PODCAST

Tax Lien Investing

Mitch Stephen|By November 16, 2016

Episode 23:

Joanne Musa is a tax lien investing trainer and consultant who works with investors who are ready to build their own profitable portfolio of tax lien certificates or tax deeds. Her very informative and straightforward articles about tax lien investing appear all over the internet.

Joanne has been featured on internet radio and a national financial online magazine. She is also featured in real estate investing web sites such as, www.REIWired.com, www.Foreclosure.com, and www.REIBlueprints.com, and in the book “The Venus Approach to Real Estate Investing, and the Amazon best seller, Trust Your Heart: Transform Your Ideas Into Income.”

She was mentioned in the January 2013 issue of Forbes, and is the author of the Amazon best-selling book, “Tax Lien Investing Secrets: How You Can Get Double-Digit Returns On Your Money Without The Risk Of The Stock Market.”

As CEO of Tax Lien Consulting LLC and founder of TaxLienLady.com, she has helped thousands of people from all over the world to invest in tax lien certificates and tax deeds. She interviews experts from around the country on all aspects of tax lien and tax deed investing and is a sought-after speaker for real estate and tax lien investing groups. Known online as the TaxLienLady, her brutally honest, no-nonsense style sets her apart and has earned her the title of the most trusted tax lien investing authority in America.

What you’ll learn about in this episode:

What tax liens are and what makes them so valuable
How tax liens are different from tax deeds
What kinds of retirement accounts can be used with tax liens
The best states to invest
How long it takes to start turning a profit
Why you should look at the properties first
How Joanne got started in tax lien investing
What success has brought her
Why you need a mentor
Books that Joanne recommends
Why Joanne is looking at getting into tax deeds in addition to tax liens
Joanne’s plan for doing more live investments
Joanne’s worst loss ever
Why Joanne wouldn’t have waited so long to publish her book

Resources:

Transcript:

Mitch: This is Mitch and welcome to another episode of the real estate investor summit podcast. Am here with a very special guest, because, today we’ll get you some Joanne Musa, and today’s subject will be tax lien investing secret, and it’s all about investing in tax lien certificates for high returns without the typical risk of real estate investing. She’s a brilliant mind, and I wanna tell you about her. She’s been an investing expert and consultant who has helped thousands of investors, entrepreneurs and business owners around the world. Profit from high yielding real estate secured tax lien certificates, and she’s known online as the tax lien lady, and actually that’s your link for today, you wanna know more about her, get some of her free stuff that she’s offering or order one of her books, you can go to the link in the show notes.

I think today’s show is unique, because it can show you how to take some small amount of money in IRAs and invest directly in investment vehicles like 4o1k and whatever, and you can tax lien the money and can really grow it. And without further ado, here is Joanne Musa and Joanne, tell us exactly, what a tax lien is or tax lien certificate.

Joanne: Well, Mitch. First of all counties and towns, county living in county they need their tax lien to pay fireman, policeman, school teachers, and build roads and all that kind of stuff, and when people don’t pay their property taxes, they needed a way to get that money. Now, in some states what they do, they will just sell your property right out from under you. And we, call those tax lien states and in other states, what they’ll do is actually sell the taxes on your property to an investor. “Cause, you know, because if you don’t pay your taxes, you’ll gonna be charged interest or penalties through the nose, you know it can tend to be higher in some states, like 36% a year. It can go anywhere from 8% to 36% a year. Now, what the states do that–is sell your taxes, they will sell them to investor, they will actually have an auction and something [INAUDIBLE] that they will down the rate of interest that the investor will get or they will bid up the price of the lien that they are selling to the investor. And then, they will collect the taxes on their property. Now, as the investor, when you purchase these taxes, you put a tax lien on the property, which by the way comes before a mortgage, or anything else, you get paid before anybody else does and that really gives leverage for the owner of the property to pay off their taxes because, you might think, “Well, they didn’t pay their taxes to the county or to the township why should they pay the investor? Well, if they don’t, they only have a certain amount of time which varies from state to state that they have to pay those taxes or the investor can foreclose on the property. So, that’s what a tax lien is. The investor would go this tax lien option or tax payout, pay the taxes on the property put a lien on the property and then get that 8%-36% on their money depending on their state at their end and being in the first position to get paid. So, that’s how it works.

Mitch: And the first position is called, I think I heard–referred to as a super lien. Is that correct?

Joanne: Yeah. That’s correct.

Mitch: So, before everything. Do you believe in wipe out your bank mortgage, and so, well the bank has a choice to come and take care of it. Some of them are gonna take care of it. I do wanna point out, that in Texas, if the tax deed state, we don’t have tax lien certificates and you actually get the deed to the property. It’s 25% on the first year and 50% on the second year if I recalled perfectly. Do you know about Texas specifically? ‘Cause, I’ve got a lot of–

Joanne: Yeah. Texas is unique. Texas is unique, and that’s a redeemable deed state, it’s kind of in between a tax lien and a tax deed state, most check these dates, and just selling your property. And you don’t have any recourse, once the property is sold at a tax sale. But, with Texas, it is a redeemable deed state, which means, the investor can get that penalty which is 25% in 6 months, if it’s a non-homestead property. If the owner redeems it, and if the previous owner doesn’t redeem it, they get the property. And they don’t have to foreclose on it. They already purchase the property at the tax sale, as long as it doesn’t get redeemed within the specified amount of time. They get the property, now the unique thing about Texas is that other redeemable deed state, like Georgia, and there are a few others, it’s only a handful of redeemable deed state in the U.S.

Unlike the other states, in Texas, you are considered the owner of the property when you purchased that deed at the sale and recorded it. In other states, you are not considered as the owner, until the end of the redemption period, but in Texas, you are. So, when you buy that redeemable deed in Texas, you can rent out the property, you can evict who’s ever there if there is somebody living there, and moving. But, of course, the previous owner has the right to redeem, and if they redeem, they have to pay 25% penalty. So–

Mitch: In the first year, if they redeemed in the second year, if it is a non-homestead, I think they have 18 months or 2 years, and am sorry, if it’s a homestead they have much longer time. If it’s a non-homestead, it’s like 6 months. But–

Joanne: Yeah. But, if they don’t pay off, in the first 6 months, and they pay off after that, then you can get 50% on your money.

Mitch: So, which is tremendous, well-throwing vehicle, just have to become just like everything else. You have to become an expert on it. So, can I use my retirement account to invest in tax liens or tax lien certificates or tax deeds?

Joanne: Well, it depends on what type of retirement you’re talking about. If you are talking about a 4o1K from a company that you worked with, probably not. But, if it’s a truly self-record IRA or solo 4o1K, then yes, you can use that too in investing in tax liens.

Mitch: Yeah. Yeah. I think it’s a great thing to do with your self-directed retirement funds. I haven’t had a solo 4o1K with checkbook controlled.

Joanne: Oh, that’s wonderful.

Mitch: I do have a 401K that’s my own, I didn’t derive it from some company that I used to work for. I just created it myself. And I have checkbook control, which means, I can write a check at will for things that fall within the parameters that are acceptable to invest.

Joanne: Yeah. That’s actually the best way to do it. Because, the thing is, with an IRA account, with the solo 4o1K, you have advantages that you don’t have with self-directed IRA.

Mitch: But, some certain IRA you have to go the trustee, and a trustee has to make a move for you. You direct them, but they are in between you and me, and the actual investment. So-

Joanne: That’s one of the best, but another one is, you can borrow money from your 4o1K up to $50,000 or half the amount that’s in the account. You cannot do that with a self-directed IRA.

Mitch: Now, there’s a lot of advantages of the solo 4o1K, especially with checkbook control, over the traditional IRAs and the regular Raw IRAs. I interview a guy named Dave Cole about that. And if you are interested, just go back to the podcast series with Dave Cole, and he can hook you up on that.

Joanne: Okay.

Mitch: I wanna stay focused on like, once you have those things, are you gonna use your own money, or are you gonna use your retirement money, either one. What’s the typical amount of money I need to get started? I mean do I need a lot of money, little money, no money, barely any money?

Joanne: Well, here’s the great thing about tax liens, is that– you know, when you invest in property, some people know how to do it with other people’s money, buy properties from other people’s money, and that’s great, but. If you are using your own money, and you are going out there buying properties, you probably need a few thousand, maybe tens of thousands to start buying properties. But, with tax lien investing, you can do it with less. And a lot of people think, oh, only a couple hundred of dollars well, I guess you need more than that, about a couple of thousands of dollars to get started. And that because, when you buy the tax lien, you might not only need $500 or even less than that. But, you gonna wanna pay the subsequent taxes in most states, because remember, these things has a redemption period. And in some states, the redemption period, in Texas we just talked about, it was only 6 months for non-homestead property and for homestead properties, it will be longer than that. But, in many states, it can be more than a year. And in a lot of states, it can be 2 or 3 years. Some states have some; some has 6 months or 1 year redemption period. But, it can be anywhere between 6 month or 3 years depending on the state.

And during that time, in most states, you paid those subsequent taxes because when you to a tax sale, you are not buying this year’s taxes. Most of the time, it’s last year’s taxes, or it can even tax from 2 years ago. So, there’s gonna be current taxes that can be paid now, once you are a lien holder and then subsequent taxes that come up, maybe in the next couple of years depending on what the redemption period is, and you wanna pay those. Now, when you pay those subsequent taxes, you also get interested on those subsequent taxes, and you also get to control that lien the property so that nobody else can buy a lien on that property. And you have the right to foreclose when the redemption period is over. And you don’t have to worry about that redeeming everybody else.

Mitch: Okay, so and I understand that we are talking about a lot of states here. What are some of the best states that you think to invested are? There’s got to be a list; there’s got to be top and bottom of that list.

Joanne: You know, everybody ask me– they wanna know which state has the highest interest rate. But, that’s not only the best state to invest. For example, if in Texas, it is a great state to invest in. But, if you live in a different part of the country and you wanna invest in Texas. Well, guess what, you have to fly there. Because they only have live tax sale. And of course, the places with the highest interest rates also have the most competition. So, here’s what I suggest the best place to invest is where you know the property value, either where you live, in your backyard or if you don’t live on a lien state, then maybe somewhere you go on vacation or where you have family that lives there.

Mitch: What a wonderful answer. What a great answer. Because, when you start dealing in other parts of the country that you are not familiar with, just stuff happens. You don’t see it coming. You don’t even the question to ask.

Joanne: [LAUGHTER]

Mitch: You know, and the thing, I want this thing, and someone tells you something that you don’t know about. I think that’s the best answer I’ve ever head, you know. Invest where you know what you are doing. Where you know the layout of the land, where you know the values, and then I also like the phase 2 of your answer, where– if we stick to some place where you wanna go, or where you are gonna go, ’cause you might have to go there sometimes. And that–

Joanne: Right.

Mitch: That’s a beautiful answer. I know Texas, as you said, some of the highest returns but, yeah they have a lot of competition out there. Let’s talk about that, I heard it’s competitive, and you know, it’s hard work to get these liens. And I want to preface that, because there’s no easy money out there, is there?

Joanne: No, there isn’t. I mean, if it were that easy, everybody would already know about it. They’d already be doing it. There is competition out there because, what happens in the last few years, is that you know the said rate, the rate that they have to pay for money has been really well. There’s not a lot of safe investment out there that pay. And the stock market has really really been volatile. So, some hedge fund has come out of investing in the stock market and has come into tax lien investing. So, especially the state that does have the interest rate, there are hedge fund companies in there now, you know making it very competitive. Can you still get deals? Yes, you can. But, you have to go to a lot of tax sale to get them. I mean, you have to know what you are doing. You can’t just compete with these guys, because quite frankly, they either pay too much to get up the price too high or they did the interest down too low to make it really worth it. Now, the business is gonna change and get a little competitive once those rates go up again. So, that will make the tax lien across the country a little better for the individual investor.

Mitch: Which is the same thing with buying houses. I mean the real estate market is really hard right now. So, it is harder than ever been to find tremendous deals. Now, that being said, you know, we find our first deals every year somewhere between 70 or a 100 every year. So, it is more than enough to make a great living but, you have to separate yourself from the lazy people. You are out there–

Joanne: [LAUGHTER]

Mitch: You are out there, become an expert in your field and put a little extra spice in your coffee or something and get going and get ahead of these people and go get yourself. [LAUGHTER]

Joanne: Yes. Exactly. I mean, I have to go to a few tax sales and pick up a few liens but, that’s what you have to do.

Mitch: When you pick up one, how long does it typically take before your money– or making profits or realized your goal?

Joanne: And remember, this isn’t like flipping property, is it. So, it doesn’t happen right away. Recently, I just started buying and selling Hood properties too, and I mean that’s wonderful, it’s great, because you can make a lot of money at once, and if you do it in a few months, this takes longer, but, it is a way to put a little bit of money a way out of time, because, remember, I told you, you can start like with $500 and pay the subsequent taxes and pay $500-$1,000 each year until [INAUDIBLE] and then, after it could be a year too, depending on what state you are investing. Now, if you want shorter period, there’s some state that has 6 months redemption period. And that happens quicker. But, I will tell you that some of those states require the lien holder to do a lot of work. I like the states that have a longer redemption period, where the tax collector does all the work, and it’s true, we have tax investor, and I don’t have to do anything. And I don’t mind waiting any longer, you know, especially if I am investing money that is in my self-directed IRA. I don’t really care how long it takes for that to come into fruition, because the money’s gonna go right back into my self-directed IRA.

So, to answer your question, Mitch. Anywhere between 6 months and 3 years, depending on which state you are investing in. But, you know, I kinda like it that way. Because, when I first got into this business in 2002, things were redeeming right away. And a good economy that what happens, people will pay you off right away, and it could be 2 months or 3 months but these interest rates that you are getting in many states are not in Texas, because that’s a redeemable state, they have a penalty. But, in that lien state, if it is an analyzed interest rate that you get, so, if your lien redeems quickly in 2 or 3 months, you’re not getting the full rate that you bid, because of they [INAUDIBLE]

Mitch: I understand. And the good thing about IRAs is, most of the people a lot of times, you have a long time before your retirement fund matures, so the fact that these things hold long and build up slowly, is no problem because there’s a lot of retirement accounts have time on their side, you know. You can’t really cash out these things before you are 59 1/2. And so, a lot of people have 10-15 or 20 years before that happens. So, do you ever buy these tax liens without looking at the property or do you always look at the property when you buy your tax lien? Or how does that work?

Joanne: You know, it is always good to look at the property. Now, there are times when I invested in another state where I couldn’t go and look at the property, but I am still looking at the map, looking at Google Earth, or something. Looking at the property, but I tell you what. If you have somebody that can look at it for you, because let’s say, you are investing in another state and I have done this, I live in Transylvania, and I have invested in Arizona, and you could look at Google Earth or Google Maps, now if you are actually investing in a house, and even if you are investing in a house, you can put the address of the house and [INAUDIBLE] you can even get pictures of it but you don’t know how old those pictures are. And you don’t know if the house is burnt down. And if you are investing in land, let’s say you are investing on a lot, and the house is a mobile home on it. You don’t know if that mobile home is still there. So, there’s a lot that you don’t know even if you are looking at pictures. So, if you have somebody that can go and look at it for you. Now, when I say, go look at it, I don’t mean you can go inside the property, because, remember when you are buying a tax lien, somebody else owns the property. You don’t own it. And going on that property is trespassing. So, you cannot do that. What you can do is drive by the property and make sure it is still there. [LAUGHTER] And you know–

Mitch: You laugh. You laugh with. You know, you only have to buy a place I don’t see one time, and go there, and there’s no house there. You won’t do it again.

Joanne: [LAUGHTER]

Mitch: Someone’s gonna go, buy and see. Just like– as a matter of fact yesterday, I sent one of my guys over– look, I just made a deal with the defaulted note with a lien holder, and I am gonna cash him out. And we’ll gonna foreclose ourselves next month, and says “I’ve never seen that house. I know the neighborhood, but I’ve never seen the house. I know the neighborhood, but I need you to drive by and tell me what it looks like”. But, when he got there, he said, “You know, man this house is smoking.” And everyone else thought you know, maybe it was smoking hot–good looking nice, great place.

Joanne: [LAUGHTER]

Mitch: But, because the life I’ve lived for the last 20 years, when he said, it is smoking, I said to myself, “Tell me it is not burnt down, are you talking about it is really smoking or what you are saying. Don’t leave me like this”. [LAUGHTER] And I– and he said, “No. No. It is smoking hot good. It is really great”.

Joanne: [LAUGHTER]

Mitch: I thought you said, it is smoking like it’s still like it burned down last night.

Joanne: I would just like to qualify that, too. Like, if you are buying a property in Texas, you are actually buying the property, you absolutely have to look at it first. If you are buying a lien on a property, you are not buying the property, and the amount that you are paying is a lot less than the property is worth. And as long as at least the land is a lot more valuable than the taxes you are paying, it is not as critical, so.

I tell you it happened to me. I bought a lien and a property in Arizona that I looked on the map and it showed that there was a trailer there. Well, the trailer has to move. It wasn’t there anymore. But, the lot was worth than the taxes on it, and it was worth more than the taxes that I paid them anyway. So, that didn’t matter. However, you have to evaluate the assessed value property of the land, just land in case, if you are doing this from a distance and you can’t specifically go and look at the property, then you have to evaluate the money like you are paying the money that you are gonna pay. Because, in Arizona, it’s a 3 year redemption period. The money that you’ll gonna pay over the next 3 years, is at 25% or less of just what a land is worth, and then you don’t have to worry about that, in the case of tax being–actually buying the deed or redeemable deed like in Texas, you better look at the property first. You better too. You deal with them like you would have if you were buying a house.

Mitch: I was dealing with a student that intend to buy a house but could not see the inside of. The good news was that somebody was living in there, it was a family living there. Which was good news and bad news? The fact that they were living there meant that there’s still running water, there was still electricity, that the house was functional. So, that was the good part of them living there. The bad part of them living there is, you know, we would eventually have to get them out of the house. There’s kind of frozen constitute being occupied or not being occupied. At least if it’s occupied you know the house is somewhat functional, then you have this other hospice, if you’ll gonna remove the people. How much they’ll gonna take with them when they live. [LAUGHTER]

Joanne: Or what they’ll gonna do. [LAUGHTER]

Mitch: So, that’s when the cash release concept, might come in really handy. Where you tried to offer them some money to leave so that– they’ll leave the place and tuck for it a small reasonable fee, which goes against every emotion in your body, but, financially it is a great decision.

Joanne: Yeah, Mitch. As a matter of fact, if you buy a tax deed property, you can’t go into the house and look at it. Because the owner still owns the property. And you are trespassing if you do that. Now, if it’s vacant. You might be able to go in it, but if it’s occupied, you definitely cannot. So, that’s one of the drawbacks of investing in tax deed, is that you cannot see the inside of the property, you have no idea how distressed it is inside before you purchase it out of tax sale.

Mitch: And that’s why it is important to know what the land is worth. Because, let’s just say that the house is a straight of your hedges, is to understand that at least you’ll gonna be left with a land and subject, and the utility hookups what’s that worth and if the answer is good on that, then you proceed with– am I on the right ball park there?

Joanne. Yeah. You are. The thing is right now, when you go to these deed sales, they are actually bidding up the price of the property. So, you have to be careful with that. Because, you have to assume that you have to fix up the inside of the property. So, you kind of going at it whine, [LAUGHTER]

Mitch: Well, I heard. I mean, it seems I heard people saying that they bought a tax lien or a tax lien certificate or tax deed for a couple of hundred bucks and they ended up with a house, is that the goal, does that happen or?

Joanne: No. That does not happen with tax lien investing. I mean, every once in awhile, you’ll be able to foreclose on a tax lien and these companies that buy thousands of liens, they’ll be able to foreclose on liens. But, most investors do not get the opportunity to foreclose on a tax lien, unless they’re purchasing liens on the inner city, in areas you know in poverty-stricken areas, and if they don’t do their due diligence, they can’t [INAUDIBLE] worth with property. Then, they’ll be able to foreclose. And sometimes, on vacant land, you know, people are more willing to let vacant lands go for taxes than they are to let house go for back taxes that normally doesn’t happen. But, even when it does. Keep in mind that you have to continue to pay the taxes on that property, throughout the redemption period.

So, even if you start with maybe a lien, a thousand dollar lien, you gonna have to pay the next 2 or 3 years of taxes. And even if the taxes are only a $1,000 a year, which is you know, Mitch is not typical for a nice house. In most states, you’ll gonna have you know, at least $3,000 dollars a year. Where in New Jersey, I invest, it is not a typical to have like $8,000-$10,000 dollars taxes a year. And so, you have to pay quite a bit of taxes before you actually get to foreclose on a property. It really–if it’s a property that you want, then the state that you should be looking at or the deed state, like the state that I live in, Transylvania, they actually sell your house at the tax sale or like in Texas at a redeemable deed state, ’cause in those states it is harder for the owner of the property to redeem the property, so, there is a better chance that you will end up with the property. But, you also have to pay a lot more. Remember, in these states, they start bidding at the bidding at that taxes, but it gets bid up, and it gets bid up pretty close to market value of the property. So, you really have to know your values, here. You have to know your after repair value of the property and the unknown here, as we were just talking about here before, what is the repairs of the property, if you don’t know that. So, you kind of have to be careful; you have to know your areas, know what things cost in the area that you are bidding before you actually bid, when you are bidding on deeds or redeemable deeds.

Mitch: Yeah. It always the same thing. If you get into a great tax lien certificate or a great tax lien or a tax deed deal, and you start to run short on money, or you are getting stressed financially, just go pick up a partner and make half of something, instead of a 100 % or 0. It is always amazing how–

Joanne: Yeah.

Mitch: It’s always amazing how the people that are resourceful don’t lose deals, and the people that wanna keep a 100% for themselves and don’t think outside of the box, when a deal gets tough, and they are struggling to make it, they won’t go out and find private people to help them, you know. Who knows? And in the tax lien certificate or tax deed deal, you probably find people outside your community who are doing this, or find the people that are buying tax liens, they are in the area or that community or from that courthouse and friend those guys, because they the ones that will come in and help you and who knows you might find a great mentor stand beside while you are actually solving a financial problem. Do you use private money when you do this, or you use your own money or a combination?

Joanne: Well, you know. I do both. I used my own money and when I get into a situation, like what happened a couple of years ago. I bought up a lien and it was really a small lien because it was, now in some state like in New Jersey, they will sell you two of the lien, along with the tax lien and it is the same as the tax lien, what happened is, the municipality in New England and New Jersey, they don’t have big county government. So, the tax sales are done by the town and what happens is, if you pay something to the township, like the municipality utility authority, if you pay taxes or sewer or even your garbage removal, and you don’t pay it, well, that kind of wind up in the tax sale. So, this was for water and sewer payments, and I think it was a small amount, you know, a couple of hundred dollars and then it turned out that the taxes weren’t paid on this property. And they were $3,000 taxes a year. It was very small property. It was 2-1 bedroom apartment side by side. And so, I needed to get another investor, involved to pay those taxes. And that’s what I did, I found another investor, who wanted to get the 18% that I had this on this on their money or if it doesn’t redeemed get the property which as you know it doesn’t happen too often. But– I got some private money and on that deal.

Mitch: Yeah. Good for you. I mean, you got it sometimes go outside or go outside the box, or go outside what you can do yourself. So, let me ask you another question. You are obviously successful is– when you start becoming successful as well. How long ago?

Joanne: Oh, gee. I started investing in 2002, what I actually did was, I had met somebody else who was a millionaire in New Jersey, and he was looking for somebody to help him. So, I started working for him, and I hired a few people to help me because, as I told you, in New Jersey, this is done by the township and there are 550 units of counties in New Jersey and they all their tax sales once a year, but are spread out all throughout the year on a given day, you can have tax sale all on the same day on the same time in different areas of the state. So, I have to hire 5 people keep them in business and we only went to 5 counties because, I didn’t cover the whole state, the hedge fund they have now cover the whole state but, we didn’t do that, we were contained into 5 counties. In about, a couple of years, we got a lot of money invested so, I think it took me a couple of years to become an expert by not only doing that, I realized that people around the country wanted this information, not just for New Jersey but for the states all over the country. So, at the time that I got involved there were not a lot of books on taxing and investing, there was 1, and it was already 15 years old, and it didn’t have any specific information or the state that I invested in. So, I started interviewing experts from around the country, and I did these free tele seminars, interviewing different experts from different areas of the country and that’s how I greened my information, I actually started writing my first e-book, I guess I knew I was successful when I pre-sold my first e-book, one chapter at a time, as I wrote it. [LAUGHTER]

Mitch: Oh, that’s an idea, huh?

Joanne: Yeah.

Mitch: So, what is the most liberating aspect of being successful?

Joanne: Well, the most liberating aspect I think is that, many people around the world look at me as an expert of my field. And I am able to help some of them profit from tax lien investing and taking control of their retirement, particularly the people in The U.S, being able to take control of their retirement accounts, to being able to help people do that, and to know people and now have– really across the country and to be able to know that, almost any state that I go to I know somebody there. And I actually help somebody there. So, that’s pretty liberating.

Mitch: That’s a great accomplishment. Do you have a mentor yourself?

Joanne: I have a mentor’s, not for taxing and investing right now. But, now am actually getting into Hood and REO investing and I have a mentor for that. And I also have a mentor for other aspects of my business.

Mitch: Because we know that successful investors never stopped, or any successful people for that matters, they don’t stop learning. They always continue with learning. So, you just started in this Hood and REO investing, which is the great time to grab a mentor, so, when you are starting. You don’t need them as much as long as you know what you are doing. But, you should—

Joanne: Yeah. I wouldn’t have started without a mentor, because I know the thing that I am doing, tax lien investing is kind of hard when you are already focused on one thing to be able to do something else, and I wouldn’t have done it without a mentor helping me, holding my hand and helping me step by step along the way.

Mitch: Well, I would also like to point out, you are already an expert hands down before you move on taking another subject or second endeavor. So, a lot of people don’t get confused. This is not shiny-object -syndrome. This is– I’ve done this so much, and I know it so well, that I am an expert on this and am ready to grow into something else.

Joanne: Exactly.

Mitch: I like the course, and I would this other course looks like too. So, don’t get confused.

Joanne: [LAUGHTER]

Mitch: Am becoming an expert in one before you move into another. Or are you reading a particular book right now?

Joanne: I am. I am reading Traction by Gino Wickman, which is, you know, for my business, that is a business book that I’m reading. I’ve also just finished your book, My life & 1000 houses: Failing Forward to Financial Freedom, which I love. And am currently reading your second book, 200 Plus Ways to Find Bargain Properties, and I am actually listening to that one on audible but, now I’ve got your [INAUDIBLE] which I am so happy about, because there are some thing in there that I wanna come back to and highlight things I wanna try. What I love about that book is it is not just ways to find bargain properties, but it ways to set your business up for success from the beginning, which is not am investing in hood properties, but definitely, I wanna use a lot of things that have in that book. Am excited– am planning to read your third book when am done with that one.

Mitch: Wow. I didn’t even paid you for that.

Joanne and Mitch: [LAUGHTER]

Mitch: That’s pretty flattering, I can actually tell by the way that you said it you’re serious. So, I appreciated it. I know, the first book, failing forward is really a kind of autobiographical account of how I’ve done it, I figured out how to find this bout with both hands, and then rents and repeat but you know, the second book yours a little bit drier but they have a lot of information in them. My third book, I don’t’ know if you know this one, it is like 50 bucks. And I have some people call me and say, you know it’s called “My life & 1000 houses: The Art of Owner Financing, which could be useful for you, Joanne. Because part of the way that you can sell these properties is just to collect payments on the ones that you get back or the ones that you get bumped into that makes sense. And it is really a great cash flow. You can get paid up front and get cash flow at the back end for years and years and years, and I have to be a landlord, which is the greatest thing in the world, being not a landlord.

Joanne: Yeah. Am tired of being a landlord. [LAUGHTER]

Mitch: I have people tell me, “Man, why that book is so much”? And I tell them, “You are not ready, don’t buy it. You are not just ready. Don’t”. If you don’t understand why the book is 50 bucks, just wait a little while, you are not there yet. So– [LAUGHTER]

Joanne: [LAUGHTER]

Mitch: So, when you think about the proverbial next level, you know. Where is Joanne Musa, going? What is your next? I am gonna guess; it has to do something with REO and Hood?

Joanne: Oh yeah. But, as far as investing property is– here’s the reason for that is. The tax deed, I’ve kind of not doing too much tax deeds. I’ve done mostly tax liens. So, I’ve always wanted to be, you know like a real estate investor- buy and sell properties. But, with tax deeds, we mentioned before you know, we can’t look at the properties first, at the inside of the property, we only get to look at the outside. The other thing with buying out of tax deed sale is you don’t get time to get your money. You go to the sale and here in Transylvania where I live, once you buy a property, you spend an hour to get your money from the bank. It is not like you get to get financing. You don’t even get to look at the inside the house, you know, to find partner to give you money for this house. Like, you can’t even get them pictures of the insides of, and you don’t even know what it needs, and you have to get your money an hour after you buy it. So, I hence start investing in Hood properties, what I like Hood properties is that, I get to look at the properties first. I could get a disclosure of what’s wrong with the property, and I get about 3 days to come up with the money and get an investor involved. So, yeah, that is my next level of– as far that is concerned. But, with my business, I have always shy away from doing too many speaking engagements and live of them. I’ve done some, but I kind of shy away from that, and particularly, I’ve never done a 2-day seminar or boot camp by myself. I’ve done it once with a partner, but I haven’t really done one by myself. So, I am kind of looking forward to doing more speaking engagements and live of them. So, that’s my next step, as far as the business goes.

Mitch: Wow. Pretty ambitious. And it’s gonna be pretty exciting for you. Let me ask you this and then we’ll wrap u. I’ve got 2 more questions left, and there are always 2 of my favorite questions, because people always think that is– we’ll always have it easy so, I’d like to us, what’s the worst thing investment that you made? What was the biggest mistake that you ever made? Tell us about the ugly side. What was the worst thing that ever happened?

Joanne: Well, you remember when we were talking about, buying something and not looking at it first?

Mitch: Yes.

Joanne: I’ve got a couple of those, where I couldn’t– there was one where I am not sure, there was this stream and then there was next to it, there was a house but, that wasn’t the house where the property was. The property that I didn’t see at that time was this little shack falling down, literally falling down into the stream. It was right on stream, and I didn’t– fortunately, it was just a tax lien that I bought. So, I never– I just never recorded the lien, and I never did paid any subsequent taxes. So, it was just a little money that was, just chalked it up to experience, that was the lost.

Mitch: So, how much was that. How much did you lose on that deal?

Joanne: Oh, I don’t even remember how much. And–

Mitch: You just bought–

Joanne: I just started with under a $1,000, you know. —

Mitch: [INAUDIBLE]

Joanne: Oh, no. That was another one. A similar circumstance where, I actually looked at the property, but there was no underground. And it was a lot in between 2 houses, right? Not so bad. But, then when I came back and looked at it, where there wasn’t snow on the ground. It was really a ditch in between 2 properties, that you know, probably could have deals on. [LAUGHTER]. If you wanna look at stuff, when there’s no snow covering at all. [LAUGHTER]

Mitch: Okay. And then, what’s the best thing that ever happened to you in your investing career. What’s the best deal that you’ve ever made?

Joanne: Oh, wow. There are really a couple of good ones. Mine was just a little bit of money that I bought. I was only to pay the utility, it was either the sewer or water on this property. And I actually got to pay it over a few years. And when that thing finally redeemed, and they– quite a bit of money, I don’t remember the exact, the actual numbers in my head, but I’d let it go for a while, I kept paying the subsequent taxes maybe 7 years on this property. Now, in every state, by the way, has an expiration period. You can’t do this in all state it just happens that in New Jersey the expiration period is 20 years. So, you could let this thing go, even though the redemption period is 2 years. I could just keep on paying the taxes and let it go for 20 years. Well, you don’t want to let it go that long, but, I paid the taxes for 7 years, I think, and I did nothing for a couple of years, and then this thing redeemed and they– I think the redemption was actually like for $7,000. And I was just paying $500 a year. I almost doubled my money, in that investment. That was one of them. And then, I had another one that was a secondary lien in Illinois that I purchased, where I almost doubled my money. I doubled my money on that; I made about, 40% of my money on that one. So, there’s been a couple of grand slams, but most of them are little, you know. Are you know–

Mitch: Little basics? Little basics? Yeah.

Joanne: Yeah.

Mitch: You start swinging for the fifth sometimes you get burned, you just keep on getting a lot of basics, and you look back behind you, and there’s a big pile of runs.

Joanne: Exactly. Exactly. That’s what great. You get this big pile of them. [LAUGHTER]

Mitch: [LAUGHTER] That’s a way of diversifying arrest, too. Okay. One more question. If there’s a reset button what will you do differently?

Joanne: I think I would publish my books sooner and not waited to be published my book.

Mitch: Why is that?

Joanne: I think, and there’s a lot of things that I would have done sooner without waiting. I think am afraid to do something new. Also, I would have gotten involved; I would have gotten a mentor and gotten involved in a Good deal training, sooner. I always wanted to be a real estate investor, and what held me back and the reason why I got into tax lien is, I don’t like negotiating. And like a lot of these real estate things, you need to pick up the phone, talk to somebody, negotiate. With tax lien investing, you go to sale, you go to an auction, you buy property, and in most states, the tax collector does much of the work, or the county treasurer does much the work, and you really don’t have to negotiate at all. Now, with most real estate investing, you do have to negotiate. Now, with Hood deals, you only negotiate with Hood deals is when a contractor that rehabbing the property, because the realtor makes an offer for me. And it’s not like you are negotiating with somebody that owns the home, and that is emotionally attached to it, it’s the bank and am negotiating with them, the realtor is. So, I do like that.

Mitch: You gotta get out of your comfort zone. Go buy a book on negotiating and get, because there’s a lot of money to be made in front of the owners, like a lot.

Joanne: So, that’s the thing that I would reset, if I could press that reset button, I would have done that quicker. I am learning now. Because am learning to negotiate with the contractors for the rehab. But, If I were to press that reset button, and learn to negotiate right from the get-go, I could have done that some real estate deals that am doing now, some few years ago, along with the tax lien.

Mitch: So, you mentioned you would have published your book with your– what was the name of your book?

Joanne: Oh, the name of my books is “Tax Lien Investing Secret: How can you get 8-36 % return on your money without the typical risk of real estate investing or the uncertainty of the stock market”.

Mitch: There you go. And you can get a copy of the book in,

nd you can also get a copy of a free webinar of tax lien investing secret. There’s a whole bunch of stuff there. When you go to the show notes, you go to this link

, all lower case, you’ll gonna see all the different things she has there to offer. If you buy the book, you’ll gonna get some great bonuses. I don’t know guys, am excited for you guys to get to know Joanne Musa. Because, she is an expert in what she does, and this could be your way out of the J-O-B. Whether you find Owner Financing Homes by Mitch Stephen or Tax Lien Secrets by Joanne Musa, or whatever. Just find a way to make your dreams come true. Get control of your life and your time, and your financial future. Don’t let people dictate you for the rest of your life. When you go on vacation, how long can you stay, how much money you can spend, or how much money you have to spend, take control? This is what this podcast is about, is helping people find their niche. We are interviewing a lot of people in this podcast, from all different genres of real estate investing and financial freedom ideas or even just attitude. But, it’s all because I want and hope and wish for everyone that they get most out of their life and that they find where they belong, and that they find how to become that next level of free. I don’t know that we’re really ever free unless we go and be a Tibetan monk somewhere, but I was not cut out to be a Tibetan monk, so am gonna buy my freedom with money.

Joanne: [LAUGHTER]

Mitch: That’s what you’re gonna buy it with. If you can buy your freedom with jelly beans, then we’ll all be writing books about jelly beans. But, you can’t buy your freedom with jelly beans. You’ll gonna buy it with money and so, that’s it’s all about. It has been a fantastic interview, Joanne. I appreciate you being on and thank you so much for your time and effort in an interview because you are wonderful interviewee and I enjoy talking with you.

Joanne: Well, thank you, Mitch. I certainly enjoyed being here, and I feel honored to be your podcast interview. So, thank you.

Mitch: All right, well you have a great one, and we’re out of here, gang.

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