it would take to sell a property. Remember I was just getting started and I wanted to be extra careful so we, you know, didn’t have to pay the code enforcement liens right away and then went through the quiet title process and then three hurricanes hit the state of Florida, actually, the Port St Lucie area at the same time. So this delayed our quiet title.

Each time the court house opened after one hurricane, then another hurricane came and then when it opened again it was delayed because they had a backlog of cases that they had to go through before they take on any new cases or go on with the rest they had. So it was like five or six months went by before we could actually close on it but paid 12,000, got 49,000. That’s a pretty good deal. Now I made some mistakes along the way.

Back then I probably knew a tenth of what I know now but I found people that knew, that can help me and they did and I found people who could help me and resources and things like that which I hope to be able to provide you and you’ll also find at your realty investors association as well.

One of the thing is, you cannot sit on the fence. You have to take action. You just can’t sit by and think, I’ve got to learn everything I can before I get started in this business. No, the biggest teacher is usually experience. Just do your due diligence and you’ll learn how to do that and you’ll hear from Dave Schumacher, the President, Tax Title Services and he’ll tell you and anyone else will that in order to have success in this business is that you have to take action alright. You have to take some action. So we’re going to have these podcast and hope to continue sharing great information with you and we’ll go ahead and bring on our first guest.

Alright and joining me right now is Dave Schumacher with Tax Title Services and I have to say one thing that I am happy about that I came across this company pretty early on in my tax deeds investing. I think I may have probably been in the business two or three years when I found Dave by just doing a search on line and it’s probably one of the best things I ever found. I gave him a call right away. I remember sitting in my investors association, called him and quizzed him. He knew everything about the business like, he was for real because sometimes you’ll call real estate Attorneys about tax deeds, they don’t know much to tell you about it. So I was very impresses with Dave and I’m very happy to have you on my very first session of what is soon to be or will be The Queen of Tax Deeds Podcast. Welcome on board. Dave.

Dave:  Thanks so much Sandra. Yeah, I remember that call and you and I have done business off and on for at least five years or more. I am super excited and glad to be here and I look forward to more podcast if you want me.

Sandra: Oh yes because already talking to you, you are a treasure trove of information. One of the things that I also realize is that you’re also an investor as well as a title guy and business owner. So you see it from a 350° perspective for a lot of us who are in the real estate business. So tell me a little bit about you and what it is you offer and how you got started.

Dave:  Sure. At young age, maybe in my early 20s. I’m 47 now but in my early 20s, I was always excited about real estate and passionate about it and I remember the ‘No Money Down’ books. They were coming out. I would buy every book and tape and seminar back in the day. My wife pretty much back in the time all say, “if you buy one more book I’m going to divorce you” kind of a thing but the one thing I always did when I bought these things just and like your students, you know the key is the information you provide, if you apply it, it actually will work and most people when they buy these books and tapes they don’t really apply it. They get all excited, I am going to change my life and it goes back on the shelf and the next time they get all stressed out and they want to change their lives they buy another book.

So I always read the books. I always listened to the tapes and I always apply what I was learning and I bought my first property. I actually was dealing with VA Foreclosures in 1993/4 out of Florida I’m from California but back in the day I had no money and being in college in California you need a lot of money to buy things so I could buy a three bed and two bath, bread and butter home, in a middle class, in the school district for $40,000 and the VA gave me all the financing to do it, 7%, fully assume the loans. So I remember I bided on five properties pack on my first time against a blind bid, I got all five. You know my wife’s like “we even own our own home and now we have five investment properties.

How I looked at it is like a 401k. If I had bought one property here with little or no money down, I’d never speculated and I could rent it out for PITI which is principal, interest, taxes, and insurance and covered [inaudible 17:49] my class. If I did that with a good management that I trusted and I held on to that thing for 30 years and let my tenant pay that thing off I would have 20 free and clear homes when I was ready to retire in my 60s cause… It’s really that simple. You got to hold on through the ups and downs of the real estate market but again if you buy right you’re not worried really about that because again, you’re not speculating.

So I started to do that at least once a year and then one became two and then two became three and then it became duplexes and triplexes and then self-store and commercial, so it got bigger and bigger. But the concept again was I wanted to retire….. If you got 20-30 free and clear houses in your 60s, would you need a job? Would you need social security? And you’re getting a $1000 a month. Do the math. What’s 20 houses times a $1000? That’s 20 grand a month. Could you live off 20 grand a month?

Sandra:  Heck yeah

Dave:  Heck yeah right. So that was my concept. So I started on… At the same time I was studying mortgage foreclosures, I was just graduating from college and the first job I applied for was [inaudible 19:00] ManagementTrainee position, Title Insurance Company. It was a big title Insurance companies, first American title and their management trainee position was, you start in the mail room and you work your way up but because I was studying mortgage foreclosures… Mortgage foreclosure boom was hitting in the early 90s and about that time the Title Insurance industry had never had any title products that went after mortgage foreclosures. So I realize rather quickly because the real estate market is up and down and refinances go up and down so the title companies were laying off people, 30% of their staff sometimes depending on how the market was working so I realize really quick cause I was married with a new child… If I’d mastered something that nobody else could do, they need me and they won’t fire me or lay me off. So I realize rather quickly as a Title Searcher that nobody touched mortgage foreclosing titles or commercial titles.

So I would come in at 6 in the morning and from 6 – 8am I would punch out my quota on the easy searches and then I’d rock my brain, research pieces on mortgage foreclosures and commercial and I mastered that and became the expert for the company which eventually to them… My boss being asked who is your best mortgage foreclosing title searcher cause we’re starting this brand new national title unit and mortgage foreclosures, who is that? Well that’s Dave. So then I became the first title officer for First America and out of California to specialize in dealing with mortgage foreclosures, one stop shop. Within four years I was tasked to develop the national defog group which was where lenders could come to one office and we can handle all the title work for foreclosure and REO from one office. They didn’t have to go from state to state or county to county and that was brand new and that defog group was started by me with a laptop in a one man office.

By the time I left that company in 99, we were doing 50,000 mortgage foreclosures a month, 26 million dollars in business and I had foreign employees in my unit. So while I was developing… to develop that title product I was buying mortgage foreclose properties cause it’s a knowledge based sale. You had to be able to speak a certain language. Those of you who are listening right now working would Sandra, tax deeds like we are talking earlier. You talk about a tax deeds for family like what the hell is a tax deed? Well it’s the same thing. It’s a knowledge base socio so you need that knowledge so that made me very valuable because I could speak that language and to speak the language I thought there was always important to step into the shoes of my clients, even a bank who’s foreclosing. So I bought mortgage foreclosing titles so I could speak with Attorneys. I could speak their language and the same thing here with tax deeds. I was getting calls from institutional clients, nationally in 1994, spending hundreds of millions of dollars a year buying taxing certificates and then you got it foreclose and they got the property and now they go to try to sell and as soon as they walk into the title company the title company says yes Sandra we don’t insure tax deeds. You got to file this thing called a quiet title and a quiet title for those of you out there listening; quiet title action is basically quieting, clearing, quiet…. We want to quiet or clear the title in court. That’s where you basically sue the former owner who lost it to tax sale, who didn’t pay the taxes. The mortgage companies and the lien holder the time of that foreclosure, you’re going to sue them in court and get the Judge to clear or quiet the title in your name.

Now, that’s going to take you six months or longer in most markets. Florida, Sanders state is a judicial foreclosure state. The mortgage foreclosure of this kind of quiet title can take you six months or longer cost you $3000 to $8000 to do. So in 1995 I found a full commercial on tax liens and I was up late one night so I went to a seminar because I get these calls on tax deeds. My superiors were saying that we don’t insure tax deeds you know and so I remember I went to this tax seminar in Orange County California where I live and I remember sitting there and I remember the speaker goes, “when you get a taxing certificate and then you get a tax deed now you own the property, you’re going to have a title problem and if anybody out there can figure out how to get insurance on a tax deed he’d be a millionaire” and I remember the light bulb went off in my head and I started working at First American to work with my superiors why don’t we insure this? What’s wrong with a tax deed?

So let’s talk about….. First, let’s talk about what’s title insurance. Let’s go back to some basics. I know when I’ve done this before some people, what’s title? What’s title insurance? Ok so let’s talk about some basics on title insurance. Title insurance is basic title. Title is… the deed. When you go out and you buy… you go to Sandra, you go to a two day boot camp and you sit there and you bid at auctions you get the title of the property, a deed.  Now it’s called a tax deed in Florida and most stated sometimes it’s a Sheriff’s deed but mostly it’s called a tax deed. So now you have this tax deed and that’s title. Title insurance is just like another insurance policy kind of like your car insurance. You have insurance to protect your car in case it crashes and protects you against liability. People who crash into you, they’ll protect you. Well, title insurance does the same thing. You want title insurance to protect you against somebody trying to attach your title or take that property from you or say the former owner or Mortgage Company said, “we were wiped out by tax but we didn’t get proper notice so we’re now going to file an action overturn the tax sale and take your tax deed or title from you. You want insurance protecting you against that and that’s what title insurance does. It protects you as the owner of the property to sell, it protects you against challenges of your title from the former owner or from the mortgage companies or even from the IRS who was wiped up by your tax foreclosure that you purchased that. You want protection from them to come at you and try and take your title from you later once you’ve owned it or you’re trying to sell it and the other part is, seller you want to open your market place or your buyers to buying it from you and if they want to get a loan, the lender is going to require title insurance for them to feel comfortable to lend the money to your buyer to buy that property from you [inaudible 25:48]. So that’s why title insurance… cause if you don’t have title I am an investor. I’ve been buying again. I was approached. Dave why doesn’t First American insure? Why won’t these title companies insure? And so I started looking into it.

So I went out and started buying tax deeds. I had been self-instructed I invest in tax deeds and I’ve been doing it since 1995 so I’m one of you guys. I sat there in 95. I learned how to buy tax deeds. I’ve been buying tax deeds but I create title quiets again around what I learned so that I could speak from both sides of the equation. So I know that when you try to go sell… Sandra wants to sell me a tax deed and I am going to go, “Sandra did you clear the title?” and Sandra is going to go, “well no I don’t Dave I’m just going to do a quick clean on this one”. Now that I know I’m inheriting her title problem and because of that I’m going to now negotiate with Sandra for a big discount.

Now if Sandra can come back and tell me, “Yes, Dave I went through Tax Title services and I got the certification and I got a title insurance policy from their underwriter and now Sandra and I are going to talk market value. I can’t discount her. I can’t use the technique like “you got a title problem so I don’t want to discount”. She’s like, “No Dave, my title is ready to go. This title company is ready to insure you”. And now we’re talking market value and it opens up your market places cause otherwise you can always sell in quick clean deed. The only people you can sell it to are those who have all cash and not everybody has all cash especially if you picked up a house… I‘ve bought tax deeds many tax deeds in Florida mostly houses and your buyer are going to want to use a loan and not going to pay all cash so that’s why you want title insurance so your lender will lend to your buyer and that opens up your market place to other buyers. The issue with tax deeds is, why won’t the title companies insure? And the reason is because they don’t trust that the foreclosure process, the notice that goes out. The government or anybody can take a property from you without giving you legal notice to your right.

Hey Sandra, you didn’t pay your property taxes means the tax collector is foreclosing on you and you have this amount of time to pay your taxes and if you don’t we’re going to sell it to an investor who’s going to pay those taxes cause we need that tax money to run our hospitals and pave our roads and run our schools. We need that money. So because they can’t collect that money they open it up to investors to buy taxing certificates, to give them 5% on their money, to order them to collect because they need that money and then if they don’t, nobody redeems then they will sell an auction to another investor which is usually what I’ve done and I think the two day boot camps are about where you actually would go, Sandra correct me if I’m wrong, you guys will actually sit down, go to an auction probably and do a model auction where you’re just watching cause I’ve always recommended that too. People ask me, Dave,” I don’t have any money and I don’t know anything about tax deeds”. Go to an auction just sit there, do your homework as if you’re going to bid, fake bid, realize what the bid was. We get caught up and auctions and then once you feel comfortable with that then you can start… I think that’s probably what your boot camps. Is that right?

Sandra:  That is precisely right Dave. My boot camp on the first day we do go through how to do the title search and all the in class, in house items. On the second day we go an actual auction but I always tell the students, “listen you are not going to learn to do this until you actually go to a sale especially after you’ve done the training and you’ve learned about it. Go to a sale because then you can actually start applying some of what you learn. They’d be surprised at how much they actually did learn cause it is a lot of information much of this is running title searches and pick a property even if you don’t have the money. I tell them exactly the same thing. Do the market values; see if it’s a good deal. I even tell them approach the investor; ask them, what’s your plan? What do you want to do with this? What are you going to do? Go check out the… If it’s a rehab, go check it out later see how much wok they put into it. What they’re selling it for. When I first got started that’s how I was able to tell what I could sell a property for. I’d go back, you know, and check out a deal that happened and see what they paid for it, what I thought the value of it was, how much money they made on it and then that’s what enticed me when I was sitting on the fence cause it is kind of daunting and difficult when you don’t know anything about this business to actually get in there and do it when most of the times the investors that you know are not out there doing tax deeds. You know like very few of us actually do tax deeds in the circles that we run.

Dave:  Right. Again, it’s kind of like, when I talk about this stuff….  Remember back when you first got your license, your driver’s license and the first time you went to go drive? You were really nervous right? Scared out of your wits, well it’s the same thing with tax deeds and going to your first auction. You’re all nervous. You’re not sure what to do but three or four months later if you attended auctions you’re actually now bidding, you see how it works and you get comfortable. What was once uncomfortable becomes comfortable whether its driving… the first time you got your license, the first time you graduated from college and you got your first job and you’re on the first day on the job you’re all nervous and three days later you’re like, “I am bored, I want a new job”. So it’s the same kind of concept.

Sandra:  Exactly the same thing. I remember I use to get nervous and it took me like a while to get over the nervousness, bidding at the auction cause it was like ok I’m committing

{Cross talk 31:19]

Sandra:  Yeah erase that pedal. You’re putting up these numbers. You’re like, are they going to stop? Are they going to let me get what I want, you know. What is going to happen? Am I bidding on the right one? Will people stop bidding? And you’re like, ok. I wonder, why do they keep bidding?

Dave:  But then again that’s why learning from you is important, knowing what the value of that property is after rehab or actually in it’s as is condition factoring in rehab, come down from that, say…. I usually don’t pay more than 70% after rehab or after rehab value and then you want to factor in your cost, your holding cost, what kind of repairs. Ok so, at 50% of value, this is my number and you can’t go over that number. You will get caught up in auctions cheaper and when you over pay, cause you’re like, “oh I’m at my number and I’m going to bid 5000 more”. Don’t get emotion involve your deals. There’s always going to be more deals and you make your money on the buy side. You never make it on the sell side. It’s always, if you buy it right and don’t commit… I’m sure you teach that and…

Sandra: I do. I tell them, write your number down. Make sure nobody else can see it but have it in front of you and do not go… like I actually do ranges. Don’t go over your number. You know I think it’s harder for men I’ve notice over the years because maybe it’s the macho or something like that. They start bidding and if they get eye contact with the other bidder sometimes they just keep going. Is it the ego or what? They just go and they go past their number sometimes.

Dave:  Sure. It’s always about taking action. Once you do start making a bid, you start feeling more comfortable. It’s all about knowledge. If you’ve done your homework, gone for your two days training, done what you need to do, you can feel comfortable to bid and you just don’t get caught up emotionally in the real estate. Now that’s hard. I remember when I was 20 years old, I wanted that first property and I wanted to make a million dollars. Don’t over pay. At the same time that comes just from knowledge and all that. So, let me back track a little bit more towards the tax deeds. Title companies don’t like to do these things because imagine you buy this tax deeds, Sandra you bought this tax deed and try to go sell and then all of a sudden the former owner comes back and the former owners and a lot of time you got to do… Why do people not pay their property taxes?

One of the biggest reason is, the people have passed away. They are no longer alive and the heirs are scattered and they don’t… they weren’t notified. So imagine one of these heirs out and says, “Sandra, my parents passed away. We never got notified of this tax sale and if we’d known that we would have paid those taxes and stop this. We’re now going to sue you and take that property back from you. And if they can prove in court that they weren’t notified properly with that notice that goes out to them, then the judge will give that property back to them. It’s called due process rights. It’s found under the 14th amendment and tax deeds law is very specific. You can’t take somebody’s property from them without giving them good notice. And so that’s the issue with this and why they say. The title company goes, “yeah Sandra, we don’t want to take that risk on. We don’t trust that that noticing is always done right. That’s a risky title to us so go hire an Attorney sue everybody, quiet or clear the title in court then come back, then we will feel comfortable to insure you. But imagine having this asset and can’t do anything with for 6-9 months and mean well and stretching forward as you’re probably aware. Some of these properties are bad and the code enforcement liens are very strict and in Florida they are very, very aggressive. They actually can in Palm Beach they will fine you $250 a day. So now all of a sudden you’ve bought this property, again for those of you who are buying tax deeds, you’re like, “Dave what’s one thing you should look for before bidding on a tax deed?” and the one thing is, [inaudible 35:27] tax sale. Assuming all the noticing is good and we’ve blessed it and title company is going to insure you [inaudible 25:36] are wiped out, you’re mortgages are wiped out; your state liens are wiped out. Even the IRS liens, so many of those and sometimes they say that the IRS liens aren’t wiped out or they just have 120 days extra time to pay off and redeem you. After the 120 days we do recognize that they are wiped out as well but the only thing that’s not wiped out is what’s called municipality liens. Liens that are in the city’s name, water, sewer, electric bills and especially code enforcement liens. Well you just made a bad investment. Coding liens will survive a tax sale. You can’t wipe those out.

Sandra:  Those are the ones we look at very carefully. In Florida sometimes. A lot of times you negotiate with the code enforcement board and they look at you as their friend cause you’re coming in and you’re fixing it up, you’re cleaning it up. Listen it wasn’t me that did this. I’m the one that’s putting this thing back on the tax rolls and another thing is a lot of times even the properties that are cleaned up nicely, the grass is cut you can always tell too when you can look at a properties and tell if somebody cut it with care or if they just came through, mowed it, they were gone. Cause sometimes you will find them there boarded up but the grass had been cut and that’s usually code enforcements been cutting it too and they’re also going to assess the liens. And I had a project to clear a property where code enforcement normally put a lien on this gentleman’s property because he wasn’t cutting the grass or anything. It wasn’t even on the particular property I bought at a tax sale and this happens all the time in Florida. It was for another property that he owned. So once you have a code enforcement lien.

Dave:  It’s called cross collateralization

Sandra:  Yes once you have…

Dave: It’s called cross collateralization

Sandra:  Yes once they have the lien on one property in a county, they attach his address to everything. So you got to deal with that…

Dave:  Yeah.

Sandra:  Even if it’s one that you bought.

Dave: Yeah.

Sandra:  So that’s another consideration.

Dave:  We had a claim last year on this very issue. It was a vacant lot, we had certified it, title Company insured it. The company that owned it owns six of the parcels surrounding it as well so there was this lien that we missed that was against another property of theirs. This was Palm Beach County. Palm Beach County contest that. Look, that lien is not wiped out and you owe us $39,000. So again, why do you want title insurance? Because now that’s not your problem, that’s our problem or the title insurance company. So we wrote a check to the Palm Beach County for 39,000 because of that cross collateralized lien was against another piece of property but it attaches to all of it and the code enforcement department was on that, draw a check for $39,000. So that’s why you want title insurance. That became our problem or the title company’s problem and not yours. So that’s it, you’re still in your right. Cross collateralization liens are huge. We had one other claim, like five or six years ago where Miami Dade County…. At times you’ll see old sub-divisions back in the 80s where the county itself was giving out a loan for you to rehab blighted properties or demoed properties to bring them up.

Sandra:  I know exactly what you’re talking about.

Dave:  Yeah, so. We had this tax deed like five years ago and then there’s this old Miami Dade county loan from the 80s for like $20,000. Miami Dade County got notice. We recognized that they were wiped out. First five years of our company, we were considering county mortgage as a county lien, come to find we were and again why you want title insurance. So Miami Dade County caught us. We were wiped out by that now you owe us. The balance was $13,000 we wrote a check for 13,000 to Miami Dade. Our service is what is called a certification service, basically an underwriting. We will underwrite or bless the underlying foreclosure of the tax sale to make the title company feel comfortable. And we issue a certificate to them. It’s not a legal product. It’s not a quiet title. It’s not a guarantee. It just makes the title company go, if the tax title service blesses this, because they are the experts and we trust Dave and tax title, we will feel comfortable to insure. And so if you had…Sandra and your students had a 30-60 days process also a cheaper process. In Florida you can get a quiet title for 300 bucks or so I’ve heard.

Sandra:  I don’t know about that. I think right now it’s probably at least $2500.00.

Dave: Ok. We charge 750 to 1500 dollars on an average up to $150,000 now that’s our fee. The other cost which is the same like in a quiet title like your title search, a review, the skip tracing. We have to sometimes pay a dollar per page for foreclosure file which in Florida we don’t have to do cause…

Sandra:  Everything is online.

Dave: It’s all on line. It’s awesome. I love Florida. The cost in that running. So our service run about 1600 to 2300 with all your cost title insurances on top of that. The real value is in the 30-60 day time frame. So you get your tax deed and while you’re waiting for our tax deed you’re actually could be using your receipt of sale because sometimes it take 30 days to get your deed or. They’re pretty good in Florida. With an over attitude but by the time we do our job then you’re able to market it, sell it and its faster and cheaper alternative. That’s what our product does and we’ve been doing it for 15 years, we’ve certified over 15,000 of these and this is just nationally. It’s not Florida. Florida is our biggest state and we love Florida because there’s tax sale going on every day. Of course that’s why you do your two day boot camps…

Sandra:  And we got 67 counties and most of them are on line.

Dave:  Sales going on every day. There’s only one tax certificate sale a year in June but there’s always a tax deed auction going on somewhere in Florida. So it’s one of our biggest states and we work with most sales people like your clients. Our biggest client base are those people who do a couple deals a month all year long. That’s how they make their living. Like Sandra what do you do outside of the teaching? You’re an investor too. I’m an investor. You don’t just teach it, you actually do it and that’s what separates you from a lot of others. We love Florida. We do this nationally. This is a national issue and again this is 15 years now that I left First American in 2000 and I started Tax Title Services, July 17th of 2000. Started right out of my house.

Sandra:  Speak about your pretty big wig at First American and decided because a lot of my clients and students and investors I meet they know the name First American right….

Dave:  Sure

Sandra:  And you were pretty high up in First American. First American blesses this type of service to the point that they will allow a property to have that certification so they can do… and at least when I started with you guys, First American was the only one out there allowing the title insurance on these. So talk about First American, who they are, how big they are…

Dave:  Sure:

Sandra:  …and also what you do exactly.

Dave:  I built this for First American and to be honest you know, First American is not just the only underwriter we work with. In other states we’ve worked, we work for Stewart Title. We’ve worked with Westcor. We work with NHI. We just established a steady relationship in Florida ship in Florida with North American Title Insurance Company. I was a Vice President there’s and develop this national foreclosure group for them. But they’re the biggest standalone title company in America outside of Fidelity. Fidelity is the biggest because it bought out everybody else. First American is still pretty much the biggest standalone company. It’s a fortune 500 company. It’s been around since 1869 and just started here in Orange County, California. I started in their mail room when I was 21 years old and I built my career through them. I learnt how to create these products and I started my own company. So I created their network. So allowed me to step in and build my national ability to do this through them. But other title companies have come on board and we don’t just work for First American. In fact First American recently is reevaluating tax deeds. You think after 15 years the title companies would feel comfortable. They are actually more skittish now than they were 15 years ago.

Sandra:  Why? I don’t understand especially if you give the guarantee. They won’t lose in this.

Dave:  you know what? I agree but again title insurance companies are very conservative. That’s never going to change. There’s always going to be some Attorney or case file out there that scares them and again they’re an insurance company and they don’t really like risks and this is kind of a risk product. I call it calculated risk. Now if you ever coming like alright I’m just going to step in and take that risk away from you, I feel you should feel more comfortable because I’m involved. I wish that could come cross more with the industry. It still doesn’t because there’s always some…

Sandra:  Dave, you know how I describe to people what you do and you let me know if I’m correct or not. I say it’s more like a non-judicial quiet title because you’re basically going through and doing the same thing the Judge would do in quiet title case.

Dave:  Yeah cause what we do is a hands on approach. We’re going to look at the noticing and when I see a.. we order a title commitment, we’re going to see who is the owner at the time of the tax sale, who were the mortgagers, who were the lien holders and then we order the foreclosure file online which is the certified mail, the first class mail that goes out to the owners, to the mortgage holders at that time.  “Hey Sandra if you don’t pay your taxes you’re going lose your property. So that’s the noticing. We’re just going to look at the noticing and if we see that noticing was sent to Sandra and that notice came back undelivered well Sandra maybe an adversarial party roaming around not knowing about the tax sale. So we skip trace Sandra and I see that if I was doing the noticing on behalf of the tax collector and I found Sandra over here, well the tax collector should have found her over there using reasonable due diligence and that’s what the court say. If notice comes back undelivered you have to go Mr. Tax Collector, Mr. Attorney, Mr. Tax deed investor like in certain states, you have to do the noticing. So like in Georgia, I don’t know what states you teach in but Georgia you have to do the noticing yourself. In Missouri you have to do the noticing, in Louisiana you have to do the noticing.

Sandra:  Yea, they’re quite a few states like that and Florida luckily you don’t have to do the noticing yourself.

Dave:   You don’t. So the point then is whoever did that noticing. If somebody else did it… by the way, we offer that service where it’s applicable. Not in Florida, You don’t need us there. But in states like Georgia and Missouri, we actually… The ideal process for us, if due process and not noticing is the issue… if the title company could do that noticing on behalf of the tax collector or on behalf of you applying for a tax deed in another state like Georgia. The ideal process would be… If we could do that noticing we’re going to over kill it and make sure we notify them thirty different ways so they can’t argue that they didn’t get the notice. So that’s the kind of the philosophy that we take in Florida. If I was doing the noticing on behalf of the tax collector and I see the notice was sent to Sandra and came back undelivered… well if I skip traced and used reasonable due diligence to find you and I found you somewhere else other than where the notice was sent and not delivered well now you’re a risk to us.

Isn’t that the risk that title companies try to minimize? But they’re only going to do it through the court. Why can’t you minimize that outside of court? Ok I see that Sandra wasn’t notified I see a letter there why don’t we pick up the phone and talk to Sandra? Why don’t we send her another notice? Why don’t we know on knock on her door? “Hey Sandra, Dave Schumacher, Tax Title Services, looks my client purchased your property o tax sale, you didn’t pay your property taxes. Looks like a notice was sent to you and not delivered. I’m making sure that you knew about this, what do you think?” And Sandra goes, “Well you know what, by the way Dave I kind of teach about tax liens and tax deeds I kind of know my rights and you can’t take my property and without giving me proper notice. Right, so then you’re specific in the party and know Attorneys. “So hey Sandra we can do this in the court or we can do it out. What do you want?” You want to keep the property? “Oh yeah Dave you know, I’m going to be honest, I kind of inherited this deed, my parents were going to retire. Me and my brothers and sisters we argue. We can’t get along. We knew about it but we’re letting it go.” “Ok well Sandra I could actually file a quiet title and sue you in court and that just get really messy. I don’t want to make you upset. If you don’t want the property, what if we sent you some money for a quick claim deed in lieu of having to sue you in court because I’d rather pay you Sandra than an Attorney.

Sandra:  Than an Attorney. Exactly.

Dave:  That’s call mediation, buy backs or workouts which could be another topic we can talk about. Outside of our service or quiet title, if you get a quick claim deed from the former owner by cash for quick claim then you solve your title problem. Now you’d have to do that with mortgages as well and that’s not always practical. It’s not always practical to track down people. About 20% of these when we go through this vetting process; it’s a vet where we call slap in the bee eye. We’re slap in the eye. We’re seeing who wants to come out and sting whether it’s the former owner, whether it’s the mortgage companies, whoever has interest at the time of the tax sale even if they got notice you know they still maybe adversarial and we may step into a frivolous claim, so cause we talk about hierarchy of risk, this is all about risk. So like all the times in your file trips you know you guys will do a drive by, buy a property that you may be wanting to bid on, we actually on every property do our due diligence to assess the risk of challenge. What’s the risk of challenge? Whether everybody got notice, whether everybody didn’t get notice, what’s the risk of people coming out and attacking that title? That’s part of our process and part of that is we will send an inspector out to the property and snap a picture and determine the occupancy.

So imagine you know before we even pull the noticing, before we pull anything, we get this picture back and now again the house that I described to you, the weeds are ten feet high, all the copper has been ripped out of it, windows are blown out, tree in the back yard’s falling down.  Using kind of common sense and predictable behaviors, what happen to the owners?  Do they own it anymore? Obviously that’s property’s been abandoned along time. What about if there was a mortgage on the property? Why wouldn’t the mortgage company foreclose on that property and seize it, take it to sale and do an REO? Because it cost too much to fix it they more likely charged off because it isn’t worth them to foreclose, fix the property up, put it back on the market, pay a realtor and go through that.

So using predictable behaviors, risk of challenge I call it, it’s a totem pole that’s low. The risk of challenge is low. Now are we still going to confirm notice? Yes but are we going to really track down the former owners if they have been passed away for 20 years or the mortgage company, this was a 1999 AMP Self loan which isn’t in business anymore. No they have charged up. That’s the high rate. Now on the other side of the spectrum in Florida, you send the inspector out and now you have a 2006 new construction. You got two mortgages, they’re both foreclosing on it, the home owners are still living in it. Now everybody got notice. “Well Dave everybody got notice. You should be able to certify it.” Well you’re seeing predictable behaviors, obviously Wells Fargo, Bank of America, Chase…. Why are they foreclosing on a property where they got notice for the tax sale? Why is the owner still living in the property? Well the owners are just waiting for the mortgage company to kick them out because they’re in foreclosure. They got notice but you don’t have possession. The house is new.

Sandra:  Multiple obstacles.

Dave:  Yeah so. Using predictable behavior you know eventually Wells Fargo. You can see that the foreclosing Attorney got notice, Wells Fargo got notice. Why didn’t they pay taxes and stop the sale? Cause technically that’s going to work but obviously they’re still foreclosing. So obviously the left hand and the right hand don’t know what’s going on. These banks are huge.

Sandra:  They never know.

Dave: And they’re getting notices. Yes. So using predictable behavior what’s the risk of challenge Sandra? Do you think that eventually Wells Fargo is going to catch up with the tax deeds?

Sandra:  Oh of course. Before the sale I talk to the people in the house. That’s how I assess my risk to find out, friend or foe here.

Dave:  Right. “Hey Mr. Home Owner for 500 buck you’re going to lose this property anyways how about you authorize the release form so I can actually talk to Wells Fargo? Cause they won’t pick up the phone and talk to you right. You know how hard it is to talk to Wells Fargo with an authorization release or Bank of America? So because of my background in mortgage foreclosures and I know all the foreclosing Attorneys in Florida, who can I contact to determine the risk of challenge? The foreclosing Attorney. “Marshall, Dave Schumacher. How are you doing?” “Dave doesn’t tell me you got wiped out by a tax sale again.” “Yep. Can we get a notice?” “Of course. Check your email.” “Dave will your client cooperate?” And then that’s when you go into mediation and by back and workouts. And we’ve had a couple.

Sandra:  I had two of those and they were ones that you guys had worked on. One was a condo that we purchased and it ended up was going through the foreclosure process at the same time as it was going through the tax deeds sale and so what happened with it was that apparently sometime after we bought the tax deeds sale the bank applied with their Attorney for the Certificate of Title. And it’s like are you kidding me? And so that kind of slowed down the process for us and I don’t remember how we got it cleared up.

Dave:  Well how we got it cleared up is I just told you. We contacted the foreclosing Attorney cause the foreclosing Attorney hasn’t updated his title search that picked up the tax deed that was issued before they got their own certificate title. So then you contact them again you could do this in court by suing them but why don’t you just pick up the phone or we will. We’ll pick up the phone.

Sandra: When I try to pick up the phone to call them they did not want to talk to me but obviously you got the relationship with the Attorneys to talk to them which is one of the benefits of using your service cause Attorneys sometimes they only want to talk with other Attorneys or people that are in the Mortgage industry or title industry.

Dave: That’s the knowledge base sale. How I’m talking to you, I can go toe to toe with that Attorney. If I don’t speak their language, they’re not going to pay attention to me or they’re going to go,” you don’t know what you’re talking about. So using common sense instead of sitting them in court, pick up the phone cause if you quiet a title and sue them that Attorney’s practice is on the hook because he screwed up. He got notice. You should have told Wells Fargo,” hey we got notice. We need to pay these taxes to secure our interest so we can continue to foreclose. Unfortunate for you to do that Wells Fargo is going to look to him to go “you got to make us whole buddy. You screwed up.” And so he is going to go, “well, I’m going to file a law suit for free to tie this property up to force Sandra to deal with me and to settle with me so I can save my behind with my client. So knowing that and you know eventually they’re going to catch up with that tax deed so we pick up the phone and you know we have one deal, client paid$72,000 for the property a week later they send it to us while we’re going through our 30 days process. They got a full price contract for172,000. We ran the title. We got the foreclosure file saw that Well Fargo was foreclosing, Call Wells Fargo Attorney and then Wells Fargo goes, “Dave would you like to buy the property back? Will your client cooperate?  Call the client, clients says, “Dave yeah we had a $100,000 profit here but we’ll take 50,000 on top our 72. We’re good guys. We’ll cooperate with Wells Fargo. Within two days Wells Fargo underwrites a check for $125,000.

Sandra:  That’s nice. I need to buy those.

Dave:  Well again, those are homerun people. They do happen to play the game long enough. That’s normal but

Sandra:  Precisely.

Sandra: You know on the one that I did they even broke into the property, change the locks and put a different lock box on, everything had a little file number on the lock. I called the agent, “I am like what’s going on here?” The agent emails the Attorney and then the Attorney responds to the agent, the agent forwards me the email. I remember the email said something about, “give her the key right away.”Cause they knew they were wrong

Dave:  Yeah

Sandra: They knew they were wrong.

Dave:  So again. The point is even when we can’t certify it there is going to be 20% of it [inaudible 57:37] especially in Florida where when you see a mortgage foreclosure paralleling on tax foreclosure where we put you in a workout or a buy back or a mediated settlement. Now isn’t that the same results I you quiet the title in court and Wells Fargo contest it and 9 months later you settle? We get that same result in 30-60 days just by picking up phones and doing hands on curative work. Now we don’t make much money on that deal, we charge the 750 upfront to pay for cost like title search and our review cause we don’t work for free but we’re not making money when we do a buy back and workout for you but we’ve protected the title company, we’ve protected you from doing a quiet title only to settle later. You didn’t pay that $10,000 and Attorney’s fee to do it. For $750 to $1000, you got the same results as if you sue them in court and then settle but we did it out of court and we’re faster, friendlier and cheaper because we weren’t able to certify the title insurance but we created so much value you are going to send us more work. 80% of these were going to go through this underwriting process, this vetting process, this slap in the bee hive process and we’re going to get to the point where we do feel comfortable with that and you have possession of the property and no we’re going to say Sandra we’re ready to certify, here’s our invoice and the title company is ready to insure you. You then market the property, get a buyer and a contract and now you’re closing and you’ve done this in 60 days able to market the property.

Sandra:  Dave

Dave:  80% of the time we get to do that.

Sandra: Answer some of the critics because I’ve had people challenge me and say this, “well I’m sure there are probably a whole bunch of exceptions in the title policy because you have the Tax Title Services instead of a quiet title.” And I tell them all the time, “it’s pretty much the same thing.”

Dave: One exception that is in there is related to what is called marketability. Marketability is the ability for you to shop your title to any title company out there. Now, because we know that, the title registry doesn’t like to insure these things, that’s why they require quiet titles right. So because of that we know that not every title company is going to insure you. So the caveat to this is there is an exception to marketability meaning we have to, let’s say look… you have marketability defined as the insuring titles company’s willingness to insure you in the future. So if Westcor insured you through our process you can always come back to Westcor for future insurance and then you want to… So because the state of Florida or South Carolina is called a buyer attorney state. So you have to work a little bit harder with a tax deed that’s not quieted because buyers have the right to choose title and if you allow that buyer to choose the title company or their attorney, that attorney is going to go, “I don’t insure tax deeds.” So I’m not allowing my buyer to buy and you have wasted your time.

So there is caveats to Florida and South Carolina is you want to pay for the title insurance for the buyer. You want to put… Again I am not an attorney, I’m not giving legal advice. This is just recommendations that I have seen clients, what I have seen you do Sandra, is you want to control the transaction, you want the buyer –, “Mr. Buyer, I purchased this prior to a tax deal. I’ve got a title policy from Westcor. They are willing… The insured me, they are willing to insure you. I am paying for the title insurance thus I am running this title through Westcor and if you don’t like it, don’t buy my property because otherwise that attorney, that buyer’s attorney, if he’s not underwritten byWestcor, let’s say he’s underwritten by Fidelity the Republic  Attorneys Title, they are going to go, “Hey Sandra, we can ensure this for 4 years.”

There is a four-year-old in Florida for people buying in Florida it is after four years, is called a statute limitations period meaning after four years, the former owners and mortgage companies can’t attack the title. They lose that right so for four years our service eliminates the four years but it comes with… Your marketability to shop your title around and get future insurance on that is going to go through the insuring title company because we can’t guarantee you that old Republic or Attorneys will insure you again. We can tell youWestcor will or other underwriters that we work with will.

So after four years though most title companies will insure a tax deed in Florida.

Sandra: That’s what I like about your services. And I tell people whenever they do have an objection to it I said, “Not only is tax title services doing this… for example if we are using First American, First American says if you ever go to another title company in the future or your future… Let’s say the person you sell the property to, they go to sell it later on and the title company does not want to insure it, just come back to the original title company; First American orWestcor or whoever it was and we will do it for the life of the property.

Dave: That’s right. I was in Florida last week meeting with a new title underwriter and their senior underwriter actually worked with me eight years ago and goes, “Dave, I trust your process more than I trust a quiet title.” Because a lot of times in the quiet title action, you don’t get actual notice on the former owner or whoever you are suing and because of that you have to wait 60 days to a year for an appeals period where as we are actually going to make contact with people. We’re going to hands on make it, we are going to flush them out. It is going to be won by default.

So we have title underwriters going, “Dave, we just your process more because you are getting more involved. You are getting your hands muddy, you’re getting dirty with these people, you’re bringing them forward.” And so the quiet titles sometimes are won without the people getting actual notice where our service is always make contact and make sure that these people know about the tax sale, that they get notified…

Sandra: I think it is even more work than is being done at the quiet title process. I know before the County notifies everybody they send the mail and if they don’t happen to be at that address where they sent the mail at, they are not required to go that much further to skip trace or anything.

But if you are doing a quiet title, they do hire, you are supposed hire actually your attorney that’s representing in the quiet title with hire an attorney. I think it is called like an [01:04:10 Ad lightem] attorney who will actually kind of work for the other side and do what you guys are doing; making sure that there is actually no way to find that other person, to make sure everybody has looked under every rock and that’s exactly what you all are doing and talking to them and saying, “Listen, if you want us to buy you out what’s the deal? Is there someone that is going to object or not?

Dave: Yeah. Well again those are called guardians. And guardians are not… They are not going through the process that we are. They are going to try and skip trace, look in the phone book and try but they are going to do this little research, file an affidavit, “Yeah, we can find them.” We will find them and we will actually make… Because we are on the hook. The attorney is not on the hook in a quiet title, he’s got judgment. He wants the court to give him the judgment. We are on the hook. We are so we make sure that nobody can come out and attack it or if they could at least we can defend it or at least win it or know that no one is going to come forward after all of these years.

Sandra: So for my investors and other investors out there who are interested in using your service. I’ve got students that come in from all over the country as well and probably even from Europe and other countries as well and they are buying all over the place from the details that we are teaching them.

What can they do to, before they come to you with the service, what are some things that they can do like for example one of the things I like to do when I prepare my order form to send over to you is I will also get the link to the tax deed file and put it in my email so that you guys will have it. Sometimes I even download it and say, “Hey, here the file.” Anything just to make sure it goes by a little bit faster because I realize I am marketing the property and usually by the time I find a buyer, it’s ready to get the certification. What can we do to make the process easier?

Dave: You nailed it. That tax deed file is… Florida is super easy as you know because everything is online. I wish all nation was like that. In other states we have to actually order that and that can take up to 30 days to get and it is not online. So we’ve got… That helps. And the other part is if you’ve already been by the property, if you’ve talked to the owners, you’ve already made contact, is the property abandoned? You’ve got a lot more details to us if you have any kind of summary of the property you can submit, “Hey Dave! Drove by the property, nobody is there.” Or, “Actually I did speak to the occupants, then you about the tax sale. They are in mortgage foreclosure. They’ve got their bags packed, they are ready to get kicked out.” So all of that kind of helps us.

Any information you have about the property I am sure most of you are driving by the property before you bid especially if you are in your two day field trip thing with you and or you’ve been by a property once you are the winning bidder then those details help us in doing our job in – what’s the risk of challenge?

So if you have any details related to that, that helps. But the number one thing I tell people is – we are your team. Sandra is part of your team, I am part of your team. We do our job in the back end and handle your title issues so focus on buying right. Figure out if there is cold liens against the property. You’ve got to take the subject too and then have your exit strategy – what are you going to do with this property? Well Sandra I am sure you teach them like bid right, have an exit strategy and let us handle the title side for you.. But again, if you have the foreclosure file, that helps.

If you have a relationship with ant title company that we work with and we’ve got the title commitment already from them, great. If you provide the title commitment in a foreclosure file, sometimes we can write the thing in a day. Don’t hold me to that because we do like 200 of these a month, so we process oldest to newest, we say 30 to 60 days for a reason but all that helps you speed up your own process. And if you have any details related to the property, please include that so that it helps us in analyzing the risk and if you’ve already helped us with that you are helping yourself.

Sandra: Dave, how many have you seen that you actually had to pay off out of how many of them you’ve had successes with? Can you talk about that?

Dave: Well, we’ve only had one… Two paid claims in 15,000 orders.

Sandra: Wow!

Dave: We have had, we’ve total cold lien showed up and we missed that and we wrote that but that wasn’t really… We don’t consider that the claim. We’ve had like three or four of those but we really only had one or two paid claims. One claim was because we didn’t issue our certification and the client got upset and sued us.

Sandra: What?!

Dave: Yeah. They said they contracted with us and we said that we can and we are ready to certify one time, they never pay for our service, came back a year later and we said, “Okay well we need to update everything. You need to disclose everything. Has anything happened in the past last year?” He goes, “Yeah, we are being sued by the former owner.” And I’m like, “Well, we can’t certify that.” And that gets dismissed.

Well the person ended up passing away and they’re heirs came forward and previously attacked us and our E&O carrier decided not to fight it and spend hundreds… All this money fighting it so they wrote a check but that wasn’t our fault. We got in trouble for not issuing the certification which was like that makes no sense to me.

Sandra: That’s all good news to me because it seems like you guys will go above and beyond for your clients. And even those that probably didn’t even sign up for the service and later on wanted it.

What advice would you give to investors being that you are an investor yourself… I’m sorry I didn’t mean to interrupt you. You had something else you are going to say?

Dave: No, no. Just the other claim was where we actually certified client sold it, it was a Mississippi deal. And Mississippi in South Carolina, is called a strict compliance state so you have to really be careful because when one thing is wrong, the whole thing is wrong.

Let’s say Dave and Sandra were the owners of the property. Notice was sent to Sandra, she got it and notice was sent to Dave and he didn’t get it. Well Dave can argue or Sandra can argue, “You know, I got notice in Mississippi South Carolina even though you got notice you can argue well since Dave didn’t get notice that means the whole thing is wrong because you screwed up on that part it means everything is wrong. So now that you can overturn it so we had a claim related to that and it was like just a month before the two-year statute of limitation ran out and our client had purchased it and got a $200,000 loan to re-have it so that was the one claim we had to pay.

But again that’s why you would want title insurance because it becomes our problem. The title companies insurance, we protect you and that’s why you want insurance.

Sandra: Okay so let me make sure I am getting this right. At a 15,000 you’ve only had like two or a few claims, that’s amazing!

Dave: Again, that’s because we carve out 20-30% of these and put in people in buyback workouts. And again the same result if you quiet title an attorney and they contest it and they came forward and nine months later you end up settling for dismissal. We took that same result because we will flush out the adversarial party without suing them and we will do… So that’s why the title companies don’t see any of that and why they can feel comfortable because we are not presenting those. We are only presenting the ones that have gone through the net and have survived the process. And if they don’t survive the process, we’ve created added value for you the client and mediation, a buyback where you work out. Same thing if you sued in court with an attorney but then faster and cheaper because we are not attorneys. We’re just title people trying to clear titles, make the title companies feel comfortable, protect them, protect you, protect even the owners and mortgage holders on their due process rights and make sure that they have the chance to respond because if they don’t they may end up taking your title from you.

Sandra: Okay. Dave, if people want to sign up and explore your services, tell us what they need to do. I have seen your website, it’s really good, it’s got great information on there, you are always adding stuff to it. Tell us a little bit about what we need to do and also the fees you already went over, it’s 750 and then it’s a sliding scale from there?

Dave: Yeah, when our fees are again, with our portion of the fees are seven $750-$1500 on average and the total though if you go to the website, there is a pricing schedule, it is based on the value of the property, the range. It is 25,000 and under, 25 to 50,000 in value, 1500 to 15,000 in value, you can actually see what we charge and what the estimated costs are. That’s the cost second, the title search, we have to bite the title search for you, a title client which is used for your insurance if we are able to certify you’re not paying for two title searches, our skip tracing… So you are looking at an average of $1600-$2300 on average. Again check the website, the pricing schedule.

We only charge you 750 of that upfront as a nonrefundable deposit and that just covers our initial things that we pay for you like the title search that costs $250, our review fee to look at it is 375 and then the skip tracing to locate affected parties to make sure that they were notified, that’s another 150. Again all broken down on the website. If we can’t certify, you are only stuck with the 750 but once we are able to certify, then the balance will be kicked in and once you take that, you then are going to be marketing and selling the property. You will then fax us the purchase agreement which then we will set up at closing for you with our title agent, our vendors and then they are insuring you and your buyer.

Sandra: And the good thing about this is that we actually don’t pay all of it up front. We pay some of it in the beginning and then once we get to closing by then hopefully we’ve got a buyer and they are going to be the ones contributing towards those costs because the balance is due within 30 days I think on certification right?

Dave: Correct. We are able to certify within 30 days. We want to be able to pay within 30 days. Again, we recommend that you do not sell your property until we’ve done our job because if we put you in a buyback or a workout with an adversarial party who could overturn your tax sale or take your titles from you, you are upsetting your realtors who found a buyer and they are not going to be too happy when you can perform even though the contract says “subject to title” or whatever.

So we recommend and also again we talked about being able to negotiate from full market value instead of discounted values as a buyer you don’t have the title, somebody like myself who knows that you don’t have their title, I’m going to negotiate you down. If you already have that ready to go, the policy in place which sometimes we recommend when you are selling…

Sandra: Dave, are there any other companies that are doing something similar the same thing because I’ve had students ask me sometimes, “Hey, there is another company that’s doing it.” How is your service different?

Dave: Well we are the pioneer. The invented this 15 years ago and the only two companies I know that are doing this, there is one in Florida, there is one out of Michigan, is they copied me.

One of them is a former title agent of mine and the other is attorneys who were working with clients of ours. So they basically, lack of a better term, have copy catted, just passed on our service as their own. You can kind of read between the lines of how I feel about that.

So the reason is we have been around for 15 years, they have not been around that long. One of them just started last year, the other one has been around for a couple of years but again they have been… We are the pioneers.Sandra: All right Dave. And if you guys want to reach out to Dave, how can they find you guys?

Dave: Our website is www.taxtitleservices.com[01:16:40 distortion].

Sandra: Repeat that again Dave, you cut out for a second there.

Dave: Sure. www.taxtitleservices.com. You can Google us as well. Our site is a very nice site but it’s got a lot of information. We actually will post… We are on Facebook too. Actually will post auctions there. We try to give current news but everything [01:17:10 distortion] you can place your order online, you could track your order online, you could pay online. The website is a very extensive website. So please go to the website. To get further information you can email me or my staff through the website and my email address is DSchumacher@taxtitleservices.com. Feel free to email me any of your questions and my staff or I would be glad to help you in any way we can whether it’s an investment question or whether it’s a title question or a tax deed question or even to find out when standard events are. We post that too.

Sandra: Oh wow, thank you.

Dave: We actually do actually Philipe, I think you know Philipe.

Sandra: I know Philipe very well, he’s like your right hand man. He’s traveled down to the field trips and done events and come down and speak and talk to our investors, very, very knowledgeable.

Dave: Yeah. So Philipe, he or I, we speak at those events. Obviously Philipe has done most of yours but one of us will speak at your events, that will be another time that you guys can pick our brains.

Sandra: Come down here Dave to the field trip.

Dave: I would try, I’ve got your list and I will definitely try… I do like to speak I do like doing that, I would like to meet you in person. I really do as you can see I do like to talk about this topic. I do have a lot to offer and I really enjoy giving and being generous with my information.

Sandra: All right well thank you so much for taking the time to talking to us and I look forward to many other deals that were going to do and really appreciate your service Dave.

Dave: Great job Sandra, thank you so much for having me. Looking forward to the next time and seeing you again.

Sandra: All right, by Dave.

We will put the link the Tax Title Services and all the other resources discussed in the show notes on my website www.QueenOfTaxDeeds.com.

Please leave a review on iTunes and don’t forget to check out the show notes on www.QueenOfTaxDeeds.com. Thanks for listening! Happy investing.

Announcer: Thank you for tuning into another edition of The Queen of Tax Deeds podcast. You are encouraged to seek counsel from a knowledgeable professional on this or any other investment with which you are unfamiliar as to legal, financial and tax implication prior to implementing the techniques and processes discussed in this program. Always do your own due diligence and do not solely rely on the information provided here.