Tapping Into Opportunities In The Texas Foreclosure Markets With Jack Zagunis

NC4 43 | Foreclosure Markets

NC4 43 | Foreclosure Markets


There are a lot of opportunities to take a look into in the Texas foreclosure markets. In this episode, Jack Zagunis from Roddy’s Foreclosure Listing Service shares all of the different deals and opportunities that you can find on the Texas Foreclosure Lists that FLS provides. Jack is deep into the Texas foreclosure data and sees things that others don’t. He has a better pulse on the Texas foreclosure markets than anybody else. He is the guy behind what used to be known as the Roddy Report – a staple for note investors plying the foreclosure route. If you’re interested in tapping into opportunities for closing deals in the Texas market, this episode is worth tuning into.

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Tapping Into Opportunities In The Texas Foreclosure Markets With Jack Zagunis

I’m with our second expert here on Note Camp 2022. This guy is a badass. He probably has a better pulse on the Texas foreclosure markets than anybody else because he’s deep into the data and sees things. Foreclosure Listing Services have been around for a long time. It was known as Roddy Report back in the day.

Jack is the guy that’s handling it and is working with investors like yourselves and helping provide a foreclosure list out there. Jack, we are honored to have you here on Note Camp 2022. It’s the first time you are speaking here at the actual conference but you have been on the Note Night In America Podcast. I’m glad to have you. Thanks for joining us.

Thank you very much for having me.

Do you have a presentation you want to talk about the markets or just a conversation? How do you want to roll this out?

What’s fun about the foreclosure market and it’s something that’s always changing. We could get into this month and in a couple of markets, Harris County, which is Houston, and Dallas County, which is Dallas. They made it easy up they are in Dallas. Let’s say the list is fresh. It just came out, now what do you do? What are you looking for? Where is the lowest-hanging fruit? Where are the people that you can help the fastest? I would love to go through it like I would if it was the first day it came out.

NC4 43 | Foreclosure Markets

Foreclosure Markets: What’s fun about, uh, the foreclosure market is that it’s something that’s always changing.


Let’s do that. That’s the thing. You guys are published now. Let’s talk a little about what makes Texas unique compared to some other states first. For folks that are outside of the Lone Star State. We have that weird first Tuesday of the month where other states are doing it either daily or at different times of the month. Let’s talk about some specifics that lead up to people getting on the foreclosure list.

People love it when I break things down because sometimes you and I have been doing this for a long time, and we jump right to the end but let’s start at the beginning. Somebody says, “I want to buy a house. I don’t have $300,000. Can you loan me $300,000 to buy a house?” The bank says, “Yes. I believe that you will pay me back that money to buy the house but in case you don’t, I’m going to put something on this called the deed of trust that’s attached to this promissory note that says that if you don’t, we do not have to go to a judge in the State of Texas,” because other states are different, “Sell this property on the courthouse steps to the highest bidder, and you are signing off now that you are okay with that.” They say, “I’m okay with that. I will make all my payments for 30 years.”

What happens is that they miss about two weeks of payments and then get a late fee. They miss about another two weeks of payments, and at that point, they get it reported to their credit. Usually, it’s about 2 to 3 months down the line. They get what’s called a Notice of Default, which means that they need to cure not the whole note but what was owed. Twenty days longer than that, there’s what’s called the notice of foreclosure. That’s when they show up on our list. They have 21 days at the minimum. They can give them more time than that before it’s going to be sold on the courthouse steps. That’s when we are picking them up.

What’s different about our state and other states is that Texas is 21 days, that’s 3 weeks. That’s not much time. In California, it’s about a year. I remember when I lived in Colorado, it was 90 days, maybe it’s longer now, but 21 days is a very short amount of time for them to either refinance, declare bankruptcy, stop the foreclosure, sell the property or whatever they can do to get that thing stopped.

The bank has got to file everything prior to 21 days. If they file twenty days out, it gets kicked to the next month. It’s got to be 21 days prior to the first Tuesday of every month.

If today is nineteen days before the next auction, they cannot file a foreclosure for September. They have to file it for the October auction or later. They can say, “I’m going to foreclose on you on the first Tuesday in January.” It’s up to them. It’s their discretion. They probably want to do it sooner rather than later. They have the minimum amount of time there.

How do you guys collect this data? Is it having to go to the County Recorder’s Office or County Clerk’s Office and scrub public notices or how does this work for you?

This is a public document. If you’ve ever come through the documents, you might notice that they are all written by different trustees, which are usually attorneys. They are usually in a different forms. Some are in legal or shorter form, whatever non-legal paper is called. Some have the address, some don’t. They all have legal descriptions but they are all different.

It’s hard for a computer program to do that, so we go through them 1 by 1 and figure out which legal description belongs with which property. It shows you roughly what they should owe about this time if the property were properly amortized, meaning the loan was paid down to whatever it was. We then put it on our master list. This is public information that you can get from each and every county. We make it easier to read and interpret.

It’s very easy to read and interpret on a spreadsheet versus coming through hundreds and hundreds of legal documents out there. Should we pull up a list or where do you want to take it from here?

We should pull up a list. I have been a part of listing in the past. The list comes out maybe 15 days or 18 days before the auction. When it comes out, what most people do is print off that list. They get a highlighter and a pen out. They are highlighting the ones they like and crossing off the ones they don’t like. They are shortening down that list. That’s the first thing that you should do. If you have a texting platform and you get a short list, it’s great to blast a text out or send some texts out or somehow get a quick response because there are some people that are ready to sell. If you are going to be driving by these properties and talking to the homeowners, you want to start with them first.

How are you getting the phone numbers to text out to these addresses or homeowners? Are you doing a public record search or skip trace?

When somebody applies for credit, they basically put down a number, and then all those numbers are part of public records. They could put down a wrong number or change their number from the past but there are different services out there that do, and we do it too, that do a skip trace and figure out these are the most likely numbers.

In a foreclosure, it’s even more difficult because they are changing their numbers. They are not paying their bills and stuff like that. It is a little bit hard to get ahold of them but if you are able to with a quick text, then that will save you the gas money to drive to the house, the postage on something super slow, which is direct mail, which does work but it is a little slow like five business days to their house and different things like that.

David has a question, “Is he talking about contacting the current borrower to buy the property for foreclosure?” Not just buy the property but work out something. I’m going to pull up the Harris County list here or unless you want to share it and walk us through it on your side, what would you like to do?

I love that you are sharing it. What most people say to me is, “Can I contact the bank and buy it from the bank beforehand?” The bank doesn’t own it. The bank owns the note. You can contact the bank and maybe ask them to buy the note from them but you can’t buy the property from the bank ahead of the auction because the homeowner owns the property. They are the only ones who can sell it.

As you are looking through the list, the first thing I usually look at is how old it is loan. Now, everything is doing pretty good but I’m not going to look at any loans that were given in the last 3 or 4 years, especially if they are a VA or an FHA, because they probably don’t have enough equity to sell for a cash offer. That’s usually the first thing I’m doing.

There’s a column that talks about the loan types for you. It’s pretty easy to filter through to get rid of the ones you don’t want to. You are basically keeping the conventional ones.

Even older VA and FHA loans are totally fine because this market has been great. When I first started, though, you looked at the year because I started in 2013, and if somebody got a loan in 2007, they were still underwater by 2013.

There’s a loan year for you. You call them AE.

This first one, I don’t think I’ve ever seen that before. This guy got a $39,000 loan in 1980. He’s being foreclosed on. That’s a 42-year-old loan. There’s a story there. I’m not sure exactly what is going on there. It looks like a private lender. Maybe this is some inner family conflict or something like that. I don’t know but I don’t think I’ve ever seen a 1980 loan going to foreclosure. Usually, loans are paid off in 30 years. There is a story there that you want to talk to.

You got the mortgagor, which is the person who borrowed the money, and their name is Karen Burke. When you are going about this property, you are trying to find this Karen Burke. I love talking with Scott because he has all these other strategies about the loan and all these other things that you can learn about. If you are talking to the homeowner, you don’t immediately always want to come out with, “Can I buy your house?” Usually, the reaction is no. It’s, “How can I help? What’s your story?”

Sometimes the situation may be that you are able to help them in different ways. You can help them find the right attorney if there is something illegal going on. You can help them find the right lender if they get a new job, and maybe they can refinance but most of the time, it is going to be that they need to sell your house to you. That’s why you are there because they’ve got a timeline ticking down.

One of the great things too besides selling the house, is maybe taking over the subject to. I’ve always loved using this list to find subject-to-deals where people wanted to walk away, especially with all the new loans that have originated in the last couple of years with low-interest rates. Maybe they are a few months behind but that doesn’t cost that much to bring up the loan back to performing and you can take over a property without having to jump through the hoops of financing at low-interest rates.

NC4 43 | Foreclosure Markets

Foreclosure Markets: One of the great things besides selling the house, is taking over subject to.


A little bit about mortgage lending. If a borrower is late on a mortgage and it has been reported to their credit bureaus, they are not going to be able to go out and get a traditional loan or a refinance from a traditional bank for at least 24 months because no bank is going to let them, especially if you got 3 mortgages late in a 24-month period. If you do take it over subject to, you are helping them get their credit back on track as long as you keep paying that mortgage, which is what you would want to do.

It’s all about talking to the homeowner, figuring out what their situation is and what they need. When it does come time to sell, then you are the one that they know and trust, and if you buy it subject to or outright, then you are the one who tried to help them. “We hooked you up with three different lenders.” Maybe, in this case, they all said no. What’s next? They say, “We need to sell.” “I’m a cash buyer and real estate agent. I can help you.”

I love that too. The mortgagee, one of the things that we do on the note side of things is we will filter this. We will get rid of the Bank of Americas, Chases, Cities, New York Mellon, and Deutsche Bank. They are not going to sell one off note in a lot of cases but we do find big-deal loan servicing like home loans and sell stuff. There’s a quite a few in Harris County. You mentioned this, private investors are potential investors. We do a search to see if self-directed IRA companies. Quest Trust had a couple on here from them that they were foreclosing on. It’s a great way to find potential investors to fund deals who are familiar with this too.

I haven’t used it for this yet, but what I hear from other people is that the private lenders are easier to get ahold of than the foreclosure. For example, the foreclosure person they haven’t been paying their mortgage or other bills. Maybe their phone got cut off, changing phone numbers or their voicemail is full all the time but a private lender usually has the same phone number for a long time. They have money, and when somebody is calling them, it might be to make more money. They are answering their phone and stuff like that. If you skip tracing a private lender, you probably have a higher chance of getting a hold of somebody than you would an actual person who’s in default.

Plus, you’ve also got the attorney the title of the foreclosure form is another context. “Mr. Jackson said you are handling two foreclosures for private individuals. Do you know if they would be willing to potentially sell the note?” We’ve had success being introduced to private investors that way too.

I love coming on this.

Let’s go through some more of the information so everybody can get an idea here. What does volume mean?

There are the legal documents that you were to look up if you wanted to find the foreclosure documents. You would find that with the county records.

This is Harris County. It’s the list for Houston. You got the original loan amount, the monthly payment, the interest rate, the year the loan expires, the year of the construction of the house, and the assessed value. How accurately do we know what the assessed value is? It used to be pretty good. If I was here in Travis and Williamson County, I could say, “Let’s add 5% to 10% off the assessed value to get a pretty close value if it’s in good condition.” These days are a little different.

By assessed value, we should have another word in there that says tax-assessed value. This is not us doing us CMA. We did not pull three local properties that are very similar. This is what it was taxed on the last few years. It could be much higher or lower. I’m not going to say always add something to it. The property I’m living in got assessed for $319,000 but a neighbor put their house on the market and got $401,000. It’s super similar.

I’m grateful I’m not going to bring that to the attention of the appraiser district. That’s going to give you a rough idea. If you are looking at the tax value and you say, “The tax value is $279,000.” You talk to the homeowner, and they say, “I need $500,000 for it,” you can quickly see that this guy is the tire kicker. He is not super serious but if they say, “I need $190 for it,” and you see the tax value of $279,000, it might be even worth more than that. You want to take that appointment.

You get the square footage, the beds and baths, and the number of units, which is good. Let’s talk a little bit, what does the previous posting mean?

When you pull up this site, it’s interactive on the actual website. You could click on the check mark, and you can see some of these people have been playing these games at the bank for a decade. That means it has been in foreclosure before, and you can see what months and years they were in foreclosure. Some people have been in foreclosure 10 to 12 times. They’ve always saved their self from it but that means that it has been posted for foreclosure in the past. It’s amazing how many of these people are in and out. Imagine the stress on your health and your life and stuff like that. I don’t think it’s worth it. You got to move on.

I like using this list because if they have been on here before, the foreclosure has been dragging out for some time. That could be because they were on just last month like, “Jack said they could be on there for years.” When I filter these by previous listings, the banks are a little bit more motivated to sell the debt to us because they are tired of playing games and want to get this off their books, and are often willing to sell the debt to a discount that we could pick it up. It’s a numbers game like anything else. I like that as my hot buns. A lot of times beforehand, a few years back, you would see a lot of short sales that were listed in the banks that would come down the road while the property was listed, waiting for a sale to go through in some cases too.

I wonder if there has been a short sale in the last couple of years. It seems like as soon as somebody buys, it’s up in value.

We have approved several short sales with some more notes. In Austin or Harris County, it varies a little bit but there are always those outliers you will see sometimes. It’s not nearly as private as it used to be. As I talked to a few folks in Dallas and Harris County and some agents over there that have specialized in short sales for years, and they said they’ve seen an uptick in some cases. This is not the property but the street address of the borrower, correct?

Yes. In most cases, it’s the same but if you are sending letters out, you want to send them to that property. One person there is in Lynchburg, Virginia. It does sometimes differ where it’s maybe a rental property or a second property of theirs that’s in foreclosure.

That’s also a good targeting point if it’s a different address. It’s somebody who is probably motivated to move at that point because they are not living locally.

That’s a very good point. If you are in a big city like Houston, Dallas or San Antonio and there are a lot of foreclosures, you have to try everything but find something you are good at. Find the previous posted and then sort by that and go for those first and talk to the bank or find outstate owners and go for those first. If you are in a smaller market, like I live in Waco, and there are 28 foreclosures this month, you have to do a little bit of everything and have all the tricks in your pocket. Also, maybe do Bell County too, which is South of us.

In the big cities, be a specialist, and find one of these things that Scott and I are talking about. Get good at it, and be the best in town in these medium and small-size markets. Beware that all these things are out there, and you can use this in multiple different ways. It might be hard to do a 600-plus list and do all these things.

I would agree because, in Austin, there’s not much here in Travis County. You mentioned Bell County. When I was pulling stuff, Bell had 189 that were good foreclosures, which is a surprise that it’s a bigger chunk of foreclosures compared to Travis County and a few others out there. David asked the question, “Who do you use for your skip tracing? Is there a company that you guys like to use or recommend?”

We have a website called Prophawk. We installed skip tracing there. It’s new, and we do a good job at it, and it has good numbers. Before we use that, we will throw a shout-out to Skip Force. They are out of San Antonio. They do a good job as well. There are a lot of different companies out there. It is a numbers game. People got upset, and they were like, “This wasn’t the right number.” You got to be sending 100 to 200 messages every few days to get some positive feedback.

People do change their numbers. You got the auction date here. Do you ever see numbers on here about what they are looking to start the opening bid at in a lot of cases?

A lot of people ask about that. It’s typically the estimated balance of the loan. Opening bid is something that the bank can pick the day before the morning of. We don’t usually get opening bids on our list. They can start at $1. They can let the people standing around start it but they usually won’t take less than what is owed on the property. There is a column here called the estimated balance of a loan, and that’s usually where you will see it open.

Is that further to the right or the left, if you know?

It’s going to be right next to the original balance of the loan column. That’s in the estimated unpaid balance in column E. I use the PDF. I’m more of a visual guy but I bet you a lot of your readers love a spreadsheet.

It makes it easy to slice and back in a lot of cases. Let me go back. You got the attorney’s name as a trustee. Is the sale time always accurate, from 10 to 1 in a lot of cases?

When someone posts a notice of foreclosure, they are going to give their time. It’s either 10:00, 11:00, 12:00 or 1:00. They get three hours after that to foreclose. That’s always going to be the same day. People are like, “What month are these?” These are all on September 6th. Basically, this is 10:00 AM to 1:00 PM. I’ve mentioned to some of the people that I work with that, “If it happens after 1:00, it’s not a legal foreclosure,” so you can walk away after 1:00. Somebody corrected me and said, “No, it still could be.” They have to do it between 10:00 and 4:00. I heard they have to do it in a three-hour window. All of these ones were set to start at 10:00, so that means that they shouldn’t go after 1:00.

That’s the thing. It all depends on the volume too. In some counties, it’s faster because you have less but when you’ve got a lot, it does drag on a little bit there for you. Prophawk is what you are using in your service. What was the other skip trace that you mentioned?

That’s Prophawk.com and SkipForce.com. Skip Force always did a good job by us and what’s cool about them and our service too is that they give you which number would be the most accurate. They give you a bunch of options and then which time might be the best time to get over somebody.

“If you win the auction, do you have to pay in cash by 4:00 PM that day?” David asked about the foreclosure.

Yes. “How do you arrange payments?” In every state, it’s different, but in Texas, it is cash on the barrelhead. As soon as they say, “Sold,” you are going to give them your cash right then and there. People bring cash or cashier’s checks in auctions. I haven’t been to Houston. I understand it might be different because it’s such a massive auction. I have been to about fifteen other counties.

What people do is they make their cashier’s check like a wallet. They might have some $100s, $20s, $50s, and $10s, and then they are going to write over seven checks made out to themselves to the trustee. If you go a little bit over, that’s fine. They will mail you a refund check but you can’t go under. They will re-auction off the property and exclude you from bidding.

That happens every once in a while, people don’t have enough money. Basically, if you don’t pay, it goes at the very end at 1:00 again or roughly around there.

They will auction it back again. That’s an opportunity to get some deals. If you see your favorite property, go up for $30,000 more than you were willing to pay, and wait until the trustee walks away and leaves because sometimes people won’t pay. They will re-auction the property off, and instead of 30 bidders in front, there are 4 because everyone thought it was over. You get it for, sometimes, less.

NC4 43 | Foreclosure Markets

Foreclosure Markets: Sometimes, people won’t pay and then they’ll re-auction the property off. And instead of 30 bidders in front, there’s four, and sometimes you get it for less.


You’ve got the GRF or Zillow mapping here. It pulls up on Zillow for the property, which is nice.

Zillow’s got a great history. Sometimes it’s currently listed. Sometimes it has been listed in the past. You can see some images and things like that from past postings. It’s helpful to have that there.

“Yes, David. You have to pay over. They will refund you.” As Jack said, they will send you a check for the overage if you got to pay. If your bid is $241,000 and you have $245,000. You would’ve to pay the $245,000 that’s what you have, then you will get a $4,000 difference sent to you.

Some trustees will do it differently. I wouldn’t assume that. Some trustees may say, “Wire me the money or you can go to the bank and come back,” but it’s up to them. For example, they are doing three properties here in Harris County, and then they got to do sixteen properties in Fort Bend County. Let’s say they let you go and come back, and you don’t come back, and now, they are late for the next one. They have to wait for a whole another 5 or 4 weeks to do the auction again. They are not going to play that game. They are going to need that money right then and there so that they can move on with their day.

You gave an idea. Harris County, there are 589 foreclosures. Is that up, down or average?

It’s over 600 now. We are still working on Harris and finishing it up. It is up. Some of you have been around a long time, and they were like, “I remember when there were 6,000 in Harris County.” We are not there. Other people who have joined this in the last couple of years are used to seeing 300 to 500 every month. We are up well over 100. We are up over 100 in Bexar County. We are up over 60 in Dallas County. We are up over a 100 in Tarrant County. Foreclosure numbers are coming up.

Do you like buying properties with equity? What’s your favorite thing about this when you get a list in Waco and Bell County? What do you like targeting for yourself?

I’m relatively young and new to all this. I’ve never had the cash to go to an auction to buy. I have always been able to either buy for other people at auction as their buyer because they are in multiple counties or I have been wanting to talk to people before the auction. I wanted to find somebody that I could make an offer of, say, $0.70 cents on the dollar of what it’s worth. I didn’t want any newer loans. I then also didn’t look for anybody like that 1980 loan. I just want to hear the story but any old loans where they only have like say, $17,000 left to pay because they are going to get it figured out in a way that’s not selling their home for pennies on the dollar.

I usually was looking for anything with 50% to 20% equity somewhere in there based on the tax value because any less, they will have better options than me. If any more is owed on the property, I can’t do much to help them. That was before I knew subject to. I could probably look into subject tos with them, in that case, though.

A lot of these loans were originally the last couple of years, and with rent rates being up, it’s pretty easy if you take over a property subject to just put a renter in it to cover the rents in a lot of cases and cashflow that way. It’s one of the things that we target, especially if the bank wants to sell us the note at a price that makes sense for us to reinstate or modify. I’ve got FLS Online up here for you. It’s basically 4Closure.info. What’s great is that you got a free sample there but you’ve got so much great information, the auction date down to the timing frame. How do people order these lists? Should we walk through that?

Let’s look at the order, and then I will share with you some cool stuff. Hit Order Now up at the top of the page, and each county has its own price. From here, you are going to click the pre-foreclosure auction properties list. We’ve got some tax sales and a post-bankruptcy alert list. You are going to pick your county, and then your county is going to have its price. It’s nice that it tells you how many leads are in that county before you buy.

Somebody was about to buy Jack County, which is a smaller county in the middle of Texas. They were like, “There are no leads here.” I’m like, “I’m glad you saw that before you paid for it because there were no leads that month.” Travis County, this is going to show you 50 properties on the list, and then you get an option to buy month-to-month, 6 months or 12 months.

Bexar’s got 373. That’s San Antonio. Williamson for 40. That’s cool there.

Let’s look over on the side menu where it says login here, where it’s pointing to those three horizontal bars, and pull up resources and statistics. Keep in mind that this is only very early in the month, meaning that we have finished our tier-one county. Our tier-two counties like Harris and stuff like that are coming in. You can see here how many properties we have like Collin County. That’s probably the most popular county. The number of investors versus the number of properties has almost doubled. There were 60 properties in September, and there were 103 in October.

This is good fortune that we came on. Grayson, which is North of Collin County, has doubled from 11 to 21 or almost doubled. You can see that foreclosure numbers are starting to come up. I only see that growing as people’s taxes are increasing and inflation keeps going. We have been waiting for more inventory now for a few years since COVID started. We are starting to see it now. This is a page you can scroll through and look at and be amazed at how many more foreclosures there are every month.

You are 637, up 106 over last month, up 112 for Bexar. I saw the note city down in Corpus Christi, which we talked about. We thought Nueces County would be one of the hardest, heavily hit foreclosures, and we started to see that. You are right. As inflation goes up, people are having to make a decision, “Am I going to pay my mortgage, pay for gas or put food on the table in a lot of cases?”

Everything has gone up. My medical premiums have gone up. My cell phone bill went up for the first time in several years. All of Texas’s cell phone bills went up, and just everything. It’s insane. It’s going to be hurt. These are the numbers now, and you can keep logging in here. This is for anyone to see. You don’t have to pay to see this and see what the numbers are throughout the state and if they are higher or lower than last month. These smaller counties like Palo Pinto and stuff like that, they will be upgraded throughout the next time.

Donald said, “My cell went up by $15 too.”

That was a weird one. I read an article about it. It’s paying for all the rural phone lines. Even the rural people are paying for it too. They are depressed during COVID. It’s for a good cause but it’s annoying. If everything goes up by $15 to $50, it’s going to hurt everybody all around.

“Can you explain what this struck-off list is?” David asked.

In seventeen counties, we go to auctions, and we are taking notes of what things sold for. The pre-foreclosure list is the list of properties that are coming up for the next auction. The struck-off list is what sold at the last auction. For example, you are a Californian investor, you are in Missouri or whatever, and you are like, “I want to know what things are selling for at the last auction.” You can get a struck-off list, and you can see live during the auction what things are selling for.

Allison asked a question, “What’s the difference in the Sheriff’s Auction List?”

There are two ways someone can lose their home. One is through judgments and taxes. That’s the sheriff’s list. One is through their mortgage or HOA foreclosure, which is the trustees’ sale, which is the main one we have been talking about. The tax list is a great list. I’m sure Scott has got a lot to say probably about that list but these are people who are losing their homes because their taxes are behind.

The big difference is that one is usually done by an attorney or a trustee, and then one is done by an actual constable or a sheriff. He’s at the auction with a gun and a badge reading off properties and selling them. You know which one you are buying. The major difference people will talk about is the right to redemption. The homeowner or anyone interested in the property can buy the property back for a set period on the tax or the sheriff’s list. Whereas the mortgage foreclosure, unless it’s a special circumstance like an HOA foreclosure, can’t.

NC4 43 | Foreclosure Markets

Foreclosure Markets: There’s a right of redemption, meaning the homeowner or any in one of his interests in the property can buy the property back for a set period of time on the sheriff’s list. Whereas the mortgage foreclosure, unless it’s a special circumstance like an HOA foreclosure, they can’t.


The right of redemption usually lowers the price a whole lot. If you are like, “I got $20,000 saved up. I’m ready to start investing.” You are probably not going to be able to buy a property at the trustee sale but you may be able to get 1 or 2 at the tax sale. You have to sit on it for a while until the right of redemption sale.

Is it 2 years for owner-occupied or homestead, and then was it 6 months for investment in raw land or something like that?

Yes. Agriculture and homestead exemption is 2 years, right of redemption, and then 6 months for everything else.

Joe says, “There’s no inflation out there. What are you talking about?” We will keep politics aside. You track fifteen auctions and also have another service about bidding on stuff there working for folks that can’t make it to the auction too. Do you want to talk a little about that?

We are at seventeen counties every month. We have those lists because you have to have people there. There are public records of what things are sold for but it takes a while to get put into the system. We are there in those auctions but if you can’t go to an auction, we can bid for you. We do have people on site. It is a $500 fee. If you are interested in online bidding, there are a couple of options for you.

The tax auction in Dallas County only is online, so you don’t have to be there in person. For everything else, you must be there in person, which is old school. There are people there with hundreds and hundreds of thousands of dollars, maybe millions of dollars, in their pockets, and they are standing around outside of courthouses. Usually, everyone is carrying a concealed carry. It’s probably the safest place you will be in, Texas, for a little while. It’s weird. It’s done like it has been done for years.

There is a company out there called Auction.com. They have a new feature that they started up during COVID for their properties only. It is a trustee, and there are about a dozen or more trustees at every auction. On their properties only, if there are 500 properties on the list, they might have 30, 80 or a smaller portion of them that you can bid online for theirs. You do have to put up a deposit and stuff like that. You may be missing out because everybody in the world can see Auction.com‘s properties, and there are all these little trustees with 1, 2 or 6 properties that will come up that you won’t ever hear about because they are not on the website’s list.

If you can’t make it in person, you can bid online with Auction.com on their properties only. You can bid online at the sheriff’s list with Dallas County only, the rest you have to be in person or you can hire us or some other proxy to be there for you. We have a $500 fee. Email me at Jack@FLSOnline.com if you have questions about that.

I have a question. Are folks wiring you funds before the auction for you guys to hold or how’s that working if you are bidding?

Fortunately or unfortunately, how it works is that we still have to have those cash or cashier’s checks. What you are going to do is you are going to either send them to us or we are going to meet with you before or the day before the auction. You are going to give us the money, all the cashier’s checks. We have this agreement you are going to sign that says, “We can sign on behalf of you on these checks.”

You are going to give us your max bids. We can’t be on the phone with you saying, “John went to $200,000, you know him. He likes to get out. He’s trying to scare us. Should we go $201,000?” You got to give us your max bids. “I’m going to go to $201,000 no matter what happens.” We will slowly bid up. If it goes to $202,000, and it’s a guy you hate, and you want to get him, sorry. You said $201,000. We are stopping there. You give us your checks.

It is a bit of a mind game. It is fun to go. If you can go, go. Even if you are not bidding, go the first Tuesday of every month, set aside 1 or 2 hours, go on your lunch break, and watch the bidding. Watch these guys or ladies. They have been at each other’s necks for years in bidding and waiting until they say, “Going once. Going twice. Dollar over,” and then they throw in one more bid to anger everybody. It’s a morbidly entertaining or dark comedy because people are losing their homes but there are some fellowships with all the people there.

Fellowship is a creative term for that. What happens after the auction? The winning bid, do they go evict people immediately like, “Get out,” or is there a process to doing that as well if they are still living in the property?

Somebody mentioned that if the properties don’t sell, they show up next month. Not really. If a property is auctioned off, meaning it’s read aloud and nobody bids on it, then it goes to the bank. The bank becomes the highest bidder for what they had put up. The ones that don’t sell and are on the list for another month got pulled, which means they didn’t even show up for auction.

If something sells at the auction, let’s say you were the highest bidder, and you own the property now. Let’s say nobody bids on it, that means the bank for whatever they had into it are the highest bidder. Now, the bank owns it. If you like to buy REO or straight from the bank, you can use that struck-off list and call the bank or the private lender and say, “I know you got this property back. I’m willing to buy it. I have to use a loan, so I couldn’t buy it at auction. Will you take $75,000 for it, “or whatever.

Two options. One, if it goes to the bank, you can make an offer with the bank. If it goes to an investor and you are that investor, you are the owner. You need to do a couple of things. You need to get insurance on it. Call your insurance company and say, “I bought a property.” If it’s occupied, they are going to charge you a higher insurance rate until it’s vacant, and you can get in it but you should still pay that higher insurance rate. There are a lot of stories that somebody might do some damage to the property or burn the property while they are still living in it. Make sure that you have insurance on it, even if you can’t get inside, and they are going to charge you a higher rate.

If it’s not vacant, you can get inside. If there are no keys, they don’t say, “Here are your keys.” You have to get inside your own creative way, change the locks, and then start your repairs. If it’s occupied, you need to knock on the door, and some people wait 2 or 2 and a half weeks until the deed comes in the mail. You need to talk to whoever is living there and ask them nicely to leave or pay you rent or whatever your endgame is. If they don’t leave, then you need to start the eviction process, which in Texas is very landlord-friendly. It’s not as bad as I hear in some other states.

It’s not like 2 years or 3 years in New York.

Unless there are little kids living in the house and get a super sympathetic judge, it should be 2 weeks to 1 month.

It’s pretty normal.

We can help with the eviction too, if you need help.

Questions for Jack. “Two years in DC,” Donald says. You can run for elected office and not pay. Too bad we can’t evict some of the other attorneys there. You’ve got the website. What is the lead propeller? As you said, portfolio builder, and this looks like your Prophawk login.

It takes you right into Prophawk. If logged in, it will you right in. In there, you can get probate leads, do skip tracing, and find similar leads to PropStream, so those likely default or have excess funds. You can find niche lists like that. There’s a texting platform in there so you can do your texts. I was testing out because they fixed something, and I sent 100 texts to a bunch of people in Hidalgo County because I was testing to make sure it did what it was supposed to do.

This guy called me, and I was so confused about why he was calling me. He called me from the text. The text is like, “I want to buy your house.” He said that he wanted $179,000 for it. I looked briefly at Zillow because I didn’t think I would get anything back that fast. It looks like the Zillow value is $240,00. I don’t know much about Hidalgo. I will tell my boss about it and give it to him. You can text through there, make cold calls, send ringless voicemails, and all kinds of cool stuff that’s the next level up from getting a foreclosure list.

That’s awesome that you have implemented that. You’ve come a long way with doing this stuff and the streamlining and trying to make it easy for a lot of folks out there, which is great. Some questions or comments here. Allison asked, “Can you reinstate if you win the auction or would you want to do so?” Alison, once this goes through auction, there’s no mortgage any more. The bank could potentially accept the borrower to reinstate but they should be reinstating beforehand or in a lot of cases, people will file bankruptcy the morning of the auction before 10:00 AM to delay the foreclosure option. Am I right, Jack?

A foreclosure does wipe everything off. Meaning, if a property was all jammed up with all these affidavits of heirships and it was given or it’s a new owner. There should be no loan on it now because you paid cash for it at the auction. There is a bunch of stuff we could talk about in the title, where, “It’s the first to write is the first in rights.”

For example, if you buy a loan that was in 2009 and somebody took out a loan in 2012 on that same property, you bought the loan, and from 2009, that 2012 loan should get wiped out in Texas. If you bought the 2012 note, that’s the one that was in foreclosure, and in 2009, in which the first mortgage is still in place, then that is still attached to the property. Other than that, as long as you are buying first mortgages, there are some super senior liens, taxes, IRS liens, UCC liens, and stuff like that, that you wanted to do a title search and make sure that none of that stuff is owed that will still stick to the property but most of the time there’s nothing to reinstate.

How many counties out of Texas do you cover?

We do 230 of the 254. The ones we don’t cover are small that’s hard to get the data from them. If someone wanted them, we could figure out a way to get them but we do 230.

It’s usually a small county that may not have a full-time staff or the county doesn’t make it easy for you to get out there and record it. They don’t have maybe the most effective online services for you to pull those filings too, correct?

Yes, that’s a big difference because you can get a nationwide list of foreclosures for $99 a month with some of these other services but they are using computer program algorithms to pull the data and it’s not very accurate. It’s not very fast. We are only getting data that we know we can get. We are pulling it by hand. That’s a big difference. We are not going to say, “We have the whole state.” Our competitors will say, “We have the whole country for $99,” but you will look at the two lists side by side, and you can see these are not the same.

They are not the same. I can vouch for that.

I’m honored to be part of the company. The company does what they say they are going to do. They do a good job. One thing I did want to bring up on the taxes I did want to mention we have a YouTube page, and it’s free to see those YouTube videos. Our number one question was, “What’s the difference between taxes and mortgage foreclosures?”

I got Curtis Roddy to buy a lot of tax foreclosures to do a one-on-one sit-down interview with me. It’s a 47-minute video or so it’s called What to Know About Tax Foreclosures or something like that, and it’s on the Foreclosure Listing Service YouTube page. If you are interested in that, that will probably answer all the questions. There are other people out there, gurus and stuff, that will charge you a lot of money to learn about tax foreclosures. They probably have good information too but that’s free.

We’ve got a guy, Arnie Abramson, who will be speaking out of Dallas. You may know Arnie.

Arnie is legit. He has been doing that for a long time. He used to be a member of Roddy’s. A couple of years ago, he dropped out, maybe when COVID happened. He and I have spoken quite a few times, so he knows what he’s doing.

David asked, “Can you see in the list whether these are mortgages or 1st liens or 2nds?” Is there a column that shows that or it just shows the balance of the mortgage that’s foreclosing?

It’s the balance that the mortgage that’s foreclosing. You would need to do a title search on these properties to verify what position you are in. We have a video under resources and a video vault on how to do your own. You can pay us to do one. We have ways of doing them for you or you can contact your title company to see if they will do one for you.

The thing I like doing is taking this list and targeting that. If you get interested parties who are interested in working with you, then you pull a title report. There’s no reason to pull a title report on the front-end side. Probably 95% of what’s on here is first mortgages because not a lot of seconds have originated in the last several years, for the most part.

You should always pull a title report before closing, before you decide what you are going to do with it but still don’t go down a rabbit hole in one asset because you will end up missing out on so much. It’s the blanket approach. Narrow the list down and target. Those that respond, then you do a deeper dive of due diligence but doing all your due diligence in the front on each one is a waste of time and energy.

NC4 43 | Foreclosure Markets

Foreclosure Markets: Don’t go down a rabbit hole on just one asset because you’ll end up missing out on so much. Doing all your due diligence in the front on each asset is just a waste of time and energy.


Unless you have somebody doing a bulk title search for you, for example, that might limit which houses you are going to drive by. I’ve got a couple of things to say about this. One is that we teach the five steps of buying homes on the foreclosure market, and that’s from the book, Bidding to Buy, written by Aaron Amuchastegui. He is the owner of Roddy’s. One is that you filter your list, which Scott talked about. The second is to drive by the property and determine what the repairs might be. If someone is living in it or not, make those notes.

The third is to do a CMA and figure out what you might pay for it. If that’s less than the estimated balance of a loan, you may want to cross that off your list. You are crossing properties off the list all the way from the beginning, “I’m not interested in that commercial property, that land or home built before 1970,” and then the next step, you cross out a property, “That’s behind. That one was burned down, and that one was next to a railroad track. I’m not interested in these ones. The next one, “I would bid too low for this to even be considered.” The fourth one it’s getting to where it might cost you some money sometimes, which is doing the title search. Figure out bad titles and cross off a few more. The title should be one of your last things.

The other thing I will say is if you are buying this before the auction, never ever buy these properties tabletop, especially if you are new but even if you are not new, take a contract to a title company just like you had a real estate agent because you might not even be talking to the owner of the property there. They are going to figure out what’s owed.

They are going to do a title search as part of their title insurance that they are going to give you. You don’t necessarily need to do it ahead of time. It’s great. It might stop you from wasting a little bit of time but the title company is going to do that as far as their due diligence to help you close. If you are buying at auction, there’s no title insurance and no title company, so you need to do it on your own.

We are talking about if you are going to buy the actual property from the homeowner before the foreclosure auction, so yes. We are talking about buying the note, then we are contacting the bank. If I’m targeting the bank to buy notes, I’m not targeting the actual property on the list. I’m using that property as a hot lead into the bank to get their full list of everything.

A few loan servicing we saw, “I see you are foreclosing on nine notes in Harris County. Would you consider selling any of the notes on those? Can I get on your list to see what else you have across the country to work?” That’s what we do. If it’s a foreclosure and you are trying to buy the property, if you’ve got a contract and need longer to foreclose, if you can get the borrower to sign over a letter of authorization, and contact the bank, sometimes they will delay it. They would rather sell versus having to take it back, do the eviction, and do the rehab themselves.

Sometimes the banks will delay things for another 30 days if you are working on a situation or a strategy for it. Sometimes they won’t. If it’s like a day before, they are not going to delay the auction if you are making a conflict. You need about 6 to 7 days prior to the auction. This is why you got to get on this stuff on a lot of fast-action basis. I remember walking to a house where somebody had gotten 100 postcards because they were on the foreclosure list in the first three days. They are overwhelmed and don’t know what to do. They were calling, trying to see out what was the best solution they could get.

What did they do?

They went with me. We ended up delaying. What was funny was when we sent out a letter or postcard, I always put my face on it at the bottom of the postcard. “I put my picture on here, so you know that I’m a real person with real solutions,” and they like that. If I had met them at Starbucks, they wanted to know a name, and it was always stressful. They had a name to match with an ID, and they like, “Real solutions. You are not trying to be cutthroat. You are trying to work out with me in some fashion.” On a postcard too I sprayed my wife’s perfume on it so that it smelled good, and I always get them to call me too faster.

You send in a bunch of postcards, and they open the mailbox. You want yours to stand out a little bit differently. They are like, “This smells good. What’s going on?” We did a side-by-side one time. We sent a postcard with a brunette girl’s face and then a blonde. The blonde always got more responses than the brunette.

That’s called split testing, everyone.

Demetri asked a question. “Ask him about if an investor buys a tax lien on a property and that property doesn’t sell at the auction.” If you are buying the tax lien at the auction, you are buying at the auction because the tax auction is different from the actual foreclosure auction.

I don’t know if you can buy a tax lien from the county. I don’t think you can. Afterward, if the county owns the property, you can buy those properties, and the counties do sell properties that they’ve taken back from people that haven’t sold to investors on the courthouse steps. That does happen.

Demetri stands in Florida too, so it’s a little bit different in Florida. Florida is a tax lien state where if you buy a tax lien, you’ve got three years for the borrower to come back, and you are making 12% to 18% if you hold a tax lien, and then after three years, you can then foreclose on the tax lien to take the property back. Florida has got different rules in Texas there.

Scott knows a lot of different counties but I took a great class on the subject to but took that class in Colorado and none of that applied much to Texas because you can have contracts that last over six months here, which almost eliminates the exit strategy of a lease to own. Be way and knowledgeable about what information you are taking from whom. I’m talking mostly about Texas foreclosures.

Lease options that are anything over 180 days are the legal hearing in Texas. I remember when that got enacted, nobody knew about it. They got passed because some state rep’s cousin had gotten taken advantage of because they put $20,000 down on an auction, and then they didn’t fall through. The investor was evicted, canceled the contract, and nobody knew about it. The state rep went in front and added a law to the state here, which is a rare thing to do here in Texas in a lot of cases because it’s so strict to get stuff passed.

That makes those subject to a little harder because you can’t quite get as much.

Let’s talk about the drive reports a little bit.

They stopped doing the drive reports. We do need to update that. You will need somebody to do this. The problem was that my boss was going to auction in El Paso, and as soon as the property came up, they would pull up Zillow and get a street view. One of the properties was burnt down in the last several months since that street view was taken. He is like, “You guys need to drive by all these properties,” and they didn’t have the time or didn’t want to do it. We were driving by properties for a fee. We don’t do that now. There weren’t enough people using it but we need you to drive by the property before you should have eyes on it and know more about it.

We’ve had that happen before. People bought notes, and they went off a Zillow. The realtor that drove up to the house looked at the pretty house and said, this has got to be the house, not the burnout shanty shack or the slab. Here’s your asset.” That’s not the asset. We’ve all seen those situations where our property is sold. It’s only 1 foot with the property that somebody is foreclosing on or selling off at the auction. It’s not the actual property.

It’s right next to it but it’s a strip. That happens in the tax auction all the time because you are getting a legal description. It’s not always easy to find exactly what the postal address is because you are getting a legal description instead.

Do you have a service that’s pulling the tax and title reports for folks too?

We do it in six counties. We will do the whole county for a price, and then we also have a website called RoddyTitle.com if you need a title report done on a tax lien or another property. I would like to point out too that 4Closure.info is for Texas but the Prophawk site is national. If you want to get probate leads in Florida, they are there. If you want to get distress leads in Florida or Tennessee, it’s there as well.

David asked, “If you win a sale and don’t have the money to pay time. What happens?” He already answered that. It goes back up for sale again. Is there a stipulation that you can’t owe any taxes in the county too?

At the tax sale, there is but at the trustee sale. There’s not. The county has to be above a certain number of people. Waco and McLennan County hit that. When you go to buy tax foreclosures at the tax sale, you need to go preferably at least a week before, maybe three business days before, and go to the county. You have to get a certificate that says, “You do not owe taxes.” With the foreclosure market, you don’t. I don’t even think you have to be a US citizen to buy it from the foreclosure market. They just take money. That’s another question people ask us. “I’m a foreign national. Can I buy?” Yes, it seems like it.

NC4 43 | Foreclosure Markets

Foreclosure Markets: You don’t even have to be a US citizen to buy in the foreclosure market. They just take money.


It doesn’t matter as long as you’ve got the cash. “Cash plays,” as they say. Are you guys sticking in Texas or looking to any other states out there?

The way we do things is very labor intensive. We are going through every record. We have looked at two different states, which are Georgia and Colorado, to expand to the next. We’ve always talked about it, it’s coming up soon but it hasn’t come up yet.

Prophawk.com is a national skip tracing service, and that’s nationwide. If you don’t have the money, do you get banned from bidding at the foreclosure auction in the future or not?

You do. Some trustees are very strict about it. They will put you on a big-time ban. Some of them may be lifetime bans if they don’t like you. It’s up to their discretion. Some of them will say, “You can’t bid for the rest of the day.” Some, “You can’t bid for the next three months,” but it’s that trustee, so keep it in mind. Another trustee will walk up. It is a waste of everyone’s time if you don’t have the cash to do it, so don’t do it.

Every state is a little bit different. In some, you only need to bring 10%, and in other states like North Carolina, they give you a different opportunity to bid or counter back in versus the one day. If you are not investing in Texas, be careful and always research what’s going on in that state, specifically that county. It’s worth it to talk to somebody who has been on foreclosures in that state or that county.

Let’s recap, especially where the opportunities are here. How can we make money with the foreclosure list? There are two ways to buy property. I also want to talk about notes too but one is on the market and one’s off the market. On market properties, the MLS Multiple Listing Service and you need a real estate agent or not but everyone can see the property and you are going to pay what’s called market price for the property.

There’s the off-market property. There are hundreds of different leads for off-market properties. There’s water shutoff or nonpayment, recently incarcerated, city ordinance liens where the grass is too high or probate leads, and all kinds of stuff that’s off-market where you have to make an offer. I worked for HomeVestors for a number of years as a buyer for a couple of different franchisees, and going to talk to homeowners, the number one motivator in my experience is time.

I’ve talked to a woman whose son called us to go out and talk to her. She’s got holes in a roof where a bunch of cats are living. You walk through her house, it’s so sad. You can barely find a place to put your foot that’s not covered in feces. You are walking through her property and talking to her. She was totally fine or cool with it. She wasn’t going to sell in a million years. This is her living the way that she thought she wanted to live. We made an offer. It was completely rejected because she didn’t even want to sell.

You can go to a beautiful house in a nice neighborhood. They are not all beautiful. If they have to sell because they are moving and going to have two mortgages or have a timeline that needs to come up. For example, they are in foreclosure and going to lose their home if they don’t sell it is a bigger motivation than the condition of the house.

This is why we say, “These tax foreclosure leads and these pre-foreclosure lists or the post-bankruptcy list that they usually end up in foreclosure in six months or so because they are losing their bankruptcy protection that’s an early indicator.” Time is a much bigger motivator than the condition of the property. That’s why we are saying there’s an opportunity to buy at the auction or beforehand.

I’m interested to hear more about the notes. You find a local lender who is foreclosing on a property, and you call them up. It’s like when I would knock on a door, and I wouldn’t necessarily say, “Do you want to sell your house?” I’m also a real estate agent, so sometimes I ask other questions like, “Do you know anybody in the neighborhood who might sell?” As I walk away, you do the Colombo return. You are like, “I almost forgot. Do you want to sell your house?” Is that what you are doing when you are calling the notes? Are you saying, “Do you have any other notes?” and bringing up the note that’s in foreclosure?

The special assets manager or the secondary market manager, the banks have four different job titles for people that handle distressed debt sales, special assets or secondary marketing are your larger firms. Your chief credit risk offer is going to be for like smaller banks or regional banks. Whole loan trader if it’s like an insurance company or REIT out there.

I can jump on LinkedIn and type in, “Bayview servicing special asset manager. “It will pop up a person on LinkedIn, and I will reach them to them. If I can find their email or pick up, call Bayview Loan Service, ask for this individual, and say, “I saw that you are foreclosing on these four properties in Harris County in September. Are you interested in selling the debt off? If not, would you be interested in selling any other loans that are in longer foreclosure states?”

I use the address on here, the borrower information. If we have an email address, that’s what we put in our attention, September 6th foreclosure address borrower, and then we inquire, “Would you sell the note?” A lot of them will come back within seven days. They were like, “No, we are going to finish the foreclosure but if you want to make a bid, we will accept that bid as an REO if it doesn’t sell at auction.” The whole goal, though, is to get their full list.

One bank, especially if they are lending in a variety of states, will get a list with all their distressed assets that I can cherry-pick from. They may not be going to auction this month. It may be another 30, 60, 90, or 120 days or longer before they can foreclose, but now, the bank is motivated to sell that debt off because I’m a buyer, and I can pick it up usually cheaper than I would pay retail for it.

I then can reach back out to the borrower and say, “You haven’t paid in six months. I’m now your new bank. Do you want to stay or do you want to go? Let’s do a deed in lieu if you want to go or I can give you Cash for Keys. I’m out of the bank since I bought that note. I still have the right to foreclose if they won’t play ball, and then I can sell it at the auction if I need to.

Are you only doing 1st or are you looking at 2nds as well?

I’m only doing the firsts. Occasionally, we will buy a second if it’s behind my first lien in the title. I will offer a second $1,500 to go away. I won’t give more than $1,500 because that’s what it costs my attorney to go out of state $1,500. That’s a great thing to look at. We invest nationwide but I use foreclosure lists. I can put this to find those smaller regional banks that have stuff on their books. If they have one in one county, they are probably going to have stuff in other counties across the country as well. Does that make sense?

We talked about foreclosures increasing, and as somebody who is helping people buy houses on the courthouse steps, that’s a great opportunity. Is it equal in notes? Is it worse now in notes? How does that change things with the note’s world?

We see more. If we get one bank, it’s not just one distressed borrower. It’s multiple borrowers. Our leads aren’t chasing after the borrower who might have one property, and it’s all they have. The banks will usually have hundreds. Sometimes thousands every quarter that now if I’m on their buyer’s list, I get that list every month that these deals are potentially 6 to 12 months ahead before hitting the foreclosure auction.

Sometimes we call the borrowers, and we are the only person that’s seen it. It hasn’t even shown up as list penance or noticed the default or the appointment of substitute trustee hasn’t been filed yet because the banks have this huge list, and each state’s different in the foreclosure timeframes. It’s faster in Texas and Georgia but it could take you 13 months to foreclose in Florida and 90 days in Missouri, and 1 year to foreclose in Alabama.

We get these different lists, and the longer it takes to foreclose, the bigger discount we end up getting a lot of time. Our goal is to work it out with a borrower to keep them on, so it never goes to foreclosure but if they don’t play ball, since we buy that debt and now become the bank, we still have the same foreclosure rights.

This is Note Camp, and I know we are talking about buying properties but I’m interested in what you guys do.

That’s the thing. I love your service because it’s a phenomenal hot list. Hakeem said, “There’s a nugget.” We’ve got a student of mine that has a note going to foreclosure in Harris County on September 6th. We bought the note on it. The borrower didn’t want to play ball. He’s going to deed it over to us. We are going to foreclose because they are upside down. We offered him Cash for Keys to walk away on stuff like that.

We bought the note at $0.50 of value. We got often get a lot better deals by buying that debt and then taking on the legal aspect of things having to foreclose. We are not usually paying above 65% of the value. If it’s in Texas, if it’s in a good spot but most of the states, we are buying at $0.40, $0.50, maybe $0.60 of value, depending on what the debt is owed.

Here are the numbers they taught us at HomeVestors. They send out a bunch of letters and say 20 people respond, and about 8 of those people invite you over to see the house, and of that, you will make about 3 or 5 offers. I offered everything, even if it was low. Out of that, one person will sell. Of those people that sell, 1 will do it at the house, and then 2 out of 3 of those will do it in follow-up. Out of every 20 calls you get, you should be buying 1 house and maybe even a little bit better in some markets. What are the numbers with notes? How many of these people do you have to contact roughly until you get a deal? Do you know? Is it similar to buying houses or is it better?

If we are calling asset managers and we make 50 phone calls or reach outs, you will probably talk somewhere between 12 to 15 and will be speaking to the asset managers of some sort. Maybe it’s a little bit higher one day. Maybe it will be a little less. We don’t call the last week of the month because it’s always a rough time for them pulling numbers.

Out of those 15, you will probably end up signing 4 NDAs or Non-Disclosure Agreements or getting on their list. Out of that list of those 4 NDAs, you will get 1 list. That 1 list may be 1 note or 900 notes. Jessica, one of my students, reached out to an asset manager and the asset manager sent 102 that she could cherry-pick and that she made 20 offers on, and we are waiting to see what we get accepted on that stuff.

The beautiful thing is that it’s contacting the asset managers’ bank as long as you are following up with them in a lot of cases. They send you stuff on a regular basis, that’s all across the country. There are states like New York and New Jersey that we avoid. GetSet is going to send me a list every month of anywhere from 10 to 50 notes that I can cherry-pick from. SN Servicing is going to send out probably twenty notes every week that I could take a look at. These funds and banks all have stuff.

Since our market is bigger than, say, Travis County, I’m looking at notes in 30 states. I have a lot more opportunities to take a look at stuff that I don’t have to bid so high. I can make sure and stick my number. The goal is to target occupied assets. I don’t end up with the property. I can try to get the person to modify in reinstating so I don’t pay any foreclosure costs or repair costs and keep them in.

I then hold that note for twelve months, and then I can get it reperforming and sell it back to Wall Street. If I bought the note at $0.50, I could sell it back to Wall Street at $0.80 or $0.85 of the value. If the borrower doesn’t play ball, then I will foreclose and sell it at the auction because I know the bank could foreclose it.

It’s an area that I haven’t gone into much. There’s another area too. Some people are doing well on, and that is another way that people make money with this list. I don’t know about it too much but it’s called chasing overages. For example, if a home is owed $80,000 and it sells at foreclosure and gets bid up to $120,000, there’s an overage there of $40,000. People buy our struck-off list or result lists. They use their attorneys to try to get between the homeowner and the bank, get those funds to them, and take a pretty large cut.

People do that with taxes. I don’t know how you would do it with taxes because we don’t know the actual sale amount. We don’t go to the tax foreclosure auctions but it is something that is done nationally. There is a small segment of our subscribers that do get it for that. I read one of your note episode when I was going to come on here.

That’s our tax overage. It works the same thing. There are times that we have bid up a tax auction because it had a troubling title issue that we couldn’t foreclose on. We waited until the county was foreclosing in taxes. We bought the note for $10,000, and we knew the prop wasn’t worth $100,000 but it’s not clean collateral follow that we didn’t foreclose on. We wait for taxes to come up. Three years of taxes are $10,000. Auctions are going what $0.70, $0.80 or $0.90 on the dollar in a lot of cases.

Let’s say the house is worth $100,000. If they bid at $0.85 and only $10,000 is owed to the first lien, that means that $0.75 would go to subsequent lien holders. If I only paid $10,000 for the note at that point, then I will do the other $0.75 as long as that’s what’s owed. We use tax sales on cases to speed up a foreclosure in some cases to get a tax without having to foreclose.

There’s also another thing, and I’m glad you brought this up a lot of these big banks don’t track sales and a lot of funds out there don’t track their tax. You look online. You see that the property has been lost at tax sale. It’s no longer the same owner. We will call the county and say, “Is there an overage sitting out there?”

“There’s a tax sale on September 6th, and I saw that $5,000 was owed but how much it sold for.” “It’s sold for $50,000.” “There’s $45,000 in an overage sitting there waiting for somebody to claim it.” We will go back to the bank and say, “This note over here lost a tax sale. We will give you $1,000 or $2,000 for it knowing that there’s $45,000 sitting in the county waiting for the mortgage bank to claim it. We do that a lot with a lot of these big pools that we see in from different funds. We look at the taxes owed and see if things are changed and if there have been any tax sales or any overages.

The bank is willing to sell you a note because they think that it’s a total loss.

It gets gone.

Can they redeem it from their position?

Not in every state. Sometimes, it depends on the redemption period. Minnesota and Alabama have a one-year redemption right. That’s good in some cases. Markita, “How do I get a list of the overages?” You don’t get a list of the overages nationwide. You have to call and check, “What did it sell for?” Call the county and say, “On this tax sale, what was the winning bid? Is there any overage out there?” It’s a little bit more intensive process. Each county is different.

This is for mortgage foreclosures, not for tax foreclosures. We do have seventeen counties. It’s about $70 or $80 a month per county if you want to order that list but it will tell you the opening bid, tax value, estimated balance of the loan, and the closing bid. Either the opening bid or the estimated balance of the loan, somewhere in there, is roughly what was owed. You can tell pretty quickly if there should be an overage. Again, that’s not free. You have to subscribe to that.

David asked the question, “The overage money is in the hands of the county clerk, and only the owner of the note can claim the overage?” In most states, the lien holders can claim it. In some states like Indiana, it’s either the first to claim. If the homeowner claims it before the mortgage company does, the owner gets it. Indiana has got a weird law. Each state’s a little bit different. You want to research what’s going on in those specific states.

Each state got weird laws.

Demetri asked, “The name on the list penance is usually a person that owed the funds, and it depends on the state?” List penance is a judicial state. Demetri is in God’s waiting room in Florida. It’s good stuff there. You’ve never heard that before.

I think I have.

It’s like Williamson County. We used to call that God’s waiting room in Texas because it was all Sun City and retirees for the most part.

What a development, somebody had a vision there.

Jack, thank you so much for coming and sharing some good stuff. If you are in Texas, it’s worth going out there and signing up for the list, especially if you are in Harris County. There are so many great tools and leads. You can work those leads from both sides, the property side and the note side. That’s a great thing. You are targeting the borrower and getting them on track. If they won’t get on track or sell you the property, you can target the banks to try to buy the debt and go from there. I love it. That’s why we had you on. It’s such a great tool. Once again, Jack, thanks so much for taking the time of your busy time.

No problem. It is a great time. The list came out for the next auction. We should also have some early postings for October 2022. If you are somebody who wants to go after leads early, we should have some leads for October in most counties.

Thanks, Jack. Have a great day. We got to get together for a beer sometime when I’m up there next.

I’m going to the Travis County auction, so I will be in your neck of the woods.

I’m in town. I will make sure I will meet you there. I will bring the beer. They may not like that at the county.

We don’t like beer. They will be hot, though.

Thanks. Have a great day, Jack.

Thanks. You too.


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About Jack Zagunis

NC4 43 | Foreclosure MarketsJack Zagunis works with Foreclosure Listing Service (Roddy List) which provides different foreclosure lists to investors on all of the counties across Texas. Scott Carson and Jack discuss the different lead sources and deal potential for investors who use their services.







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