How to LEGALLY Buy Houses for $10 & Stop Foreclosures with Coach Pat Martin

In this episode of the Generations of Wealth Podcast, host Derek Dombeck speaks with Pat Martin, a seasoned real estate investor and coach. Pat shares his journey from wrestling and coaching to ministry work and eventually becoming a successful real estate investor specializing in pre-foreclosures and distressed properties. They discuss ethical investing, foreclosure strategies, and how to acquire properties for as little as $10. The conversation also covers controversial real estate practices, including equity stripping, sub-to deals, and the Remick rule, and how to do business the right way with integrity.

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And here we go. Mr. Pat Martin, thank you so much for giving us some time on the Generations Wealth podcast. How are you doing today? Very comfortable, excellent man. And yourself? I am finer than frogs hair, my friend. You and I had a conversation a couple weeks back, and before we were able to get this booked, we actually, I think, have been working on trying to get this this show booked for probably two or three months um scheduling is always a thing but to start with before we get into what i think is going to be an extremely fun conversation uh tell the audience a little bit about your background where you come from and and um and and we’ll we’ll go on from there

Pat Martin’s Background

Absolutely sure sure well in a nutshell people call me coach Pat or CP for short. And that’s because I coach wrestling and also coach. I still play coaching and playing a men’s soccer league. My background is from the wrestling part. I went to this college called Arizona State and I participated on the wrestling team there and, you know, started wrestling when I was in grade school, wrestled all the way through, you know, college and just had a lot of fun with it and and uh with that wrestling background um it really I think it makes a great business entrepreneur because it’s all about discipline and uh going that extra mile and never giving up uh and so that’s where I took that into coaching high school wrestling and but after college at Arizona State I went to uh Bible school uh in Phoenix graduated youth pastor for many years and was on staff with many large churches. One of them was in Dallas, Texas, where Emmett Smith and Deion Sanders attend a church, church of about 30,000 people. And I was the street pastor of the homeless there for almost nine years. And then I told people I got delivered from the commercial church. And my wife and I just felt like when churches get big. It’s all about fame, fortune, and the pursuit of being a Christian celebrity, pastor, bishop, or whatever. And for me, that just didn’t resonate with us anymore. And so we moved back to Florida, started real estate investing 20 some years ago, and haven’t looked back. I’ve been unemployable for since about, I don’t know, 2002, 2003, I guess, 2003. And I love it. I love doing real estate investing. I did my first course called Cash for Keys, how to facilitate a deed and lure foreclosure way back in the day. And I’ve had many courses since then from the art of the BPO to a handful of ones in the pre -foreclosure arena from pre-foreclosure cash cows to pre-foreclosure rental riches. My newest one is called pre-foreclosure exit strategies. And so there’s a half a dozen or more decent exit strategies when it comes to dealing with distressed properties, whether they’re vacant or occupied houses that are facing a foreclosure option are the easiest ones to pick up. So I practice what I preach. Right now, I’m rehabbing a house in Tulsa, Oklahoma. I’m rehabbing a house here in Florida. And it’s search.com. I can also use Facebook, social media, true people search.com is free. Fast people search.com is free. There’s other ones out there. I use paid for services as well to skip trace tough, man. This one is, I’m looking out at the beach. It’s Panama City Beach, brother. And it’s tough. And it’s beautiful, sunny. And anyways, been married for 36 years. Got two great kids. My son’s 32. He helps me in the biz, but he also day trades. And my daughter owns Badass Browse. She’s 25. My kids have been entrepreneurs from the very beginning.

Awesome. Awesome. Awesome intro and bio. And I know so much, again, from when you and I chatted in the past about your passions. And that’s why I was really excited to have you on the show. You talk about a lot of your background is dealing with properties that are in foreclosure, pre-foreclosure, things of that nature. We are actually, and I’ll throw it out there right now, we’ll talk about it more in the future. But we’re going to have a link at thegenerationsofwealth.com/coachpat. And that’s going to get everybody over to what you have to offer in the future. But, and I’ll throw that out there a couple more times during the show. But before we get to, you know, that, let’s talk about something that is just happening in the news right now. And, you know, you deal with foreclosures, I deal with foreclosures, just recently and it’s maybe a little bit of time before you all are hearing this show and maybe we’ll know what’s coming down from this lawsuit but there’s a lawsuit that was filed in Arizona it’s the short version is they’re claiming that you know these these investors slash house flippers are are equity stripping they’re taking advantage of people that are losing their homes to foreclosure and those people are a protected class I mean every state has different laws you need to know what you’re doing, how you’re soliciting them, how you’re marketing to them. But I think the conversation that you and I are going to want to have is, number one, what are they doing wrong? And number two, how do you do it right? And we’re not going to probably throw a lot of names out there unless they’re already public, because you and I are not, you know, we’re not judging anybody, right? Everybody’s guilty until proven innocent, even though we may believe otherwise. But what are your thoughts on this?

Ethical Business Practices and Legal Considerations

Yes, back when you’re dealing with IRS, you are guilty, and then you have to prove your innocence. Yes. You know, Derek, by the way, I forgot, guys, you might, well, hold it, coach, aren’t you married? And yes, I didn’t mention my wife. She is the backbone, been married 36 years to go range. She’s written her own stuff. You know, one of them was called intermittent fasting for optimal aging. She coined that phrase, but she’s a man. She’s a boy. I get to eat drink. I get to drink green stuff every day. And I am. It keeps me healthy. All right. So, you know, man, I am really blessed and I did marry you. OK, so going back to this, guys, Derek, are you an attorney? I am not an attorney, Pat. Thanks for asking. And nor do I give anybody legal advice, tax advice, or hell, any advice.

What about you? Okay. So guys, before Derek and I start talking, we’re not attorneys. We’re just take anything we say as entertainment purposes and educational purposes only. If you hear us say something, guys, if it’ll come from, take it only from the place from, if I were you, this is what I would do. And this is what Derek and I have done. And so we are not condemning anybody. We just want to sake, there’s a right way to do business. And both Derek and I are, hey man, we’re faith-based, we’re Christians, we are followers of Jesus. And so there’s a right way to do business, doing it legally, morally, ethically, and being honest, you don’t have to lie and cut corners. All right, so Derek is talking about the lawsuit that was just filed, and a good friend of mine, Jeff Watson, attorney, many of you people know him, he just published it out there because he published it. He published the brief, and the guy’s name is, and by the way, we are not, I should say, we’re not passing judgment here. We’re just saying the lawsuit has his name in it is Cameron Smith. He’s based out of Scottsdale, Arizona, and by way of Utah. And so Cameron, the attorney general’s office in Arizona, and I read the brief, and this is my summary of it. It’s equity skimming, equity, what did you call it? Stripping.

Equity stripping. Equity stripping. I call it equity skimming. That means he put a system together, and the earmarked homes that were behind in the Phoenix area, and some other areas too, but mainly in the Phoenix area. And the ones that were behind, they earmarked the ones that had a significant amount of equity. They were able to run programs and so forth. It’s not that hard to figure out what market values. Even if you go to Zillarealtor.com, that’s not going to give you a super accurate picture of it. But they can also see what the property is being foreclosed upon, what the amount is. And they can look and find out what that loan amount was on the property. they see homes with $100,000 or $200,000, whatever, a significant amount of equity. So within, Derek, within minutes, they had recruited and trained up, they called them drivers, at least in the lawsuit, in the brief, that’s what it said. And so they had these drivers on call. And within 30 minutes, the brief said that they would have somebody at the door trained to knock on that door and we call it molesting the homeowner pressuring the homeowner and then lying to the homeowner saying i i’m working with your lender they’re lying and but we don’t have to do that guys

So many times they would uh they would just barrage and and harass the homeowner until the homeowner gave up and signed whatever documents. They were also using a power of attorney. And they would use a power of attorney to file bankruptcies. And part of my strategy, guys, I share with homeowners. If they’re in an emergency situation, I don’t tell them what to do. I tell them what I would do if I were them. But by filing a bankruptcy, if my homeowner client files a bankruptcy, they’re doing it. But they also understand that it’s going to damage their credit. Most of my homeowners, all of them say, I don’t care, coach. I want to block this auction so I can figure out an exit strategy to move forward because their credit’s already jacked up. This guy was taking the power of attorney and he, without the homeowner’s knowledge, he was going down to the federal courthouse and filing what’s called an emergency petition bankruptcy application by filling out three forms. The B-101, B-103A, and B-121 form. The B-101 is a voluntary petition for an application, just the application. And that’s all they would do. They do that. They’re not following through with the bankruptcy. They don’t go to the creditors meeting so it gets dismissed. But the moment a voluntary bankruptcy petition, an emergency petition is filed, all credit cards are cut off within 24 hours. So now you got a homeowner, borrower, that doesn’t know what that guy was doing and his team.

Foreclosure Auctions and Legal Considerations

They’re, blocking foreclosure auctions. can an auction be blocked and stayed legally yes can it be done sketchy illegally the wrong way and you’re representing a borrower you are a you become a form preparer and you are doing it without that homeowner’s knowledge yeah it’s wrong it’s illegal even and guys i i’ll share with you never ever ever provide bankruptcy forms don’t don’t print them off and email them to somebody because you think you’re helping them out you’re you are actually practicing law without license by providing those legal forms never fill them out for anybody if there is a if there’s a strategy i share options with my homeowners that that’s an option but i’m not going to tell them to go do it. Never, ever tell a homeowner to do that. If that’s an option they choose to do, because it’s either two or three days out and it’s going to go to auction. He hasn’t hired an attorney. And by the way, I’ll redress here. I just want to tell people, I’m your plan B. Your plan A is you need to go hire an attorney. Your plan A is you need to fix up the problem for yourself and sell it. Your plan A is you need to hire a realtor. Your plan A is you might want to think about doing a short sale. Now you got you got many people out there going through a divorce and in the two parties the husband wife they’re not cooperating with each other and they can’t get a short sale done. So there’s a lot of reasons why they’ll choose us as a plan B. However never pressure a homeowner molest a homeowner to get them to go with you. You let them choose you. You provide options out there and do it morally and resources. Derek, I have a house that I’m picking up this afternoon in Plant City, Florida. Last week, I’m on the phone with a lady. Shouldn’t have any equity in the home. Those are the homes I typically go after. No equity in the home, but she can create her own equity and sell the house and at least break even. She might even put five or ten grand in her pocket. But as the house sits, she can’t sell it for what it’s owed on unless she paints it, cleans it up, landscapes it, and does a bunch of work. So I recommended for her an attorney friend of mine, Andy Lyons, the Lyons law group in the Tampa area, to help her. And he’s big money. I also recommend for her to get some of her friends together and do a weekend cleanup party at the house and prepare the house.

And I said, hey, you think about it, you pray about it. and if we can be a blessing to you by giving you further resources, let us know. She called us up like a week later and says, Coach, man, I don’t want to take the time. I’m a blackjack dealer, and I don’t want to put any money into it. It’s a rental property for me. It was my primary residence. It’s a rental property for me, and I don’t want to be a landlord anymore. I don’t want to clean it up. You take it, and she’s six months behind. That, for me, guys, that is a better approach to doing this business the right way to be a blessing above board and not equity skimming. Not stripping the equity out of the property. In that situation, I will create equity where there was no equity by putting my money into the property. These guys in Arizona, they’re not taking any of their own money to create equity. They’re capturing the property, selling it off, and they’re lying to the homeowner, kicking homeowners out of their house, even hiring an attorney’s entitled companies to evict and eject them out of the properties. And most of the time, they’re like, I don’t want to lose the house. They’re saying, well, you’re not losing it to the foreclosure. We’re keeping a foreclosure off your credit report, and they’re selling that idea. But the reality is they’re taking advantage of the homeowner and stealing their equity in their home. And by the way, had these homes gone to auction, the homeowner, they would have had to move eventually. They might get 30 days, but they’re going to have to move. But when it goes to auction, after all the underlying loans and liens and attorney’s fees are paid off, the overage, of which a good friend of mine, Nick, out in Utah, Nick has the overage syndicate. Nick goes after those overages that are sitting in those escrow accounts and those government accounts and then recovering them on behalf of a homeowner. Most homeowners don’t realize in many states, they’re entitled for anything, any profits left over after the property’s been sold at auction. They’re entitled to that money. Many of the states have it. Not all the states, but most of the states do. So the homeowner would have made a profit even if it went to auction. the trustee sale, a sheriff sale, or the county auction, the foreclosure auction. Guys, it’s typically those three.

Controversies and Ethical Concerns in Sub2 Deals and Tax Foreclosure Overages

Yeah, and not to get sidetracked, but the overage business, I had a former business partner of mine that was working the tax foreclosure overages, and it’s insane the amount of money that sits in these municipalities unclaimed, and when it sits long enough it becomes the the municipality’s money it’s it’s a slush fund and by the way they do not want to give that money up without a fight you you are often having to file lawsuits against the municipality to try and get what’s rightfully owed to the homeowner um and and so well coach as we kind of go on from from the arizona lawsuit i mean just anybody listening to this show you know where where we stand as far as morals and ethics when it comes to business just do it the right way there’s other people out there that are are you know raving fans of of gurus that are selling courses on sub two purchases and and you know assigning sub two contracts where they’re no longer a principal in the transaction and now you’ve got some random person taking on a contract and the homeowner thinks their payments are gonna be made maybe they will maybe they won’t um i i want to hear your opinion on this and and we’re not signaling singling anybody out but uh what do you think about assigning sub two deals. Well i don’t look good in an orange jumpsuit matter of fact i don’t think you look good in one one either man so i’m

i’m too pretty for prison i’ll tell you that right now, yeah oh, man um well um i’ve had some lengthy conversations uh there’s one gentleman out of texas that called me up just a couple weeks ago i’ll keep his name anonymous and he works uh um in the banking industry and he is uh personal friends with VPs in some of the big national banks. And he just told me straight up, this one guru out there, his face is on the wall of FBI officers. There is, Ben, if you Google, pick a few names out there, you Google those names and you’ll find that there is, you know, federal investigations ongoing. You can see it on Google. I won’t say the guy’s name. but when you approach a homeowner and say i’m going to assume your mortgage these are homes that aren’t in pre-foreclosure these are homes that are current 90 i guess all of them are you know 99 of them the bread and butter what this guy does it’s these homes these mortgages are current

negotiates to give a guy maybe like a homeowner like $5,000. So you’ll see them advertised in these subject to Facebook groups, entry fees. $35,000 entry fee. So you got a guy, an acquisition guy that’s managed by the guru. And then you got another guy that finds a real estate investor to buy it sub to with a $35,000 acquisition fee. All right. So I may not have it all dialed in exactly, but the guru, he’s getting paid off and getting down the road and he’s out of the deal. So is one or two of the other guys in the deal. The investor that’s paying the $35,000 or whatever the entry fee is, he thinks he’s buying a property sub two. The homeowner borrower thinks the guru is going to assume his loan. Assuming a loan in the basic knowledge of it is that you’re qualifying and you’re going to do an assumption and qualify for this loan and you’re going to be responsible for making those monthly payments. Well, the guru is like, hey, no, I’m not going to be responsible for nothing. Homeowner’s under a different impression. The sub-two buyer doesn’t, he’s unaware that it’s an assumption buy over here. He thinks it’s a sub-two. So on a sub-two deal, if he makes a mortgage payment or misses one or catches it up, it affects the borrower’s credit. And now the borrower calls up the guru and says, hey, dude, what’s going on? My credit’s taken. He goes, hey, I got nothing to do with the deal. Okay. So you mentioned something too that I was unaware of, and it was something, Derek, about the guy offering some sort of insurance to the homeowner if the mortgage wasn’t paid. Something was going on there.

The Right Way vs. The Wrong Way: Ethics in Subject-To Investing

Yeah, and again, this is rumors, so I’ve not done any research to clarify or verify, but what I’ve heard is there was what he was calling an insurance product. It’s not a chartered insurance product, but essentially saying if the bank called the loan due, you know, the and I I’m assuming he’s charging the investor for this insurance or not the homeowner and saying, OK, you pay X number of dollars. And if the loan gets paid or called due, we’ll pay it off. Well, let’s just put numbers to it. Let’s assume he charges a thousand dollars for this service. And, you know, average loan out there, quarter million dollars. Well, if it ever gets called due, is he really paying it off? Or is he going to come in and say, well, you know, I’ll buy the house. Like, I don’t know what the details are. But the bottom line is, we all know the majority of loans will never get called due. So he’s selling a product that has a very, very small percentage of anybody making a quote unquote claim. And the second part of that is, I mean, if he is calling it insurance and it’s not a registered insurance product, I think that’s another FBI no-no. But again, I’ve only heard about it. It wasn’t worth my time to go look into it. I’m not foolish enough to ever pay somebody like him to buy that insurance product. And here’s my caveat. If you are doing subject to deals personally yourself, and you do not have the ability to pay that loan off if it gets called due or liquidate the property in a very, very timely manner to prevent that homeowner from going through a foreclosure, you should not be doing subject to deals. That’s my belief.

I’m with you. Guys, what Derek was just saying there, my attorney that I pay, I don’t have them on a retainer all the time, but he just said, you know, doing sub-tunes, you can do them the right way and the wrong way. The right way to do them, according to my attorney, again, I’m not the attorney, is you stay in the deal. You stay in the deal until that lender is paid off one way or the other. For me, when I’m dealing in distressed properties, the homes that I’m going after typically are underwater to some degree, upside down. And so my homeowner is happy because when I entered the deal, I’m either bringing the mortgage current or I’m fixing it up and flipping it and paying off as long and keeping a foreclosure from happening. But I never make a promise or guarantee to the homeowner of the likelihood of any success. And don’t do that. If you make guarantees, then you better have a checkbook big enough to cash those checks that your mouth is writing.

Yeah. And the other side, even when I have not maintained ownership of the property, I can buy it subject to sell it on terms and still stay in the middle. And that’s what I do. So if my end user defaults, I’m going to keep making the payment and I’m going to go and take it away from my end user. And so typically I’m doing that through lease options to my end user. So they’re not getting the deed until a future time. But just straight up assigning them, I think is terrible business. I don’t even like the whole business of assigning leases, lease options, you know, sandwich lease options. I’ve never liked them. And it’s essentially the same thing without a change of ownership. But so I’ll stop preaching about that. But I think we’ve let the audience know exactly where we stand on some of these current events.

Smart Subject-To Investing: Avoiding Scams and Finding Deals the Right Way

And, you know, there’s nothing wrong with letting our people know that being a watchman and a watchdog say, hey, guys, this is what’s going on out there. And if you don’t get caught up in it, you got caught up in it. Figure out how to I would. I figure out how to graciously get out of any deals that I got going on that I’m wrapped up into. That’s that may not be doing it the right way.

Well, and here’s a little negotiations tip for everybody, too. And most people know I have a negotiations course and I, and people always ask me, well, how do you get around certain objections? Well, here’s an objection, right? You’re dealing with a homeowner that you’re trying to buy a property subject to and just call it out and say, Mr. Mrs. Homeowner, there are people out there that are taking advantage of people in your situation. Here’s this court case from Arizona. This is not what we do. We do this in this manner. and you can you can set yourself apart by bringing it up like they have these objections in their mind already you always want to overcome their objections as quickly as you can before they voice them i love doing that using storytelling and storytelling is literally as simple as bringing up this court case and and telling them how you’re different and that can get you across the finish line and convert more leads just by calling a spade a spade

yes sir yes sir what else do we want to talk about here

well i we’re going to get to the meat of it now coach because you you are able to literally buy houses for ten dollars right you can stop legitimately stop foreclosures for 50 bucks let’s talk about how you do your business we’re done talking about all the people that do it wrong

How to Find and Buy Distressed Properties with Little to No Money Down

okay um i’ll just walk everybody through a scenario um and you don’t necessarily need to go buy uh um programs uh to run searches and stuff like that i’ll tell you the free ones that i use and and for somebody that if you don’t have a lot of money you’re working a second job and you want to figure out, well, hold it, what do you mean $10? Yes, we can buy homes for $10 and what’s owed on them. All right. Most people just hear the $10, go, oh my God, I bought a house for $10. Well, they’re underlying liens on those properties. Okay. So you can pick out, pick a county, whatever county it is. You can go to the county website. And here’s one in Denton County in the Dallas-Fort Worth area. I just picked up a property there, rehabbed it. I brought the mortgage current. That cost me $25,000 to do. If you’re a scammer out there, scammers, guys, to identify a scammer really quick, they’re not going to come out of pocket one dime. Okay. So in Denton County, you can go into the website, whatever. You can pick one. Pasco County, Florida. These are just places. I got a house I’m doing right now in Tulsa, Oklahoma. You can go to those websites and you can look up foreclosures, click on them and websites like my, there’s a website here in Florida, a county where I go there and it says foreclosures. I click on that and it gives me a list of all the houses that have auction dates coming up over the next 30, 60 days or so. Now I’ve got my list. Can you go pay for the list? You bet. Can I get my list for free? Yes, you can. So that’s how I get my list for free. I go to that and now it’ll give me a name of a person. It doesn’t give me the address. So I get the name of the person, the town that it’s in. And I can go to true people search.com. I can also go to fast people somebody. So then I go and look look them up and I confirm that they are the person that’s being foreclosed upon and then I’m able to reverse search that property address on public record there’s another paid for service that I use that I can see if they are in if if a list pendens l-i-s second word p-e-n-d-e-s which I think is Latin for pending lien, the list pendants. Pending lien means the foreclosure lawsuit. So I looked that up. So now I’m able to find my leads that way. Another way I find my leads, guys, are driving neighborhoods. I’m old school, man. I’m in my 60s. So I’ll do old school, drive neighborhoods. We call that driving for dollars. Okay. Now here’s another one. A friend of mine was a mailman, Tom Nardone, just had a heart surgery. God bless Tom.

Tom is in South Florida. And I met him probably 15, 17 years ago at a mastermind event. And he said, Hey, who is one of your biggest resources for leads? Who knows every vacant home, homes that are distressed in a farming area that you are farming? Your mailman. Well, I’ve gone up to my mailman before, just somebody at me, and you get all kinds. Oh, I can’t. Then you get to the college. Hey, sure, coach. I’ll help you. What I do is I I approach my mailman or the mail person with a $5 gift card from Dunkin Donuts. And I say, hey, man, I just want to give you a gift card for coffee. I just appreciate what you do. And I spark up a conversation. Act interested in them. Ask them questions. I call FFORD, where they’re from, their family. O is occupied. Obviously, I know them. How long you been a mailman? Hey, what do you like to do? My mailman here, in my street, I play soccer with. invited him out to play soccer. He’s from Jamaica. So recreation is, he likes to play soccer. Hey, what are your dreams? Tell me about your family. Anyways, so I get to know them. And as I get to know them, I also ask them, hey, by chance, if you ever come a property, come across the property that’s vacant, or if you know that they’re distressed, like they’re facing foreclosure because you got to deliver those packages, please let me know. By the way, if I get the house and When I cash in on the house, I’ll pay you $1,000. You know what that does for my mailman? They’re like, what? And if you don’t feel comfortable receiving the money, you tell me you want me to donate that to your church, youth group, and whatever, the high school, I’ll do that too. And they’re like, I’ll go tell you. I’ll take the money, but it’ll be on a Visa gift card, so you can do whatever you want to do with it without your name on it. Really? So you can’t track it back to me? No, you can let your wife spend it. I can receive that $1,000 gift card. So guys, there’s all kinds of ways to get the leads. Now when I get the lead, please Google and research your foreclosure laws about how you can make contact with a distressed homeowner. There’s all kinds of letter campaigns. I make it short and sweet to the point on a sticky note. This is what I do. I’m not telling you to do this. You figure out in your own area if you can do this. Derry.

My name’s Coach Pat. This is urgent. Please call me. Thanks. CP. And my phone number. I don’t let you in the house. I don’t say I can save your home. I don’t say I’m foreclosure rescue. I don’t say I’m helping hands. I don’t say anything. It’s urgent, Coach Pat. So I get a phone call. Coach, Derek, I got your note in the mail. Great. Hey, Derek, just before we start, just know this. I’m not an attorney, and I would be your plan B. And many times I’ve got my clients such as yourself call me and answer to prayer. And look, if you’ve got a minute, I’d like to talk to you about providing a solution for your situation with your house. It looks like you’ve got an auction date coming up next week. You got a minute? Would that be okay? And I ask them, would that be okay? Would that be all right with you? I never dare. I never had. No, that would be okay. And they’ll start talking to me. And I ask them questions. I never pressure a homeowner to do anything with me. The house I’m picking up later today, guys, it’s in Plant City, Florida. It’s on three quarters of an acre. She owes about $233,000. The after repair value on the home, and it needs cleanup, paint, and carpet, flooring, and landscaping. She needs to put about, if she paid for it out of pocket, probably about $15,000 or $20,000. She can’t sell the house for what’s owed on it. Right now, and by the way, I use realtors. I call them up. Hey, and I call realtors to send me leads as well. That’s another lead source. This lady’s six months behind. My realtor says the as-is value, she says that I would list the price of $199 or maybe $209, but she owes $230. And she goes, I’d probably get an offer in that $200 range. So there’s no equity here. But I can go in, hire some guys, day laborers. I can get it cleaned up for probably $5,000. I encouraged her to do a work party and get pizza and sodas and beer or whatever for her friends and do a paint it, landscape it, mow it, trim stuff and all that, clean the carpets and prep the house. And I said, let that be your plan A. Let your plan A go hire an attorney to do foreclosure defense. And I gave her an attorney’s friends and I shared it with you. Andy Lyons, Lyons Law Group out of Pasco County in Hernando County, Florida in the Tampa area. I gave her resources. That’s your plan A.

Avoiding Costly Mistakes in Real Estate: The Importance of Proper Title Searches, Disclosures, and Due Diligence

And by the way, if I can be a service anymore, here’s my phone to call me back. If you feel like you want to choose plan B, take some time to think about it. I’ll be willing to entertain a plan B with you. but I can’t make you a promise to guarantee the likelihood of any success. And so this afternoon, guys, we are getting our initial set of paperwork done. Sales contract, third-party authorization to release lending information. I have a durable limited power of attorney. I also have an affidavit of understanding that lists all my disclaimers and disclosures, about 32 of them, and that gets notarized. And my affidavit of understanding says, go hire an attorney. I’m your plan B. Is English your first language? I’m not under distress by drinking and drugs and whatever. I have, I’ve been told to go hire an attorney. I understand that Coach Pat’s not an attorney. He won’t represent me in the court. He’s not going prepare bankruptcy forms. He tells me to go seek a tax counsel, legal counsel, real estate counsel from everybody else. And that Coach Patt intends to make a profit some way, somehow in this transaction. That gets notarized. Now, I don’t give a deed this time, right now, guys. I’m going to type the property first before we pay. I get a title search done before I start putting time and energy into this. What if she doesn’t know all the liens and loans encumbering that property? I need to know what they are before I get into it.

For you Texas people, that’s like an abstract state. So if you get just a preliminary title report, that’s not good enough. And I didn’t know this until I did my deal out there. And the guy I got the property from, his wife passed away a year or two previous. He never took, he never closed out her estate by taking it to probate. I get the property from him. I do a rehab on it. He passes away. Title says, hold it. You bought the property from him, but the heirs that the, that the deceased wife had, they’re entitled to 15%. Like, oh my, but I did a tie report. Well, did you get a, well, let me get this phrase right. Derek never heard of my title attorneys out here never heard of a comprehensive exhaustive title examination a comprehensive exhaustive title examination I never heard how long you hey Derek how long you been doing real estate

Uhh 2003

Like me same thing yep never heard of such a hey I do Hey, I get a title report done. I know it’s, oh no, it didn’t show that there was, the guy that never closed out his wife’s estate, but a comprehensive exhaustive title examination would have showed me that. Well, I didn’t know to get that. So anyways, when you know better, you do better, and you learn from doing this business through the experience. So with that being said, I’m getting, we’ll get the property tied up. We’ll do the title report. the title report just comes back with that loan on it great we’re also using um by the way guys i don’t send in we were taught all of us were taught we send in the third party authorization to release lending information form the third party form guys i’ve got a generic one i’m no I’ll use that in some cases, but now, if I’m going to use a third-party form, I’m going to go to Freedom. I’m going to go to Carrington and Rushmore and Chase. I’m going to use theirs. Even though I have mine to use, I’m going to use theirs first. My power of attorney, we always thought, hey, use your generic one and the power of attorney and send that into the bank, and they’ll talk to you about it. Guys, because these sub-two characters, these bad characters, have dropped a turd in the punch bowl of real estate investing, my banking guru says, Coach, they have these AI systems like Musk is using in the government. Banks are using these AI systems to go through millions of files of mortgages in their system. Derek, you know what they’re looking for?

Well, signs of fraud, I imagine.

Two leading indicators. They’re looking for trusts that have a power of attorney on file. title companies will use the third party authorization but they don’t send in a power of attorney so those don’t get flagged i’m no longer sending in my power of attorney like i’ve always done the third party authorization form on the bank’s form is going to fly under the radar If you use the power of attorney The generic one that’s not on Freedom, Chase Bank of America, Wells Fargo Those aren’t going to be red flagged When they see the power of attorney Along with the generic They’re going to red flag that and look them up So moving forward today guys Yes I will get that power of attorney And I’ll keep it in my back pocket in the file In case I ever need to use that with title down the road. So I’ll get that done. Pull title. I’m going to contact the bank to get a payoff from the bank because right now it looks like it’s $230,000 to $233,000 from what I can tell in my research, but I want to know exactly what I’m dealing with. If you don’t know your numbers, you’re gambling. You’ve got to know your numbers so you can make an intelligent, educated decision for real estate investing when you know your numbers. If you don’t know your numbers, guys, you’re rolling the dice. Know your numbers. So now that with the numbers come in and everything is fine, there’s one loan.

Now I know what I’m dealing with. And also, I want to know, she says she’s six months behind. I want to know if the bank will allow a repayment, not a loan bond, a repayment program. I’ll get the property cleaned up to a certain extent. I can put a tenant in a property, Derek, and I love doing this. I just cleaned it up enough. My tenant’s paying me first month’s rent, second month’s rent. and I never take a security deposit. I never use the word deposit. In my rental contracts, they’re called use and occupancy agreements. And I have a use and occupancy fee, which is equivalent to one month’s rent. So I get three times the month’s rent up front. But if other stuff needs to take place in the house, I advertised get a three month rent in lieu of cleanup, in lieu of paint and so forth. But in my agreement, I spell out what they’re going to do for that three months rent. I’ve even given up to two three months rent when the place was actually just, it was destroyed. Either I can put that money into it and be out of pocket money, but I’ve got time. Time is my friend and time is money. So I’ve got a tenant that’s willing, hey, if I’m going to rent that out for $2,500 and if this guy’s going to give me a month’s free rent, that’s $2,500. I can do the cleanup and work myself. By the way, what if I let them in two weeks early to start cleanup before they moved in? The thing’s just sitting there anyways.

Right.

Remote Real Estate Investing: Controlling Property Without Ever Seeing It

So that’s one way, guys, how I find a property. I pick it up subject to and move forward with it. I advertise on Facebook Marketplace. I’ve done this, Derek, when I lived out of the country and South America doing missionary work in Ecuador. I just advertise on Facebook Marketplace in that area. If I’m local to it, I’ll put up bandit signs. And I’ll put a bandit sign in the front yard. I’ll find a realtor. I’ve done it remotely, but I’ve never seen the property myself. And I’ll find a realtor to do an evaluation on it. And I’ll send them a lockbox. Or I’ll send a locksmith a lockbox via Amazon. So I don’t have to pay them for it. All my lockboxes, guys, are the same as the year. So today it’s 2025. All my lock boxes will be $20, $25. I never have to remember one property to the next to the next. $20, $25 is it. I send them, and I’ll pay the guy $75 typically. He changes out the locks for me, puts the key in it, puts the lock box, and he hides a key underneath a brick or a rock or something out front. And I’ve always got that spare key. And I never have to be there physically to see the property.

I mean i i do very similar scenarios because we we don’t buy necessarily as far away as you do but i’m buying statewide and it’s often two to three hours away from where i live and i have always shown property you know to private individuals just giving them certain instructions they got to send me a picture of their driver’s license and and other proof before they get the lockbox code and and i mean people are afraid of that but i shouldn’t say the people you’re showing it to are afraid of that but but other investors you know they’re like oh i i gotta be there i want to show it to them why you know 50 percent of the time they’re not going to show up anyways um they don’t get the lockbox code until they actually show up and if you’re ever nervous that somebody’s going to come back well you just change the code occasionally you don’t there’s so many things you can do but i have showed property that way for years and in general most people are good most people are honest and let’s be let’s be frank what does it take to break into a house nowadays i mean i can i can pop a lock with cordless tools nowadays i can be in a house in under a minute easy i’ve done it you know on houses that i own and i’m like okay how long is They’re really going to take me to cut this lock and drill a lock under a minute with two cordless tools. So if somebody wants to get in, they’re going to get in. Well, I do want to go over one other thing that you do that I think is awesome. And it has to do with the Remick rule. Can you explain the Remick rule and how you control property? And I don’t know the percentage of time that this actually works. I don’t know how often you’ve tried it. But when we were chatting before, I loved that strategy.

Okay. Before I say the remit, guys, on a property like the one I just described, we’ll catch up one way or the other, the back payments on this property. Sometimes, guys, it’s worth it. For instance, a house I picked up in Texas, The as-is value was under $200,000, and the payoff on the property is right around $185,000. So there’s little to no equity in the home. We would probably list it as-is for $199,000 and go from there. But there wasn’t enough money to take care of closing costs and real estate commissions. But the ARV on that property was $400,000. So on that one, guys, the payoff was $180,000. The guy borrowed $166, didn’t pay on whatever. This is the one that the guy committed suicide on his wife’s anniversary. And we already had the paper. We already filed the deed and all that stuff. So I had to pay $25,000 to bring the mortgage current, which then dropped me back down to, what, $155,000 on the property to pay off. I put $100,000 into it, and I listed it for $399,000. We sold it for like 382-ish, 384-ish. So there was a nice chunk of change. I created equity. So that was a fine, bring the mortgage current and flip it.

Creative Real Estate Financing: Private Lending, Equity Creation, and the REMIC Advantage

And yes, it took money to do that. I used a private lender to fund it for me. And I funded some of it out of my own pocket. Okay. But you can find private lenders out there that will fund the fine, fix, and flip and all the stuff that you need. But we created enough equity where it made it worthwhile to pay for the private loan on it, the rehab expense, and to bring the mortgage current. That’s how we created equity in that situation. All right, REMIC. Guys, REMIC stands for Real Estate Mortgage Investment Conduit. Real Estate Mortgage Investment Conduit. REMIC is an IRS tool that allows a bank not to have to pay transfer tax when they sell off and transfer the note. So when a note is originated, think about it. And some of you go, oh, that’s what happened. Your originator has to hold the note for 90 days. Some lenders out there that are going to sell your note off right away may require free, and private guys will do this, they’ll require three months payment up front so they can sell that mortgage off quicker than 90 days. So that’s why, kind of like the backstory, why sometimes like, why did they do it? Why are they requiring three months payment? All right, if a mortgage defaults in that first 90 days, the originator is responsible for it. That’s why you need the 90 days. Also, private mortgage insurance, PMI, doesn’t kick in until the 91st day. That’s a whole other thing.

Going back to the REMIC, the note originator has 60 days with the IRS to take that note and apply it or put it in. It’s just really a piece of paper that needs to be applied for called a REMIC. So it’s placed in that Remick trust or in the Remick. And now when that note mortgage is sold and transferred and sold and transferred, sold and transferred, the bank does not have to pay transfer tax. Okay, that’s cool. What if we have a letter in my course from the IRS that says, we would like you to be a whistleblower. If you know of any Remick rule breakers out there, the banks, if you got any information on that, we would love to know. Please be a good patriot because we want those banks to have to pay taxes if taxes is due and payable for those people, those banks out there and originators that have violated the rules. What does that mean? If we find a through looking up and investigating, looking at an online file in the county building, and we see that a remick was originated years later, two years. I’ve had one like five or six years later. Remember Countrywide Mortgage, Derek?

Oh, yeah.

Okay, they went belly up maybe in 2009. I had a loan that was originated maybe 2004, let’s say 2005. And Countrywide placed it in a remick in 2011. An officer of Countrywide placed it in a remick in 2011. So what does that say to you?

Fraudulent.

Exposing Bank Fraud: How a REMIC Violation Got These Liens Wiped Out

It’s fraud. Besides that, violating the 60-day timeframe, it’s six years. Yeah. What an officer of countrywide was still operating as an officer. It came out to being, it was somebody that was working for Bank of America. That was an employee or a junior officer of Bank of America did it. Not countrywide. So with that being said, back then it was called a C-Walt, a Flow 3 C-Walt Trust. So when a note mortgage is originated, you got A paper, B paper, pretty paper, ugly paper, and really ugly paper, whatever, A, B, and C. So they put those notes and mortgages in a pool of other notes and mortgages. All right, guys, so pools can be like small ones, $50 million, $250 million, $500 million of pool of other notes that they bundle together and they securitize them on Wall Street and they sell them off in a bundle package. All right, so you’re like, hey, coach, well, what does all this mean? How does this benefit us? Well, the one bad apple spoils it for the whole pool and now transfer taxes due and payable on the whole pool of notes, which is millions and millions of dollars, if we catch the bank with their hand in the cookie jar. And we can go to opposing counsel and say, hey, here’s a summary of our findings that the note mortgage was originated with Aegis or whatever, a patriot lending back in the day or whenever, and it appears that the note was placed in a remick three years later, 36 months later. According to IRS rules, blah, blah, blah, the note mortgage has to be placed in the remick to qualify for not paying transfer tax within 60 days. it appears that your client the bank is hold down if the bank gets it from an originator now the bank actually buys that problem and that wall street investor now owns the problem they own the good the bad and the problem and so we tell opposing counsel you know what you may want to do what’s in your client’s best fiduciary interest is it in the best fiduciary interest to release the lien on the property that we’re talking to you about, the subject property, or would you like to take our findings? By the way, the letter of the IRS says, hey, if we know any Remick Rule Breakers, we can take that. There’s a whistleblower hotline and an email. You know what? Hey, opposing counsel, why don’t we do this? Hey, let’s just be fair with each other. Why don’t we just, let’s give it a week and you get, you can do your little, you know, marinate on it, whatever, and take it to your, you know, your partners in the firm and you can take a look at it. And is it, the question is, is it in your fiduciary best interest to advise your client to release this lien or, or just to tell me to go pound sand and just, if you want to tell me to pound sand, I’ll wait until Friday and I’ll take the pound sand as a, as a encouragement for me do my patriotic, patriotic, patriotic duty to inform the IRS and just for my findings to them. You know, you tell me what you would like me to do. How would you like me to, I’ll just press the pause button over here. Tell me, you know, hey, just get back with, circle back with me and let me know what your thoughts are on it. And I’ve had two of them released. One of them is on Dartmouth Avenue in Tampa. And the other one is in Anniston, Alabama. I never saw that property. Both with Wells Fargo. And I got them free and clear.

How much were those two liens that they wiped out?

Dartmouth Avenue in Tampa. I’m about four houses off the Hillsboro River. and that one they owed right around $130,000. It was a two bedroom, one bath, we call them a bungalow down there, carport and guys, the two gentlemen that own it, they’re gay guys and it was my wife’s hairdresser and that’s how I found out about the house. Decorated gorgeous. New roof, new wiring, new AC, new kitchen, granite countertops, new flooring, new bathroom. Oh, it was beautiful. And Derek, the story in that one is I went to bring the mortgage current and back then sending my third-party authorization, the power of attorney, all that stuff. I’m negotiating with the bank. I want to figure out how to bring the mortgage current. That one, my cash flow on it, if I were to pick up making the existing mortgage, it only cashed for about 600 bucks a month. At that time, I’m like, oh, that’s great. And the cash flow. So I was negotiating with the bank to, in the beginning, everything was fine. And then the bank, my attorney colleague, not business part, my attorney colleague, though we partnered together on deals. They were like, hey, we just, you know, we were doing securitized audits and stuff like that. And they were like, hey, you know, Mr. Martin, we think that it’s in our best interest. Hey, let’s not open up a can of worms, the lady said. And I said, what are you talking about? You know what? We think that if we go away, would you go away? What am I going away from? And well, in good faith, we’ve already decided to release our lien on the property. I’m going to give it a definition, but is my definition the same as you? Yes, Mr. Martin. It is the same definition. Man, they’re lying. There’s no way. Derek, I hung the phone up. I called Hillsborough County. And they said, hey, Mr. Martin, hey, congratulations. We just got a letter in yesterday. And it looks like you paid off your loan. Man. So, Derek, I rented that house out for three years. And I sold it.

Exclusive Offer: Learn How to Profit from Pre-Foreclosures – $1,500 Off!

Nice. Nice. Hey, we do got to start winding this down. I’ve got a couple other things I got to get to today. But I’d love to have you back on and keep these conversations going. But on that one, specifically, in a very short answer, how does your basis in that property work as far as capital gains and things like that?

Well, guys, I’m not a financial advisor. However, if you think about I do like Cidra’s self-directed Roth IRAs, I am over 59 and a half. I and a self-directed Roth IRA once been open for five years. You can direct that Roth, put the $10 binder fee down and whatever borrowing you against that property. Once that thing is, the underlying liens are paid off, the rest of the profit goes back to a self-directed Roth, of which I can distribute the next day capital gains tax-free. Another one is that, and get with your tax advisor and your real estate attorney to do a 1031 tax exchange, and using that money to purchase another property or renovate, blah, blah, blah. So there’s, and then sometimes, Hey, you know what, depending on what my cashflow needs are, if I have to cash out on a property on that one, I wish I kept it now. But I needed cash at the time. So I sold it and, and I sold it and I use that cash for another project that we have.

I love it. I love it. Well, I mentioned earlier in the show, thegenerationsofwealth.com/coachpat is going to link everybody that’s listening over to you. I know you’ve got something that you’d like to offer my audience. And and it looks like you’re graciously given a savings to anybody that comes through that link. What is that, Pat?

Okay. We talked about this. My course, guys, goes for twenty five hundred bucks. So that’s $2,497 or $95, something like that. But for Derek’s listeners, for you people, guys, there’s a link. And Derek, do you want the people going to your link?

Go to my link. We’ll redirect over to Pat.

Okay. So guys, if you go to that link, you’ll find that when it comes up, it should come up $997. So basically, I’ll give you $1,500 off. What my course is called is called Pre-Foreclosure Rental Riches or Pre-Foreclosure Exit Strategies. I’m actually putting together, if you get it today, you’re going to get both courses for that. And so the Rental Riches course is what we have up now. And I’m also putting together my Exit Strategy course, which gives my exit strategies on picking up these pre-foreclosure properties. I like the pre-foreclosures because that’s easy cherry picking. It’s not hard to pick them up. And by the way, I go through all my strategies. I go through how to find the properties from driving neighborhoods to foreclosure lists, skip tracing, what to say to a homeowner, what not to say to a homeowner. Check your legal, you know, your state laws on so you’re not molesting a homeowner. You can do it the right way. And then the next strategy, keeping within your numbers. If you know your formula, if you know your numbers, stick with your strategy. Don’t get emotionally attached to any one deal. The numbers have to fit. If they fit, run with it. If the numbers don’t fit, press on them. I don’t care if you have to go through 100 deals to get to the one. It’s going to be worth it. And then also my course, I’ve got a guest professor area, and I’ve interviewed 12 to 15 guys.

One guy does credit lines of business, and he teaches you exactly what to do. Jeff Watson, attorney. Nick Fomer on overages. Richard Roof on AI. Zach Childress to Jason Lucchese to David Corbley. I’m talking about these guys do business the right way. And these guys are quality individuals. They’re not the cheesy, you know, flash in the pan guys. It’s about doing business. You got to work at it. You can’t sit on the couch eating Twinkies thinking, oh, I’m just having an avalanche of cash. No, you got to put in the time. You got to educate yourself and you got to do business the right way. And more importantly, you got to got to have the right contracts and forms so i have a slew of forms and stuff that i’ve used i’ve tweaked up gotten with attorneys to make it the best right now that i think are in the industry and i’m always tweaking them up and then i have a beautiful private facebook page that we get in and offer content and back and forth and share what’s coming up from lawsuits watch out for this this situation and and changes in the industry and and what’s going on with the market and that’s it well

I love that and and i know 90 of the people that you mentioned as far as your your coaches that you you know interviewed um very quality uh background on on all the ones i know of so we’re we are going to wind this up uh coach i i really appreciate it uh i will say this is one of the longer shows that we’ve had in a long time and i know we could have kept going and i would have kept going but quite frankly i have an appointment that is starting very soon that i’m going to be late for so um so again thanks for your time really appreciate it, god bless you take care man and For the rest of you um i’m sure you if you didn’t enjoy this show i don’t know what you’re looking for from us but um this is what we do is what we bring quality people like pat until the next show you know go out there please share this help us grow the community and we look forward to seeing you on the next one. See ya.

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About Coach Pat Martin