So off to Auckland I went trying to be as positive as I could in light of the findings I had made.
The first morning was pretty random and when I questioned Phil about this he told me it was just an overview and we'd get to the real how to stuff later on - ok, so far I v'e paid approx $750 to hear what they told us at the presentation over again!
The workbooks we were given to use with examples and screen shots of the powerpoint presentation were very ordinary and some you could not even read so were pretty pointless. The manual that we got to take home however does have some good info in it and steps you through the process. Gives you lots of details about the various states laws pertaining to tax liens and deeds.
In the afternnon they started plugging the support you would get.....that you needed to pay extra for..... The Magic Jack to enable you to call the States for free, buy one here for $69.95 US of course because this is an American business and we bought a whole lot so got them at a good price...I looked up and found them available on line for US$39.95 plus $10 postage so still cheaper!
Then the LLC - which was hastily gone over, this included the fact that Nevada was the best place to set up as you did not pay State tax in Nevada, well a little research on the internet overnight enlightened me that you do still pay state tax if you buy out of the state and when I questioned this the next day I got told that oh yes but as overseas investors we had a different set of rules apply....I seriously doubt it... you buy a Nevada Company you play by Nevada rules!! It gets better if you buy one of these companies through Phil you only have 48 hours to change your mind..hardly enough time to get home talk to your own accountant and get a second opinion,... this is pretty rich coming from people who constantly tell you to do your due dilligence. I'd say they were trying real hard for you not toso you would sign up there and then! This also is where the Gilligan Rowe accountants and 4 other big accounting firms in NZ concurred that Phil Jone's company set up was not the best way to do your business and you could be in for some expensive compliance costs.
After the completion of the first day I still did not have a clue how to go off and actually buy a lien, I had no idea how to pick a good one from a bad one. So was pretty despondant but resided to hanging in there as they were offering the opportunity for all participants to win one of 3 liens/deeds that they were going to give away and maybe tomorrow we would actually learn about the nuts and bolts.
So day 2 starts off with a big spiel about why you should spend US$15,000 to do a stint with Tommy in the States to really learn how to do this business. At every opportunity throughout the rest of the day they went back to promoting this. Now another chunk of my investment in this seminar is used up on an infomercial of sorts! We did then get onto an actual example of how to buy a lien which was whizzed through very quickly and when one gentleman in the audience asked if we could go over another we were told we did not have time....but they promised we would know how to buy a tax lien by the end of the seminar. Plus there was plenty of time to blow on about why we should fork out another US$15k, buy an LLC from them and the support packages !
Now guess what if you wanted a chance to win one of the prizes you had to buy one of the packages they were selling. Now this was where it was actually funny, one of the liens/deeds (sorry I cant remember which) was for 10 acres in Utah - sounds good eh......well it was 10 acres of desert, with the closest power pole about 1 mile away, and the nearest store was one of those shanty sheds you see on the movies with a petrol bowser and so unkept looking that it looks shut already. The closest city was Salt Lake City, just over 2 hours away! Unless there's an oil field under that there sand or cactus milk develops some life enhancing elixar then I'd say, the poor person that won that for spending $15k just got a lemon or should I say a cactus! One of the other people that won a deed/lien ( I wish I had written them all down) when I asked what she had won did not have the certificate and did not have a clue just what she got either!
We did do some exercises where we pretended to buy houses via tax deeds, which were all very similar. This was actually quite good and we started to actually learn something but we did not do enough or get any hands on experience to really get a good feel for what we were doing.
There was also lots of info on getting agents, getting rid of bad tenants, getting legal and accounting assistance and it all was made to sound very easy. Again I have done some further research on the net and found a few articles by people who have actually gone to the States and found this not to be the case.
The other topic that came up were overbids and Tommy proudly stated that of all the other people that were tax lien/deed educators he knew of no one who taught how to do these, well maybe they have some moral conscious and that's why they don't. In some states they have an Overbid system. This is when there is an opening bid (being the amount of the debt owed to cover the outstanding taxes) and then people at the auction bid for that property and often pay well in excess of the opening bid. Often this can be 10's of thousands more. This is still worth their while as if the delinquent tax payer does not pay their taxes within the redemption period they still will get a property well below its market value. Assuming the owner of the property does not pay thier taxes then the difference between the opening bid and the closing bid (known as the overbid) is available for the owner or anyone who has the collection rights to claim this amount from the county within a certain period of time. Now what Tommy does is after the auction he looks up and finds these big overbids, goes to the owners house and says how sorry he is and how awful the county are, and he may be able to help them get some of the money back and all he wants is a 20% cut for his services. He then gets them to sign a form from the county that says he can collect their money on their behalf. He then trots off and within a matter of hours has the money. They actually think he is wonderful when he has just ripped them off because they did not know they could have gone and done this themselves! He told us about a story where he made $70k by doing this and I quote he "was laughing all the way to the bank". Preying on peoples lack of knowledge is a wrought, fair enough charge a small commission say 5 - 10% max but 20% or more is just a rip off. Apparently there are people in the States charging 40 - 50% so that makes Tommy look like an angel! Anyway if any kiwi investors prey on innocent Americans who have already lost their homes I will be embarrassed to say I am a kiwi too and I am going to do my best to stop this from happening by setting up a website www.overbids.org to educate and warn people of this practise. I just could not believe they were teaching us to be out and out scammers.
I mentioned in my previous blog that I would outline what was said in the first presentation(the online video, Smash the Recession, hosted at richmastery's website) that was not the same as the one I attended in Hamilton. Here are the main points:
- At the presentation I attended we were given no time for questions before the sell for the 2 day seminar was made
- We had 24 hours to change our mind - the first time they had 3 days (far more fair)
- No online support - compared to 100% online support(Platinum level) - just email us
- No forum support - Phil said there would be forum support for all those who did the training
I will post another blog shortly outlining what I think they could have done better and what I think you should do if you are interested in learning about tax liens and deeds.
0 comments:
Post a Comment