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Today I want to talk to you about a topic not many people are too familiar with - tax foreclosures and a little known niche in the real estate industry called "overages."
When a property is in foreclosure, it's usually there for one of two different reasons:
- The homeowner is not paying their mortgage and the mortgage company is foreclosing to possess the house.
- If the homeowner does not pay their property taxes, there can be a tax foreclosure by the local county and if that property goes to tax foreclosure auction, there is often a bidder who buys the property for more than what was owed in property taxes.
Let me explain #2 for you a little deeper - say you owe $15,000 in property taxes on your house and your property goes into tax foreclosure. The county will put the property up for sale at an auction. Say the property sells for $100,000 and from that, the county takes their $15,000 they were owed for property tax. So what happens to the remaining $85,000 that the clerk of court has in their bank account?
To learn more about property auctions, check out this post.
Where Do the Overages Go?
The homeowner has to make a claim to the county clerk and the court usually reviews these claims and awards the homeowner his money. This is an ideal world scenario, but in the real world, the homeowner may not know he has money coming to him and these funds eventually become the county's money.
The county government HAS NO OBLIGATION to notify or tell the former homeowner.
There are over 3,000 tax foreclosures completed on every, single business day across the United States. That's about 750,000 tax foreclosures every YEAR.
J.P. Morgan says these tax foreclosure sales generate nearly 13.6 million dollars in overages, or equity, every single day. It's unbelievable! They do NOT tell the former owner this equity is due to them because if it's not collected, the government gets to keep that money after a fixed amount of time.
Why It Matters
The reason why you should care is because you can get paid a finder's fee of 30-40% of whatever the overage is for connecting people to their unclaimed money.
My good friend, Bob Diamond, is an expert in this niche of overages and helps homeowners get the money that's due to them. He just recently told me that they currently have 2.2 million dollars in overages under contract in his office and they will receive fees of approximately 30% of that 2.2 million.
Bob is a Business and Real Estate Attorney and has been in the real estate investing industry for over 25 years. He actually became an attorney AFTER he was already an investor because he wanted to be more knowledgeable about the technical parts of real estate, which is how he found out about this opportunity I'm about tell you about.
Bob and I at our latest Maverick Mastermind Event in Florida
Success in Overages
There are a few things you will need to be successful in the overages business. Here are the four simple steps you will need to follow:
- Find out who is owed the money and who to get a targeted list. Because Bob is an attorney, he knows exactly how to acquire the list needed to find these former homeowners.
- You need to be able to locate the former owner using a skip tracing strategy and once you find them, you will need their cooperation to go get the money.
- An agreement between you and the former homeowner needs to exist so they know they can work with you, trust you and pay you your finder's fee.
- Secure your fee - get the check from the county and collect your fee from it (usually about 30-40%)
Overages can range anywhere from $5,000 to $100,000. Bob told me the other day that the largest overage he's seen since doing this is 1.3 million dollars. That's incredible, right?
Who Can Do This?
The overages market is a great place for a real estate newbie to begin their career. These finder's fees add up to a very nice income for anyone putting a full-time effort. Start with tax sale overages, and then work your way up to more complicated funds like mortgage foreclosure overages and unclaimed estates. By the time you've got a few tax cases under your belt, you'll feel like an old pro.
This is also a great way for someone who doesn't want to buy and sell houses anymore to stay in the real estate market without getting their hands too dirty.
Learn this Simple System
Bob refers to this as the "Robin Hood System" and if you think about, this name totally makes sense. There is a significant amount of money in it for YOU as an insider who would be finding this money for people from the federal government.
There's truly no catch - it's a unique, niche opportunity that virtually ANYONE can do.
This can help you take your business to the next level - these "overages" are a phenomenal way to make new money. You are helping people regain money to rebuild their lives, while making a nice profit for yourself.
Bob has extensive experience doing this for many years and being extremely successful at it.
To learn more about this simple, but lucrative business, join us on this FREE training.
Josh
CEO Strategic Real Estate Coach
CEO Freeland Ventures and Freeland Lending
CEO Yellow Jacket Properties
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Looking forward to the webinar.
how long does it take to get your first check?
How will someone without real estate or attorney experience go about helping former owners find their overages in Real Estate. Especially in my hometown Chicago, where there are lots of restrictions, and numerous restrictions in being in a position to help former owners claim theiir overages. I know you have many people dogned up for this event, but I hope you find time to answer this because it is cery important to me, and your response can help we get started in Real Estate Investing.
Hi George, thanks for stopping by the blog. You can learn more about our simple 5 step system on this free web class we're currently offering: https://getoneflip.com/checklist/?src=srecblog.