- 05:19-07:22 – What a tax lien is and how can investors purchase them in different states like Arizona and Texas
- 09:49-10:35 – How Cynthia started Tax Lien Mastermind 6 years ago and the support it provides
- 10:35-12:57 – $90k profit example of a tax lien deal Cynthia facilitate
- 18:24-21:16 – Using 1031 exchanges to defer capital gains taxes on investment properties
- 15:08-15:1 – Websites to find tax lien sales online: realauction.com and parcelfair.com
- 24:48-25:15 – Connect with Cynthia Spurlin through her websites and Facebook groups to learn more
- Website: https://www.cynthiaspirlin.com/
- Facebook: https://www.facebook.com/MagnetizeYourIdealClients
- Contact Number: 843-619-3005
- Email: corwyn@corwynmelette.com
- Instagram: https://www.instagram.com/exitstrategiesradioshow/
- FB Page: https://www.facebook.com/exitstrategiessc/
- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
- Website: https://www.exitstrategiesradioshow.com
- Linkedin: https://www.linkedin.com/in/cmelette/
ROBYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative. Exit Realty’s revolutionary compensation model, training, and technology that provides you with the tools you need to start and build your successful real estate career. Call me today, Robyn Collins, R – O – B – Y – N Collins with Red Robin Homes at 843-557-5003. Again, that’s 843-557-5003 or visit us at redrobinhomes.com/joinexit and make your exit today
CORWYN:
Good morning, good morning and great morning guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host Corwyn J Melette. Broker and owner of Exit Realty Lowcountry group in beautiful North Charleston, South Carolina. So hey, look, if you listen a little bit further away, we also are partner and Exit Realty New Horizons in Columbia, South Carolina. So you got us here, but you got us there. And we are coming to somewhere closer to you as well. So guys, I’m super excited today. Because y’all know the mission here at this show. I know we do. Y’all know, the guests, the caliber, the conversations, the things that we’ve been doing here. And you know what our mission is, our mission is very simple. That is to empower our community through financial literacy, and real estate education. And guys, today, I think you gotta get your pen, I need to get a paper, I need y’all to be prepared to have your mind completely blown. So put one hand on top of your head, and hold the pen and the other one and keep it all together. Because we want to blow your mind today. And I’m super excited to have with us. I’m almost speechless over here. Because like literally, I’m talking about we got to build the platinum row, not yellow bricks, we’re gonna use platinum because we’re gonna lay this thing out for you today, we got an amazing guest, who deserves nothing less than the best because she’s about to deliver some mind blowing information for you. And that is none other than Cynthia Spirlin as she is the founder started with me. Tax Lien Mastermind, Cynthia, how you doing today?
CYNTHIA:
I am doing great. And I’m so glad to be here to spread the word about the benefits of tax lien investing for everybody.
CORWYN:
Well, I’m super excited. So this is one of them shows that I’ve been waiting on when I caught the–. So we need to talk to you right there. Because people have questions about us. But if you don’t mind before we get too far into the trenches, if you will, in the weeds. If you could introduce yourself, tell our listeners a little bit about you, who you are, what is you do? And then we’ll go from there.
CYNTHIA:
Sure, well, my name is Cynthia’s Spirlin, like you said, and I am from sunny Southern California. And I’ve been interested in real estate since I was a teenager, my parents were really fortunate to have the opportunity to buy commercial property as a seller finance. So I saw my first creative deal when I was 13. And that just kicked everything off from there. And I said, Let’s do this again. My dad said no, I don’t like being a landlord. I said, Well, when I grew up, I’m going to do this at least 10 times. But my parents believed in education. They were from the south Texas and Louisiana. So education was the foundation of everything. And I love to read so they always encouraged me to do well in school. So I graduated from USC, I worked for the government department of defense and contracts. Then I went to law school, I got the highest grade in contract law and 500 students love that. But still, the real estate was always in the back of my mind. So I eventually got into creative real estate doing Pre Foreclosure investing. And it was so much fun. I really loved it. And it just opened so many doors. What I love about real estate is relationships. So that’s been the kind of the underlying thread through all the success has been through, the relationships. But eventually when the crash came, I thought there has to be a safer way. I didn’t foresee the crash and my dad. He was born in the Depression time. There’re seasons to this whole wealth thing. So I said, Okay, well, I still want a safe way to invest. I just need to find a safer way to invest. And so that’s when I found tax lien investing, and I started asking for People do you know anything about this? And they all said no. And that’s why I started tax lien mastermind. And I’ve been doing it for about six years now. And I just love it.
CORWYN:
So tax liens for the layperson, who has no idea what is a tax lien sale or purchase? What is that?
CYNTHIA:
Sure, one of the ways that county covers the expense of the fire department, police department, that things that they need to run the county, and the budget for the EMS staff, to run the county in different ways, is through the payment of property taxes. So if someone doesn’t pay their property taxes, they need to have a way to recover that money. So they started a tax sale. And so there’s two types of tax sales, either a tax lien or tax deed. And the tax lien is a way to encourage investors to our business people to help with this shortfall in the budget by buying the lien that is on the property. So that goes to auction for the starting bid of what’s owed. So for example, a property could be worth $100,000, but the taxes owed is $1,000. So it will be starting bid at $1,000. Now once the tax lien is purchase, then the homeowner has a chance to recover that. And the incentive for the investor to put those funds down, the $1,000 In this case, will be a high rate of return. For example, in Arizona 16% is a return, you don’t get those kinds of numbers at the bank, or in a mutual fund or CD, right 16%. On the other hand, like for example, in Texas, they have a tax deed. So in Texas, you actually bid on the property. So the past due amount could be $40,000, on half a million dollar house, for example. So you bids up from there and the closing bid, the winning bid could be $80,000. So you’re able to buy a home for a fraction of what it’s worth the county’s not concerned about the value– of the market value. So it’s a windfall for the investor or the buyer, someone could just go instead of buying a home the traditional route, if they have some hiccups that prevent them from buying a home, and that on the retail market, they can buy a home or second home vacation home using tax sales.
CORWYN:
So the interject a if you will a disclaimer for those who are local to South Carolina guys, look, we are lien versus deed that pay so when you have properties that quote unquote, sell for taxes, there’s a year and a day redemption period. So you know, you buy. you pay the taxes, you have a tax lien, and when that’s paid, or if it’s paid, then you get your money and interest. But outside of that, if it doesn’t, at the year and the day market. Day markett after the year, that’s when the the county will issue you what is referred to as a sheriff’s deed, or tax sale deed, and then you technically own the property from there, even though you may have to go back and clear up title issues. So I want to make a plug in. So this is become your niche. So for a moment about the mastermind, how big is the group and what kind of information you guys share there?
CYNTHIA:
Well, what I found is really important is that the question I was asking wasn’t the best question. Have you heard of tax lien investing? Most people hadn’t. So I’ve started discovering that really wasn’t the issue, once it’s the principle of buying tax liens or tax deeds is pretty straightforward. But people need support and accountability in a community to continue to have the confidence to invest. And so that’s why the tax lien mastermind is so important. Plus, people come from different backgrounds, there’s pilots, engineers, nurses, various real estate professionals, mortgage, property managers. So when everyone comes together, and they buy tax liens in the community, then you can get someone else’s knowledge and viewpoint. Or for example, like you have knowledge of South Carolina. And so there’s someone in California might be looking at a tax lien there. And they’d say, Corwyn, can you tell me about this area? And you could say sure, I know all about it. And it’d be really helpful to them to have that information. We have members from different parts of the country, Florida. And so that’s helpful when we go on field trips. So before COVID, they weren’t online like they are now and they’re not all online now but it’s more than ever before. So we would drive about 90 minutes from Las Vegas to Kingman and buy tax liens and so that’s what’s really helpful, the camaraderie, having fun together being a likeminded community. That’s really the big part of what I do with tax lien mastermind.
CORWYN:
That was the first look where your skull kind of raise up a little bit, because your mind is being blown right there. So you’ve been investing in tax liens. Now you’ve started a mastermind about six years ago. So not mad, it’s just says it thereafter, shortly thereafter, in that season, if you will, is when you kind of began on this path. Tax liens be buying different states is also what I heard, but give our listeners like, and I know that this isn’t like a one size fits all. So disclaimer for our listeners, guys, look, your results may be different, but give us– Cynthia, lay out a deal for us that you may have done fairly recently want to get better ones or maybe want to even one of your worst ones?
CYNTHIA:
Yeah, well, I think one of the benefits of being in the group as you can learn from other people’s experience. And so that saves you a lot of accelerates the learning curve for you. So for example, there was a case where if you just went to the class, and you say, Okay, well, the tax liens are ABC do these things step by step, and you will be in a position safely with due diligence to buy the tax lien. But going into the community side of it, we were looking at over the counter liens. And then beyond that, another layer that people don’t often talk about is secondary liens. So another investor had a tax lien already. And what didn’t want it was a lien about to become a deed because the redemption period had expired, the homeowner had not paid the taxes. So the next step was to go into ownership. And so he didn’t want to do that part. So he sold the tax lien for $7,500. And the homeowners, or the well they were heirs, two sons were living in the property they inherited from their parents, and they didn’t want to pay the taxes, can you imagine nothing was wrong with the home at all, they were just derelict, so pay them $2,500 to move out of the property. Now, you’re invested about $10,000, after the legal process was completed, the ownership changed. And now the tenants are out of there, the past homeowners are out. And now the property is valued at $70,000. And it’s rentable immediately. And so $1,000 a month, rented the property. And then after three years, the property’s increased in value to 100,000. And there you go $10,000 money in the interim, original money returned, and a profit of at least $90,000. That’s what’s possible with the tax lien now take that money and buy more tax liens, right? It’s not out of your pocket, it’s not out of your retirement. It’s money that you’ve made through the process. So there’s three types of liens when you are, it’s the over the counter, secondary, and then the ones at the sale at the time of the auction.
CORWYN:
Wow. I’m one of these people, I start to see the numbers, like literally just what you can do how you can maneuver this around, and reposition it and start to diversify and get into other types of properties as well. I just start seeing this. So you have an extensive amount of experience. You’ve touched other genres, if you will, you’ve done 1031s and other fix and flips. But this here allows you because and correct me if I’m wrong, Cynthia, but this allows you to really be a remote investor. You can. So you buy properties all over the country. Correct.
CYNTHIA:
Right. So you can go for example, there’s a couple of websites, your listeners might want to look into realauction.com. And realauction.com is a platform that sells foreclosures properties as well as tax sale properties. And so they’ll list them for different counties across the country. Arizona uses that platform to sell some of the counties to sell through online that way. Colorado does Florida. Oh my goodness, Florida is on there. All so many counties in Florida are there. So quite a few you could buy a tax lien in the middle of the night. If say, for example, on Saturday, in the evening, everything’s quiet and you say you know what, I’m going to take a couple hours, do some research, due diligence, and I’m gonna buy a tax lien. It’s the end of the month. Yeah, I’m going to make some money, invest some money this way. And the other website I would recommend is parcelfair.com It’s spelled like a parcel of land. P-A-R-C-E-L fair.com. And they have they started with just Alabama. It was an investor in tax liens and Alabama has a very difficult system to maneuver through to actually buy a tax lien. So for himself and his friends. He decided to create something for everyone to have a better experience. And then he added Ecotile and other Arizona’s on there and a number of other states participate in parcelfair. And again 24/7. You can go on and buy tax liens there. Check those out.
CORWYN:
That is priceless. So middle of the night. I can’t sleep.
CYNTHIA:
Yeah, it’ll get rid of your insomnia!
CORWYN:
Honestly, it might increase it. Wait a minute. Oh, that was a–. So one of the things that really focused on this show is giving people exposure to methods of active investing, passive investing, and just the beginning of getting into homeownership, whatever that may look like, because everybody’s journey is different. And this really and truly is, to an extent, it’s almost passive, because you spend time on the front end, to make the acquisition. So you do the research, what have I got this much that I can invest , bid on the property, if I win the bid, it was a lien, all I do is wait, I get my money back in interest. It’s far better than what I’m getting at the bank. Yeah, and that money may come back a whole lot faster, because there’s a lien, and somebody pays lien in 30 days, or 40 days or three months, whatever that means. Now you’ve got money back faster, with a little bit of return that you can then go back and reinvest again, and you can recycle it possibly a little bit faster. That’s a little bit but it’s not as active as an of investment. And it’s also to be very transparent. And Cynthia, please correct me if I’m wrong, but be very transparent. It’s a much lower barrier to entry, you ain’t gotta go qualify for financing. Yeah, got a few $1,000 in the bank, you can get started like, today.
CYNTHIA:
Exactly. So that’s what I encourage people to do is to, instead of leaving the money safe in the bank, it’s safe in your bank. So say, for example, the property, it’s on Main Street, it’s in the bank of you on Main Street. And so another example is that a lot of banks invest in tax liens and tax deeds. So they’re taking the money you have on deposit. And they’re using that to enjoy 16%, 12% interest. So you can be with a little knowledge, this, do the same thing for yourself, and make the end leave out the middleman. The other ideas that if you do have issues with your income not being what you need it to be, because now inflation and different things are making the dollar go not stretches far. So savings is not an option for a lot of people. They’re just barely keeping up each month with their expenses and cost of living. So if you have a small amount of money, you can invest and over time, save money to buy the property of your dreams. So for example, we went on a field trip, one of the members, she’s a pharmacist, she had a budget of $1,000, she bought three liens. One was redeemed, the other two were not. They were both about 300$ to $350 liens. They were not redeemed, and they were both worth $15,000. So imagine, it was a three year process because the redemption period in Arizona is three years. But three years later, the time passes anyway, that $30,000 can be used to buy additional tax liens, or it can be used as a down payment on a house.
CORWYN:
Yeah, so you started diversify, do different things reinvest or reallocate? Where you look at it, or you clean the deeds up and
hold on to the property
CYNTHIA:
And then over time, you could do a 1031. If you accumulate property, and you don’t want to be in that place anymore, then you defer the capital gains tax, and buy and move all that money into one account, and then use that to buy where you would prefer to invest your property.
CORWYN:
So it’s been a little while. So Cynthia, give us that the 1031 stock exchange 1031. For our listeners, guys, RS code 1031 allows you to defer capital gains. So Cynthia, lay that out for us.
CYNTHIA:
Well, it’s so significant advantage. And that’s why the tax code, like tax liens and tax deeds, the federal tax code 1031. And there’s others code sections that allow you to save so much money. But this is one that many people don’t know about. And it’s so vital because even my parents almost became at the mercy of 1031. They were thinking of selling a property. And they had this property since just say 1980. So it it accumulate a lot of value over $500,000 in accumulated value, for example. So if they have the federal tax, as well as state tax in California, and they would have had to pay about $150,000 of their gain on that property back into access. So the nice thing about using a 1031, you can sell your property, but you’re not allowed to receive any of the proceeds, you use a Qualified Intermediary, and they receive the funds in your stead, again, you have a certain period of time, about 180 days is very strict. But once you miss the date, then you lose opportunity to take full advantage of 1031. But if you follow all the procedures and work closely with your realtor, you’re able to find a replacement property. And then the Qualified Intermediary will send the funds over to the escrow for the purchase of that replacement property. And now you can avoid paying 100,000 or more in capital gains taxes. And then if you continue to hold on to the property, like my parents did, they pass the property. So it’s a great inheritance tool. So they gave us the property my brother and I, and now the taxes of the capital gains are a race forever, and we start accumulating our own gain in the future. But what that 150,000 that they would have rolled up with the sale of the property. It’s null and void, and it kept the property intact, and it’s complete equity.
CORWYN:
And people miss that one, everybody. And most real estate professionals have no idea like when I’m talking to selling property and the plan to buy another investment property, Yeah, whoa, whoa, wait a minute, you want to do what? Well, look, if this was an investment property, you’re going to have a tremendous amount of gains that you’re going to be taxed on. So why not just defer that, let’s just move that money over. Basically, we’re recycling the same money over and over again. And even if you buy rental property, the rental income is not considered as a part of that. So you can take the rental money, you buy another property, you can continue to make money, but you defer the taxes on the sale and capital gains can be stifling at times, as you just mentioned 150,000. Now what the taxes that you guys would have to defer. That’s impressive.
CYNTHIA:
Yeah, it’s important. So when you are an investor, I encourage people to join their local AREIA, Real Estate Investment Association so that they can network with other professionals. And many times at those meetings, they’ll bring in experts to talk about different subjects that impact investors, like the 1031 experts would come and talk about that.
CORWYN:
Awesome, awesome. So Cynthia, look, we have had like a great time today. So I want to get in I refer to this as my mic dcrop question. And it’s that 2020 hindsight, if I had this thing to do all over again, what I would have done sooner or what I would not have done whatever that may be. But if you can look back over the time period, if you didn’t know what you know, today, years ago, what would you on differently than what you’ve done.
CYNTHIA:
Now, I would have started with the tax lien First, I would not even gotten into the pre foreclosure. Because once everyone’s talking about something, that means that that’s not where it’s at. That’s what I’ve learned. So no one’s talking about the tax lien. They don’t want you to know about the tax lien, because it’s the best kept secret in America. So I would fully invest in very affordable homes in the South. My focus is Georgia, Florida, Alabama. And so just tremendous. I’ve met so many people, young people in Birmingham, for example, that they retire in about three years from doing tax liens. That’s how lucrative it is. So I would highly recommend to everyone. The other thing, I would say, if you’re a grandparent, when your grandchild is born, don’t buy them anything but a tax deed or tax lien, every Christmas, that birthdays they need to be buying another one. And letting that property money accumulate. And then when they get old enough, and teach your children and your grandchildren how to do this as well, that would be the best thing, my daughter’s 27. And we talked about tax liens and tax deeds all the time. It doesn’t interest her at all naturally, because mom’s interested in it. So but she still has to know, What good does it do to me to leave these things to her and she has no knowledge of it. So I think that’s really crucial to learn. Whenever you can ways to use the tax code to your advantage and every opportunity you can to buy discounted property and sell it for profit and reinvest by assets, not other consumer items,
CORWYN:
not liabilities. There you go. So Cynthia, how can people reach you? Where can they get in contact with you? Learn about the mastermind connect with you. Tell us where they can get you at?
CYNTHIA:
Oh, sure. Well, the best place to find me is on Facebook. I have a group there that’s open to the public Tax Lien Mastermind, and I have another group called Tax Lien Invest-Her, and that wants to really encourage women to smash and crush the wage gap through tax lien investing. And then of course, my website, cynthiaspirlin.com. My first and last name Cynthia Spirlin .com.
CORWYN:
Awesome. Awesome. So Cynthia, thank you. Thank you for being on the show with us today. Thank you for that wealth of information a couple of times, I had to reach up because I felt my head going back. So I had the whole room to get me. Let me get this back in place on one hallway, blow off over here.
CYNTHIA:
Love that. That imagery. I love the imagery of that.
CORWYN:
So thank you so much for that. Thank you for being if you will part of the Exit Strategies Radio Show Family.
CYNTHIA
My pleasure. Thank you for having me today. I’ve enjoyed every minute.
CORWYN:
You’re welcome. So for our listeners, guys, look. We don’t gave it to you. Now it’s up to you to take the ball and score. We need you to do some way you got to rock but no. So take action. So y’all know how I feel. Y’all know what I say? You always put the two of those things together and I say it to you this way which is I love, I love you, I love you. We gonna see you guys out there in those streets
