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Not Just Tax Deed Profits – Let’s Look at OVERAGES with Jackie Jackson

Recorder 2 30

Podcast Transcription

Dave Dubeau [00:00:09] Everybody. Dave Dubeau here with another exciting episode of the Property Profits Real Estate Podcast today, zooming in from Florida, the Jackie Jackson, who is a real estate entrepreneur. She is an expert when it comes to tax liens, tax deeds and overages. And that’s what we’re going to be talking about here today are overages, because this is kind of a little known aspect of tax liens and tax deeds that I just see huge potential for. And I’m so thrilled to have Jackie here on the call with us. Jackie, welcome.

Jackie Jackson [00:00:43] Thank you so much, Dave. I’m so excited to be here. And that was a fabulous introduction. You made me sound so smart and I love that.

Dave Dubeau [00:00:51] You are pretty darn smart if I do say so myself. Jackie, I tell you what. So, Jackie, you know, I don’t want to dove too much into backstories and all that kind of stuff because we quite, frankly, don’t have time. And we’ll show people how to how to find out more about you. But why don’t we take a deep dove right now into what are overages?

Jackie Jackson [00:01:12] It’s like the best kept secret. Dave All right, so as a tax lien and tax deed investor, there is overages and surpluses and sometimes they call them excess funds and overbid. They have different names contingent upon the actual state, but they all kind of mean the same thing. So this if you can just wrap your mind around this and as an example, the county, when they are auctioning off properties in the tax deed process, they only want to collect the total amount of taxes and penalties interest that is due from that property owner. So for example, if the total amount that needs to be collected is $4,000 to easy write simple math, but the property is bid it up in a competitive process right by investors. And the property sells for $40,000, which is still a good deal, by the way, depending on the market value of the property, because where can you go to buy a $40,000 house? Right, exactly.

Dave Dubeau [00:02:13] No.

Jackie Jackson [00:02:13] In this market, anyway, the difference now is $36,000. Right. Because they only needed to collect 4000. They sold it for 40,000. $36,000 now is considered excess funds because the county only really wanted to collect the 4000. Now, most people would say, well, why doesn’t the county just keep the difference? Right, is one of those keep the change kind of programs. But the answer is, I know, no, that’s not what they do. You know, they will eventually keep the change if it’s uncollected. But who is actually eligible for that difference in the auction sale is the prior or the previous property owner. And a lot of times the former property owner does not know that they are eligible to submit a claim for those excess funds from their property being auctioned off in voluntarily. Is not. Is that incredible?

Dave Dubeau [00:03:14] Well, so let me see if I’m understanding this. So let’s what would be an example of a state or a county where this could happen in this scenario?

Jackie Jackson [00:03:25] Just. Okay, great, great question. So there are 3141 counties that make up the United States, 3141 counties and county equivalents that make up the entire United States, all 50 states right now, not all states allow overages to actually be collected. But I would probably say 80% of all of the states in the United States allow this to happen. So I reside in the state of Florida, so why not use Florida as an example? So Florida is made up of 67 counties. Can you imagine that? 67 counties? And in all of these counties we have tax deed auctions that are happening every single day within our state. So some states the frequencies are less. But in the state of Florida, they’re happening in every town.

Dave Dubeau [00:04:19] Houses in Florida.

Jackie Jackson [00:04:20] That’s a lot of stuff going on here. So there’s lots and lots of opportunity. So as the demand increases because inventory is low in the regular markets for real estate, you have investors that will competitively participate in these auctions, which is not a bad thing. They’re still able to find opportunities there, but that creates these overages. And there are billions when I say billions of dollars that go uncollected throughout the United States, and you would think that the former property owner would be aware that this opportunity is there for them, because Lord knows that they need the money. You know, if they lost their property in an auction, then more than likely there was some financial distress in the first place. Right. Is this abnormal for your property to be auctioned off and sold for its delinquent taxes? That doesn’t really happen. You know, very often it takes maybe 3 to 4 years sometimes for it to escalate to that point where the county is like, enough is enough, we’re going to auction off your property. So when these overages are collected, the county sends out a notification. However, the former property owner normally doesn’t. They stop answering their mail, they stop responding for whatever reason, you know, they’re embarrassed. They don’t want anybody know that they lost their property in the auction. They move, they don’t have a forwarding address, anything like that. But that does not mean that they are ineligible. They are still eligible to collect and to claim. They just don’t know.

Dave Dubeau [00:05:56] So let me see. Let me see if I understand the scenario. So let’s say I’m Joe Homeowner and I go bankrupt and I fall behind on my bill payments and I got this house I owe my property. Let’s say it’s worth $100,000 just for even numbers. I quit paying my property taxes and after three or four years, my property goes to auction. Let’s say I’m $4,000 behind in property taxes. I don’t know if that’s realistic or not, but let’s use that number. Okay. So then some Sharpe real estate investors who understand tax liens, tax deeds go in. They bid on my property. It goes back and forth. It gets sold at auction for $60,000. Like your example. Right. That that may be kind of realistic. So we got $100,000 property, $4,000 owing in back taxes. The investor pays the county $60,000 for this property. There is a difference of, whatever, $56,000. All right. Okay. $50,000. The county has happily kept that money but me as Joe homeowner. Now I’ve probably moved off I’ve moved on. I’m trying to put all of this crap behind me. I’ve kind of given up on this property and I don’t understand that I’m I’ve actually got $56,000 coming to me because I thought that had just got sold for the back taxes. Is that fairly, fairly accurate? There is that kind of how this scenario goes down?

Jackie Jackson [00:07:37] You are absolutely on target day one.

Dave Dubeau [00:07:41] And so the county probably sends me a couple of notifications to my old address because that’s the only address they got on file for me. I kind of get that because I’ve moved on. They’re not that keen on really hunt me down because if I don’t find out about this money, sooner or later they get to keep it. The county gets to hold on to it. I don’t know how long that takes, but it’s not in their best interest to hunt you down. So that’s basically we’ve got $56,000 owing to the original homeowner. How do you and I, as real estate entrepreneurs, make a buck connecting these things? That’s a fascinating idea. Hold that thought for a second. Hi there. This is Dave Dubeau. And real estate investors hire me to raise capital the right way. Why? Because most of them are stuck with too small of a portfolio and they don’t know how to attract investors and raise money for their deals. So I help them to connect, capture and close their ideal money partners. Bottom line, when you’ve got a deal, you’re going to have the capital to do it. So go ahead and book a no cost capital clarity session with me at Book A chat with Dave dot COM. Again, that’s book a chat with Dave dot COM.

Jackie Jackson [00:08:55] Now that’s the best part. Now the best part about this entire scenario is that you nor I, we don’t have to be licensed any real estate license. We don’t have to be an attorney, we don’t have to be any of those things, right? So we’re not providing any legal services or anything like that. All we are providing is assistance in recovery of these assets that are sitting in escrow, if you will, with the county. Okay. So our objective is to contact that former property owner and inform them that there possibly may be funds available for them and provide them with and service. All right. So we become surplus recovery agents and agent for the former property owner and represent that agent with the county and help them to collect. So our objective is to find that former property owner, help them to collect the funds that is owed to them from the county. Okay. So of course, there’s going to be some documents, some papers that got to be signed, some agreements, you know, that, hey, I agree to help you. You agree to allow me to help you write two really simple documents. There is not really rocket science or anything like that. And we put a package together utilizing the county’s documents because they always have their own, you know, paperwork that they want you to fill out in addition to the representation documents that you need with the former property owner. But once you have all of those documents together, then you put them in a beautiful packet and you send it off to the county. And guess what? You do get it. You do they the county reviews it and they’ll say, okay.

Dave Dubeau [00:10:39] That’s it. What else are they going to? They’re going to go, Oh, darn, I got on here. But they have to legally say, okay, if you if you’ve done everything properly, they have to they have to pay out. How long does I usually take in your experience, Jackie?

Jackie Jackson [00:10:52] You know what? I have seen it where it has been as little as 2 to 3 weeks and in other times it has been somewhere between 6 to 8 weeks. So it’s not a very long process because at the end of the day, even if you waited eight weeks, you know, two months for a lump sum, compensation for something that you didn’t have to fill it, there wasn’t any toilets involved. There wasn’t any tenants involved, there wasn’t any taxes. And, you know, you had to pay or anything like that. As far as property taxes, that’s a great payday. And you can have as many of those opportunities lined up in your pipeline so that when your checks come in, it almost seems like they’re coming in back to back to back. So you got to do a lot of the work upfront. And of course, there’s no guarantee because if you don’t get in contact with the former property owner, then you’re still at stage one at step one. It starts there. Right.

Dave Dubeau [00:11:47] So about expertize and time and putting in there. Yeah. So let me ask you this question. So in our fictitious example where there’s 50, $56,000 going back to the homeowner, what kind of a fee would this surplus recovery agent typically charge?

Jackie Jackson [00:12:04] Absolutely. So it ranges. So what I normally share in my consulting and when I’m, you know, helping people understand this process is that, hey, you’re going to have to use your own judgment and define what that means to you. Like, what does what is your time worth to you? But typically, they have to structure so you can have a flat fee structure or you can have a percentage structure. And a percentages is normally what people lean to because it’s a percentage of the total amount that is collected. So it can vary depending on how much you help that former property owner collect from the county. So it could be anywhere from 20% to 30%. The majority of the funds collected is definitely turned over to the former property owner because it is their money. So your compensation is just based off of your effort to help them. So when the funds is collected, you take your fee and then the difference is provide it over to the former property owner and they are ecstatic and happy. You are ecstatic and happy and everybody’s ecstatic and happy.

Dave Dubeau [00:13:08] I quite frankly, I can’t see why anybody would have a problem with that. I mean, look at lawyers. They charge a third on funds collected when they’re going to bat for a client suing somebody or what have you. So if you’re helping somebody collect found money that they weren’t even aware of, 25%, 30% would be perfectly fair in my estimation, that’s for sure.

Jackie Jackson [00:13:32] Absolutely. And that is typical in the normal scheme of things as far as the industry is concerned. But I just wanted to just kind of separate the two options, right. So you have a flat fee option as well as a percentage option. So people just kind of understand like, okay, I could charge $5,000 every single time, you know, or I can charge $10,000 every single time, right? But if you’re collecting $100,000, you know, surplus and overage, then if you do $10,000, then technically that’s only 10%, right? So if you have a 20% to 30% percentage structure for you’re up.

Dave Dubeau [00:14:08] For the minimum fee, right?

Jackie Jackson [00:14:10] Yeah, exactly. Exactly. But it’s very, very lucrative. My favorite part is when the people that I work with, when they send me copies of their checks, you know, that’s my favorite part. It just makes me feel like really, really excited because I know that they help someone in need because in order for them to receive their check and compensation, they had to go above and beyond and help someone else. And that is the objective here. And that’s the purpose is that we are helping people collect funds that belongs to them that they did not know was available to them. And you have no idea how incredibly impactful it is when they receive those funds. They say, oh, my gosh, I needed this money. You know, I needed it to move on or to start over or whatever it is that their circumstances are at that particular point in their life. But they’re normally very, very grateful and very thankful.

Dave Dubeau [00:15:04] Oh, I can imagine. Yeah, for sure. Well, Jacqui, this is fascinating stuff. I’m sure by now people have realized that you are a very sharp cookie. So if they want to find out more about you and what you’re up to and that sort of thing, what’s the best place for them to go?

Jackie Jackson [00:15:18] Absolutely. Anyone can look me up on the Jackie Jackson dot com. That’s t h e jackie Jackie Jackson J k. So and that cap perfect.

Dave Dubeau [00:15:30] And we’ll have all your links in the show notes. Jackie, thank you so much. And I think there might be some interest in this whole overages thing. We might have to do a little bit more of an in-depth training about this sometime in the future. What do you say to that?

Jackie Jackson [00:15:42] Oh, man, that will be so exciting. It’s my favorite topic to discuss and I would love to share.

Dave Dubeau [00:15:48] Awesome. All right, everybody, thank you so much for joining in. We’ll see you on the next episode. Well, hey there. Thanks for tuning in to the Property Profits podcast. If you like this episode, that’s great. Please go ahead and subscribe on iTunes. Give us a good review. That’d be awesome. I appreciate that. And if you’re looking to attract investors and raise capital for your deals, that may invite you to get a complimentary copy of my newest book right back there. There it is the money partner formula. You get a PDF version and investor attraction book dot com again investor attraction book. Dot com. Take care.

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