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Fannie Mae List of Fake Companies Providing Fake Employment Verification: Why are these all in California?

Fannie Mae, the Federal National Mortgage Association, has a Mortgage Fraud Program that alerts the industry about frauds and potential frauds.

The organization has come up with a list of over 60 apparently fictitious companies that have provided fake employment verification using fake pay stubs.

Borrowers who are trying to get a mortgage to buy a house would list these companies as their employer and utilize bogus paperwork, such as W-2 Forms and paycheck stubs to prove that they have enough income to qualify for the loan

What I don’t understand is why are all these fake companies based in California?

As a matter of fact, Fannie Mae lists as one of the red flags for potential fraud as:
“California (geographic common denominator)”

The Playboy Mansion has Dropped in Value Just Like the Playboy Stock

by Fred Fuld III

Is the centerfold industry now passé ?

At one time, Playboy Magazine was the leading men’s magazine.

The publisher, Playboy Enterprises, was publicly traded for many years and had one of the most popular stock certificates, featuring a vignette of a nude Playboy Bunny, Willy Rey.

It also had a picture of the bunny logo, and Hugh Hefner’s signature printed on it.

Source: Author’s Collection

Hugh Hefner later took the company private.

After Hugh Hefner passed away, the company again began publicly trading through a reverse merger with a SPAC. It now trades as PLBY Group (PLBY).

Unfortunately, the stock hasn’t performed so well, trading at 2.68 at the beginning of 2023 and ending up at a dollar a share by the end of the year, a drop of over 62%.

But what about real estate? The Playboy Mansion?

The former Playboy Mansion, located at 10236 Charing Cross Rd, in Los Angeles, near Beverly Hills, was purchased on August 16, 2016 for $100,000,000. It is now only worth $34,166,291 according to Redfin, a drop of 65%.

This 14,217 square foot home has six bedrooms and eight bathrooms, and is located on five acres of land.

Which do you think has a better chance of recovering, the stock or the mansion?

Disclosure: Author didn’t own any of the above at the time of publication.

How I Made 12% Investing in Tax Liens

by Fred Fuld III

Have you heard about tax liens, especially how you can sometimes get high interest rates or even a house from your investment? Let me tell you how tax lien investments work.

I have gone through the process of looking looking for tax liens, buying, and getting a return.

What Are Tax Liens?

A tax lien is a legal claim placed on a property by the government (usually a county, sometimes cities) when a property owner fails to pay their property taxes. It is essentially a debt owed to the government for the unpaid taxes. The tax lien gives the government the right to collect the owed taxes by selling the property at a tax lien auction.

Tax lien investments, also known as tax lien certificates or tax lien sales, are investment opportunities where individuals or entities can purchase the right to collect the unpaid taxes from the delinquent property owner. When a property owner fails to pay their property taxes, the local government may decide to hold a tax lien auction to sell the tax liens to interested investors.

Here’s how tax lien investments typically work:

Tax Lien Auction: The local government organizes a tax lien auction, where investors bid on the right to purchase tax liens for specific delinquent properties.
Interest and Redemption Period: When an investor purchases a tax lien, they are essentially lending money to the property owner to pay off their taxes. In return, the investor receives a certificate indicating the amount of the lien and the interest rate that will be applied if the property owner redeems the lien.
Redemption: The property owner has a designated period (redemption period) to pay back the delinquent taxes, plus interest and any additional fees or penalties, to the tax lien holder (investor). If the property owner redeems the lien within this period, the investor receives their initial investment plus the accrued interest.
Property Acquisition: If the property owner fails to redeem the tax lien within the redemption period, the investor may be able to foreclose on the property and become the new owner. However, this process can be complicated and varies depending on local laws and regulations.

Tax lien investments can offer potential benefits, such as higher interest rates compared to traditional investments, and the possibility of acquiring properties at a discount through foreclosure. However, there are also risks involved, such as the property owner’s inability to redeem the tax lien, legal complexities in the foreclosure process, and the potential for properties to have other liens or issues that make them undesirable investments.

When you get the tax lien certificate, don’t expect anything fancy, like a certificate with scrollwork borders and a vintage font.

The following is an example of what I received from Maricopa County in Arizona. (Private information has been greyed out.) It almost looks like it was printed with a dot matrix printer.

Investors can buy the tax lien certificates through county auctions and can earn outrageously high interest rates of potentially 16% to 24% on their tax liens. Plus, bidding can be done all online.

The property owners are required to pay the back taxes plus the interest otherwise they can lose their property to the tax lien owner.

What States Offer Tax Liens?

The states that offer tax liens are as follows:

Alabama
Arizona
Arkansas
Colorado
Florida
Illinois
Indiana
Iowa
Kentucky
Maryland
Mississippi
Missouri
Montana
Nebraska
New Jersey
New York
North Dakota
Ohio
Oklahoma
Oregon
South Carolina
South Dakota
Vermont
West Virginia
Wyoming.
District of Columbia

You don’t have to live in a tax lien state in order to buy a tax lien in that particular state, plus you don’t even have to be a United States citizen or resident.

My Tax Lien Experience

The fist thing I did, after discovering that Maricopa County in Arizona was having an auction, was that I began looking though the Tax Lien section of the Maricopa County Treasurer’s Office website.

I then accessed the list of all the tax liens of properties being auctioned off, and started going through it. After being overwhelmed with numerous parcels, I decided to narrow my search, and chose Scottsdale, figuring that I couldn’t go wrong in a high income section of the county.

So I went through every property in Scottsdale, including houses, condos, lots, and raw land. It took a few hours but I did my searching while watching TV.

I looked up literally every one of the properties on Google Maps. Some of the lots turned out to be strange shapes, such as three feet wide by a 50 feet long. Some of the houses had liens that were way above my budget.

Then I came across a great one, a lot in an expensive neighborhood surrounded by million dollar homes, and the tax lien fit my budget of a maximum of ten thousand dollars. Since it was in a nice development, I assumed that it couldn’t be located on top of a toxic waste dump.

On Google Maps in Satellite View, I noticed that the ground had been graded and an indentation for a swimming pool was created, but no structure or even a foundation was on the property.

But then I discovered something else. I found a more up-to-date map on the Maricopa web site (which was hard to find and navigate to at the time) which also had a satellite view. When I checked on that map, it showed that the lot actually had a house on it! Apparently, the Google Maps picture was a bit out of date.

Considering that was a nice bonus, I registered to bid right away and funded my account.

Once all that was completed, I could bid. Now the way the bidding works is what I call reverse-intuitive.

Here is how the bidding process works. You bid on what the lowest interest rate is that you are willing to accept on your tax lien. The bidder who bids the lowest interest rate wins. At the time (this was several years ago), the bidding for this particular county could range from 18% to 4% in one percent intervals. The bidding range has since changed; it’s now 16% down to 0%, the last time I checked.

It was time for me to bid and with a couple weeks to go, I placed a bid of 6%, figuring that would be a nice return if I won.

Then two days before the auction close, I thought that I should lower the bid to 5% as it would give me a better chance of winning, plus 5% was and still is still a great return.

One day before the close of the auction, I changed my mind one more time, since I wanted that property badly.

So I finally changed it to 4%, the lowest bid level available at the time. At that time, I really didn’t care how much or how little the interest rate was, I just wanted to get the tax lien and hope that it never got paid off, so I could take over ownership of the house.

The next day, the auction closed. According to the web site, there were two bidders at 4%, with me being one of them. When there is a tie, a drawing takes place. I’m not sure how the drawing takes place, and didn’t really care at the time, but I won!

It was my lucky day. A few days later, I received the tax lien certificate in the mail. It looked nothing like any certificate I had ever seen. (See above.)

So you’re probably wondering if I got a million dollar mansion for a few thousand dollars.

As it turned out, the lien was paid off. I ended up owning the lien for slightly over a month, but earning three months worth of interest, giving me an effective yield of almost 12%. I’m not going to complain about getting three months of interest. I think it had something to do with the tax lien holding period overlapping three months.

The tax lien investment was practically riskless. It was backed by the value of the property, which was substantial. Not to bad a return for such a short term holding in a very low interest rate environment.

Where to Find More Info about Tax Liens

There are plenty of these tax lien auctions available. There are also plenty of books available about tax liens.

If you are interested in learning more about tax liens, check out some of these books:

Your Great Book Of Tax Liens And Deeds Investing

Understanding Tax Lien and Tax Deed Investing: No Fluff

The Complete Guide to Investing in Real Estate Tax Liens & Deeds: How to Earn High Rates of Return

Zero Risk Real Estate: Creating Wealth Through Tax Liens and Tax Deeds

Profit by Investing in Real Estate Tax Liens: Earn Safe, Secured, and Fixed Returns Every Time

Tax Lien$ for investing in New Jersey tax liens

The 16 % Solution, Revised Edition: How to Get High Interest Rates in a Low-Interest World with Tax Lien Certificates

Where are the Upcoming Tax Liens?

If you are looking for the web sites of the counties, parishes, and cities holding tax lien sales, here is a random sample of some of them with links:

Maricopa County, Arizona
https://treasurer.maricopa.gov/Pages/LoadPage?page=TaxSaleDetails

Yuma County, Arizona
http://www.yumacountyaz.gov/government/treasurer/tax-lien-information

Broward County, Florida
https://lienhub.com/county/broward/certsale/main

Sarasota County, Florida
https://www.sarasotataxcollector.com/services/tax-services/property-tax/tax-cert-sale

Sarasota, Florida
https://sarasotafl.realtaxlien.com

Charleston County, South Carolina
https://www.charlestoncounty.org/departments/delinquent-tax/tax-sale.php

Gwinnett County, Georgia
https://gwinnetttaxcommissioner.publicaccessnow.com/PropertyTax/DelinquentTax/TaxLiensTaxSales.aspx

Fulton County, Georgia
https://www.fultoncountytaxes.org/property-taxes/property-tax-sales.aspx

Baldwin County, Alabama
https://baldwincountyal.gov/government/revenue-commission/tax-lien-auction/lists/tax-lien-auction/191c681f-3e3e-4b00-9e1c-8a4b25f0b06a

Lake County, Indiana
https://lakecounty.in.gov/departments/treasurer-taxsaleinfo

Polk County, Iowa
https://www.polkcountyiowa.gov/treasurer/information-for-tax-sale-buyers/

Jefferson County, Kentucky
http://www.jeffersoncountyclerk.org/delinquenttaxes/

District of Columbia
https://otr.cfo.dc.gov/page/real-property-tax-sale

Baltimore, Maryland
https://www.bidbaltimore.com/main?unique_id=87A77E142A5211E8AB57310613945BAD&use_this=view_faqs

Nassau County, New York
https://www.nassaucountyny.gov/527/Annual-Tax-Lien-Sale

Happy Investing!!!

As an Amazon Associate, earnings may be generated from qualifying purchases of books from affiliate links at no additional cost to you.

How to Short Real Estate

Just a year ago, 30-year fixed mortgages for homes were less than 3%, according to Fannie Mae. Now, the average mortgage rate is in excess of 7% for the same type of loan.

by Fred Fuld III

Just a year ago, 30-year fixed mortgages for homes were less than 3%, according to Fannie Mae. Now, the average mortgage rate is in excess of 7% for the same type of loan.

An increase like that, where the annual cost to own has more than doubled, has to affect the price of real estate.

New buyers of homes will be affected.

Existing homeowners with variable rates will be affected.

Potential buyers of commercial properties will also be affected.

When the cost to own goes up, the price of the asset has to drop in value, assuming all other details remain equal.

So suppose you want to make money from the drop in real estate but you don’t want to (or unable to) short stocks or ETFs.

What’s a trader or investor to do?

There are a few Inverse Real Estate Exchange Traded Funds, which increase as the stocks in the portfolio drop in value.

The ProShares Short Real Estate ETF (REK) has net assets of $72.8 million and has an expense ratio of 0.95%. It is up 30.2% so far this year.

If you want to get a bigger bang for your buck, there is the ProShares UltraShort Real Estate ETF (SRS), which has a goal, in very simple terms, of providing twice the inverse return of a portfolio of REITs and real estate stocks. It has $85.2 million in net assets with a 0.95% expense ratio. This ETF is up 61.5% so far this year.

The Direxion Daily Real Estate Bear 3X Shares (DRV) is what is referred to as a triple bearish ETF, the most volatile and speculative. It has $197.85 million in assets, a 0.99% expense ratio, and has a year-to-date return of 88.5%.

Hopefully you can find some way to make money from the real estate market, and congratulations to those with fixed mortgages below 4%.

Disclosure: Author didn’t own any of the above at the time the article was written.

4 Equity REITs Paying High Yields Over 10%

by Fred Fuld III

Investors continue to look for high yields on their money. One option that many consider are high yield equity REITs.

A REIT is a Real Estate Investor Trust. A REIT is a company that owns and typically operates income-producing real estate or related assets, such as real estate mortgages.

Properties may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans.

REIT Office Building — *Office Building in a REIT*

Unlike other real estate companies, a REIT does not develop real estate properties to resell them. Instead, a REIT buys and develops properties primarily to operate them as part of its own investment portfolio.

REITS are required to pay out at least 90% of their taxable income to shareholders as dividends each year. However, most REITS pay out at least 100 percent of their taxable income to their shareholders.

The big advantage of REITs is that they avoid double taxation. They are generally not taxed at the corporate level, unlike corporations.

This tends to boost the payout rates for REITs, compared to stocks that are registered as corporations.

There are two primary types of REITs: equity REITs and mortgage REITs.

Equity REITs own the actual buildings and land.

Mortgage REITs own mortgages on the properties. Last week, we published an article on large cap stocks paying over 10% which included some mortgage REITs.

Our researchers have turned up four equity REITs that are currently yielding over 10%.

High Yield Equity REITs

Office Properties Income Trust (OPI) owns, operates, and leases properties to single tenants especially those with excellent credit such as government entities. The annual dividend rate is 11.18%, payable quarterly, and the stock is trading at 65% of book value. Quarterly revenue growth was 2% year-over-year. Earnings have dropped.

Presidio Property Trust (SQFT), which has a great stock ticker symbol, is diversified both geographically and by real estate type, with a portfolio that includes office, industrial, retail and model home residential properties.

The stock pays a dividend yield of 13.59% and the price to book value is 0.21. Earnings per share growth this year was 45.4%; however revenues have been down.

Global Net Lease (GNL) pays a 10.69% yield. Quarterly revenue growth was up 8.6% year-over-year. Quarterly earnings growth rose by an incredible 571.5% year-over-year.

The company has a a diversified global portfolio of commercial properties in the United States and Europe.

Generation Income Properties (GIPR) has a diversified portfolio of office, industrial and retail high quality single tenant properties. The stock pays 10.39%.

Quarterly revenues were up 33.3% and quarterly earnings increased by 71.9%.

Don’t forget to check out the article on stocks going ex-dividend in August.

Disclosure: Author didn’t own any of the above at the time the article was written.

Buy Rush Limbaugh’s Palm Beach Mansion for Only $175 Million

by Fred Fuld III

Looking for a new home in Florida?

Forget tiny houses. The perfect location is available to you in Palm Beach.

The mansion that was owned by conservative talk show host Rush Limbaugh is up for sale, according to ZeroHedge and the Wall Street Journal. Limbaugh passed away last year.

The home sits on a lot over two acres, and has over 16,000 square feet of living space, according to Zillow. It reportedly has 20 bathrooms.

The asking price is between $150 million to $175 million.

How About Investing in Elvis Presley’s House?

by Fred Fuld III

Everyone knows who Elvis Presley is, the King of Rock and Roll. So how would you like to own his three-bedroom, 1,260-square-foot house where he lived during 1943 and 1944, with a possible price of less than $50,000?

Elvis Presley Jailhouse Rock – Credit: Wikipedia

Yes, it’s possible. The house that Elvis lived in with his parents, Vernon and Gladys Presley, is going to be auctioned off by Rockhurst Auctions, on Sunday, August 14, 2022, at the Holiday Inn at 3411 Elvis Presley Blvd., in Memphis, Tennessee.

The house was originally located at 1241 Kelly Street, in East Tupelo, Mississippi. It was carefully dismantled and preserved, ready to be rebuilt. The dismantling was videotaped, and the house is currently stored in a trailer, which is included as part of the auction.

The estimate is between $30,000 and $50,000 with a starting price f $25,000.

What a great casita this would be to reconstruct in the back yard of an Elvis fan.

Almost a hundred other Elvis artifacts will also be offered at the auction.

Elvis has left the building.

Invest in a Scottish Island with a Castle: Become a Lord

by Fred Fuld III

Have you ever wanted to own your own island? Hav you ever wanted to own your own castle? Have you ever wanted to have a title of Lord (Laird)?

How would you like to have all of the above? Well you can. An island, The Isle of Vaila, located in Walls, Shetland, Scotland, is for sale.

Isle of Vaila - Savills — Isle of Vaila – Savills

The price? Offers over $2,146,288 are being considered. The island is being offered by Savills in Edinburgh.

Here is what you get as part of the purchase price:

Approximately 757 acres
A 17th century castellated mansion with 4 reception rooms and 6 bedrooms
A 3 bedroom farmhouse
A 2 bedroom caretaker’s cottage
18th century watchtower

This island, with beautiful views, has a private shore base into a sheltered bay with a pier.

The mansion/castle has four reception rooms and is furnished with the original late 1800s furniture.

So you get an island, a castle, and because the word “Lord” or “Laird” is generally used to refer to any owner of a landed estate in Scotland, according to Wikipedia, you technically get a “title”, although that is not specified in the listing and would require further research of titles with the Lord Lyon. In the traditional Scottish order of precedence, a laird ranked below a baron and above a gentleman.

So what more could you ask for? Anyone want to go in on this island with me?

How About Investing In Your Own Private Island?

Have you ever wanted to own your own island? With a house on it? In the United States? Well now you have your opportunity.

According to the Wall Street Journal, a private Palm Beach island is for sale for only $120 million.

The name of the island is Tarpon Island and the property size is over two acres.

However, the current owner, Todd Glaser, is a real estate developer who just bought the property in July for only $85 million, so he would be making a 41% profit in two months. Talk about real estate inflation!

The owner is giving another option to the new owner. At a price of $200 million, he would provide renovations and additions, subject to changes in construction costs.

The current house is 9,690 square feet, and has five bedrooms and nine bathrooms.

The Best Way to Invest in Real Estate: Top Residential REITs

by Fred Fuld III

Let’s say that you want to invest in real estate. You don’t want to buy single family residences, because prices are too high and you don’t want to deal with leaky toilets and other management issues. Even if you have a property manager, you still have to deal with rental problems indirectly.

You might want to consider Real Estate Investment Trusts, most commonly referred to as REITs (pronounced “reets”). However, there are many different kinds of REITS, such as hotel REITs and industrial REITs. REITs pass through most of the rental income to investors, avoiding taxation at the corporate level.

Many investors are staying away from office building REITs, since so many people are working from home now and companies don’t need as much office space.

Other REITs that some investors are avoiding are retail REITs, as many retail shops have closed up and more and more people are buying online instead of through brick and mortar locations.

So investors have been looking at residential REITs which own apartment buildings. If people can’t afford to buy a home, they have to live somewhere, and apartments are usually the best option.

The largest REIT by market capitalization is Equity Residential (EQR) with a market cap of $29.568 billion. The company has a price to earnings ratio of 45 and pays a yield of 2.27%.

Running a very, very close second is AvalonBay Communities (AVB) at a market cap of $29.537 billion. It has a P/E ratio of 37 and has a dividend rate of 2.96%.

Invitation Homes (INVH) is in the business of leasing single-family homes. It sports a market cap of $21.2 billion and a P/E ratio of 105. It pay a yield of 1.7%.

Essex Property Trust (ESS) has a $19.5 billion market cap. It trades at 43 times earnings and the yield is 2.69%.

You might want to check and see if your portfolio has a home for a residential REIT.

Disclosure: Author didn’t own any of the above at the time the article was written.