Wholesaling Real Estate with delinquent taxes

Wholesaling Real Estate with delinquent taxes

– Hey, what’s up guys? Sorry for the messy office here. We’re getting things done
in our brand new office, but you know yesterday I did a Live and I got this repeated
question over and over again. And I get it on Instagram and I get it on, you know, Facebook, my Facebook group Wholesaling Houses Elite. I just wanted to address it one time. So here’s we go, the question mainly is can I wholesale a house
that has a tax lien on it? For example, a owner has tax in arrears. They have not paid their
taxes for a few years. And let’s just give you an example. This can be the same with
any mortgage as well. So if a house has a mortgage on it. Now essentially what you have to look at it as an encumbrance, right. So when your attorney or title
company does a title search they’re gonna see that this
property is not owned free and clear because it has some liens on it, which could be a tax lien,
could be a mortgage lien on it but it has some type
encumbrance on the title that will not make it
transfer free and clear unless those encumbrances are paid. So I’m gonna keep this real simple. J-Rock’s gonna just put
some numbers on this side so you guys will be able
to follow along, right? So let’s just say the ARV for this property is $100,000, okay. All right, so ARV’s a
$100,000 and there is a tax bill on the property for $20,000. Now this tax bill could
also be interchanged with the word mortgage. Okay, ’cause they work exactly the same. Right, so let’s just
say you go to a house. You get a phone call. You get a phone call, you go to a house and the house… You start talking with
the owner and you find out that they owe $20,000 in
back taxes on the house. Well, you’re just gonna treat
it just like anything else. You’re gonna start with
your wholesaling calculator, whatever you’re marketing it is. So you’re essentially going to take away. And I’m gonna pull out my calculator here ’cause I’m not that smart, but I’m keeping the numbers round just for you. A $100,000 house and we’re
gonna minus 30 percent, 30 percent is what you’re gonna
minus in an average market. Now, it might change in your market. Some wholesalers might do it different, but taking away the 30 percent
is what makes the house an actual deal to begin with. House is worth 100,000
fixed up, we’re gonna remove 30 percent, that leaves us with 70 grand. Let’s just say the repairs
on the house are 20,000. You’re gonna minus the repairs. Okay, so 70,000 minus 20,000
in repairs leaves 50 grand. And let’s just say you
as a wholesaler you want to make $10,000 assignment fee, right. So you’re gonna minus $10,000
and that’s gonna leave your maximum allowable
offer at $40,000, now right. But what we’re gonna do
is we’re not gonna offer 40, our first offer’s
gonna be minus 15 percent. So your first offer’s gonna
be around $34,000, okay. Now keep this in mind, the person told you that they already have a
mortgage balance of $20,000 or delinquent taxes of $20,000. They’re both interchangeable. They work the same, that’s why I’m just gonna do this one video. So, now you start your negotiation and let’s just say you offer $19,000. Well the reality is you could
offer whatever you want, but knowing this situation
if you offered $19,000 and the seller accepts,
the seller has to bring $1,000 to closing in order to wipe the encumbrances off
of the actual property so they can be transferred
to the new buyer. Now most sellers are not gonna do that. Not unless they’re in a
very, very sticky situation. It has happened, but it’s not likely. So let’s, let’s go back. Let’s just say the
repairs on this property were 40,000 and everything
goes 20,000 less. And you’re maximum allowable offer probably could only be $15,000. That means the seller’s gonna have to make up the difference between 15 and five. But in reality, this
property with the numbers we’re working with $100,000
ARV minus 30 percent, leaves us 70,000 minus
the repairs of $20,000, leaves 50,000 minus your assignment fee, leaves $40,000, okay. So with that being said, your maximum allowable offer is 40,000. There is an encumbrance on the title, which in this situation is
back taxes, which is 20. So let’s just say you and
the seller agree on 40,000. At the closing your
seller will walk away with roughly 20 grand and the other 20 grand will go to the back taxes
or the back mortgage or the mortgage balance that
is owed on the property. So it’s pretty simple. So the answer to the question is yes, you can wholesale a house
that has delinquent taxes or a mortgage, but your
offer usually or always has to be above what the balance is owed. And if you can’t agree to that term then you’re probably
not gonna have a deal. Now, I wanna break down the same scenario with my cell phone. For example, new iPhone 10 walks out. I walk into AT&T and I get
the phone on a payment plan. Let’s just say it’s $1,000
divided over 20 payments, okay. So let’s just say I’m halfway
through my payment plan and I decide to get a new phone. Okay, an Android phone. I don’t know why I would ever do that. Makes no sense, but
let’s just say I decide to get an Android phone. The balance on my phone is 500. And let’s just say J-Rock
wants to buy my iPhone. And he wants to buy it from me for $400. Well, the reality is I owe
AT&T $500 for this phone, so I will have to pay
the difference of $100 in order for me to sell
this phone to J-Rock so J-Rock can put his own
service in this phone. If I don’t pay that, then
AT&T will not clear the phone or unlock it and allow J-Rock
to put his service on it. But, if J-Rock offers
me $600 for the phone, 500 of it would go to AT&T
to pay them what I owe for the phone and $100
will go in my pocket. It’s exactly the same when
you’re wholesaling a house that has a mortgage or a tax
delinquent situation on it. All right, guys so that
pretty much is the answer to can I wholesale a house with a mortgage or a tax delinquent situation? Keep in mind if you’re
watching this video this far and you’ve learned something
please give it a like, a thumbs up, share it with a
friend that has this question and I’m glad I was able to answer it. Subscribe to my YouTube channel
and I’ll see you guys later. Peace.


  1. Regina Dyson says:

    So this has to happen before the property goes to the tax sale. If the property is purchased at the tax sale, the seller has a right of redemption period.

  2. Derek Bailey says:

    Great video! Signed up for the Facebook page also!

  3. Michael M says:

    I totally respected you until you said android phone. lol Such a helpful video.

  4. sure kleen says:


  5. Shylen Paris says:

    so wait the house is 100 30 % off is 70 minus 20 repair 20 mortgage so your left with 30 you sell for 40 and you get 10 is that correct? if not what am I missing? thanx

  6. Shylen Paris says:

    sorry I meant you make offer for 40 and sell it at what 50

  7. Shylen Paris says:

    sorry I meant you make offer for 40 and sell it at what 50

  8. Shylen Paris says:

    OK my bad I get it now your putting the mortgage or taxes into your offer dah I'm little tired I get it now that rocks I was worried about dealings like that but it's so simple now thanx

  9. Shawn Aaron says:

    Great explanation

  10. Moises The Entrepreneur says:

    Why wouldnt you switch from iphone to android, come on man. You carrying a iphone with samsung parts! Lol haha wow

  11. Mantraprenuer Network says:

    Office looks clean!

  12. Franklin Mcadams says:


  13. DaShonuff says:

    I was just thinking about this.

  14. Party says:

    Is that j-rock from trailer park boys?

  15. LUMJTV says:

    So, Am I taking my payment off the top?

  16. Jah Blu Art Store says:

    Yes we love this video at WWW ARTBEAUTYDECOR.COM

  17. Peter Duncan says:

    Max, you know Apple is not going to allow you to sell J-Rock your phone. Period! lol

  18. RealestRealist says:

    I can explain why you should get the Android telephone

  19. Crystal Salton says:

    @Max Maxwell you mentioned a Wholesale Calculator in the video, is this an app if so which one???

  20. Frankie Worth says:

    You low balled Android? Have to unsubscribe man now but seriously great video because I was looking at a property out here in Vegas and this was a thought I had in mind. Thanks for the great info vid!

  21. Nate Russ says:

    What's up Max! I'm currently looking at a tax list for an upcoming tax sale auction and I'm seeing something that says "judgement". What exactly is that?

  22. shershah mangal says:

    Thank you

  23. Platinum Rose says:

    🌹Super Helpful as always‼️ #encumbrances 💰

  24. Charles says:

    Got love for you Max. But you almost lost me tryna disrespect Androids. Lol. I'd never downgrade to an iPhone so I feel your loyalty. You tried it though 😂😂😂

  25. Mariah Sanchez says:

    Hey Max! Question for you. If I am looking at tax records from two years ago, how do I know that they haven't paid it off already? Instead of waisting their time and mine with a property that may be resolved. Do counties remove the notice once it has been paid? Or will it stay there as public record. Thanks!

  26. Auset Jackson says:

    The more I'm watching the more I'm understanding it. Peace and love to all…

  27. Sean Williams says:

    Your content is priceless brother!! I appreciate all that you do for everyone

  28. TMB1974 says:

    I just asked this same question. I didn't know tax "lien" properties could be wholesaled. Good stuff.

  29. Macy Camille says:

    I have a tricky situation, but I think I may have a good deal. I found a property on my city’s tax delinquent list, they owe more than the property’s worth atm…. it’s a fixer upper but the areas comps are amazing so I’m willing offer over what they owe a little. Is this a good idea? Should I contact them? I feel like I could work out a great deal with this one. Someone help!

  30. Brianna La'Sha says:

    😫nooooo. You're one of THOSE people?! Those Android hating people?! So disappointed lol. Good video! Needed to see this!

  31. Love Dove says:

    Good video!

  32. S Z says:

    Thanks Max brother

  33. Real Estate Lover says:

    Perfect examples couldn’t be more simpler

  34. ishinault35 says:

    Good vid.

  35. Ceeno Reason says:

    So is the 30% just for these type of properties?

  36. Alex Calderon says:

    Thanks max!

  37. IN MY THOUGHTS says:

    How are the taxes paid once the house is sold?

  38. A. P. says:

    Sensei Max teaching his students the art of never being broke again 😂😂 I hope I get to meet this guy soon

  39. Jermon C says:

    Damn this is a very informative straight to the point video many thanks for sharing.

  40. Terence Simpson says:

    firee content

  41. Jennifer Oviawe says:

    This is a great concept because you can just zero out in the transaction when it comes to the wholesaler/ seller transaction. But you can pick up the profit from when the wholesaler transaction. Very very intelligent. This is what I live for.

  42. Corina Torres says:

    Okay so the seller stays with 20k and the other 20k go towards the balance of mortgage- where do my 10k come from?

  43. Harold Fraction says:

    "Ziya Shakur: Made Myself a Boss" https://youtu.be/oSJueb1HL5E

  44. Marco Benitez says:

    Good shit

  45. kelofarrar says:

    This is GOLD!!!!!!!!!!!

  46. izz5946 says:

    Love the video appreciate you helping the people with knowledge, but had to give a dislike for the ANDROID comment.. smh really this explanation takes so long dont know how I can text it here.. first off there are many levels of Android many times iPhone lovers are referring to a cheap LG2 or Motorola from 2010 .. unlike apple Android favors all people worldwide in the 1st world and 3rd world countries they dont discriminate, Samsung has $1000 phones as well that you will disagree but Apple needs to make room too at times.. next apple is a learned behavior, world followers all doing the same, and it uses psychological mind games like making android text green.. that is an old psychology trick to almost make one feel exclusive is called mind programming.. about 4 years back apple would lock your number in there iTunes account and if you so happen to go back to android even out of an emergency with the same phone number apple would intercept your text since they had your phone number originally.. and so the old story was I never got the text…again making the user feel it was there android apple of course got sued for this.. and I wont get into the other 4 – 5 lawsuits.. I had an apple 7plus for just that 7 months worst experience ever.. I had my phone checked twice by outside authority to make sure it wasn't a bootleg .. and it wasn't I bought it at the Verizon store as well.. story is to long to speak of.. all I know is android has 1.. one, uno, 1 simple back button for 99% for the features unlike iPhone that has idk smh like 10 ways .. and again also there is no difficult to use or this sucks .. as they say of android and I would say of apple.. nothing is difficult its either familiar or NOT familiar.. so if you dont know something yes it will seem hard.. like someone not knowing this real estate game .. apple has imessage OK.. the one thing yes.. but these days there are dozens of apps that do do same that one can use dozens that take 34 seconds to download and open such as whatsapp used worldwide yet God forbid an apple user have to go through this daunting task… I could go on for ever but I will end by saying.. ask any I.T. software guy as in Eye Tee .. Tech.. that handle software for major companies… ive meet 3 that have all said they hate apple . Hmmmm a professional computer programming engineer type of tech… that do computer ALL day.. all have nothing good to say about apple… so yeah both have good and bad qualities.. but sorry Apple is more about Mind programming and learned behavior… as a professional in what you do… and someone who thinks outside the box and makes things happen I'm disappointed that you can be mind programmed by Apple .. like the rest of the USA… smh such followers .. but anyway love the video keep it up. Thanks… ps please dont block me 😆😉😁😊😉

  47. Maurice Clark says:

    That was a perfect simple explanation man thanks so much

  48. Brian Thomas says:

    short and simple, thanks Max.

  49. Robert Spry says:

    The information is awesome. I have been afraid because of scams and really no education on the subject. But know is the time. My time. Trust is a big factor for me. I can truly say i Trust your word. I am on my way by April i will have had my first deal completed. Thanks again

  50. Robert Spry says:

    I made a big mistake early. LOL. Maryland is a tax deed state. Amen!

  51. Roxann Solis says:

    what is a vendor lien and how do i get around it?

  52. topchoice32 says:

    the Note 9 is wayyyyyyy better than any iphone

  53. houzz afamasaga says:

    😂😂😂 finally got it. Appreciate you bradda for what you do. God bless

  54. Craig McDonald says:

    What if taxes are up to 60k… And Arv 200k

  55. Lamar Robbins says:

    My apologies, what again u
    Is the 30% discount???

  56. LoBlanco World says:

    Thanks for the formula!

  57. David w says:

    How would you structure that deal though, the same way you do a regular deal?

  58. Kandidly Kaypea says:

    What's wrong with android lol

  59. Shane Miller says:

    Great info!

  60. JWhite _whoRu says:


  61. Black Gold says:

    Thanks Max! I watched someone else's video on this and was bored and confused. You simplified it very well for me! Thank you for creating this video!

  62. Anthonyeddins423 Anthonyeddins423 says:

    Max Maxwell will I assign my contract for 50k to the investor buyer?

  63. Jess Kinzel says:

    Thank you Max!!! 🤗

  64. Porsha Edmun says:

    So the back taxes & the liens will come out of the purchase price ? Most times you don’t know what other liens are on there until title pulls

  65. ozmo69 says:

    What a great and clear video. Easy to understand. So if the house has both the Delinquent taxes and Mortgage then : then we have to consider both of those and then offer lil bit more off of that for the seller correct? and For Taxes we will have to deal with commissioner and for Mortgage we will have to deal with the sellers bank to finish process?

  66. Shawn Jackson says:

    Max can I wholesale a house that only one year behind in taxes?

  67. Black Gold says:

    To be clear, A house worth over $100K we do 30%? When do we use 70%?

  68. Dean says:

    Who would be stupid enough to pay a wholesaler $10,000 to discount their house 30 percent.. make no sense?

  69. mrsmorganvca says:

    Great video; well explained. QUESTION: When making an offer to the seller, should the number INCLUDE the encumbrance with the understanding that the lien amount will be deducted for lien satisfaction at closing? In this case, am I offering the seller $40k or $20k (Anyone's answer would be appreciated)?

  70. Joyce Cooper says:

    What is the 30% discount for

  71. Sharrell Lordeus says:

    More quick claim examples please

  72. Sela Love says:

    Pure gold !!! Thankyou Max

  73. Glimtj4ever says:

    Brilliant analogy! Great video as usual 👍🏾

  74. Rashad Wright says:

    Extremely helpful

  75. uneedmorepeople says:

    thank you

  76. Andres De Alencar says:

    Is the 20,000 deduction the taxes owed?

  77. WPLU572 Trunked Radio says:

    My mother is trying to sell her house in Connecticut which is in foreclosure. Connecticut is a judicial foreclosure State and the law day is coming up in about 20 days after being extended probably four times over the past two or three years that the case is going on. I'm wondering if there are any real advantages to her short selling the property if she can either pay off or reduce the tax debt particularly need to get the liens off the property? Because what happens to the liens after the bank takes title of the house on the law day when they go to themselves auction the house off does the fact that there are say $15,000 of tax liens owed to the state cloud the title?

  78. Devon Boone says:

    Maybe I’m just not good in math but how did you get 70,000 from 100,000-30%?

  79. Latorra Rhodes says:

    I thought (.70) was the percent for average market. Is that not so?

  80. Samantha Barnes says:

    Wait ✋🏾
    I would take an Android phone over iPhone ANYDAY 🤣😅😂
    But you gave great analogies. Thanks Max

  81. Nique and Simone squad says:

    what if you pay a tax lien on the house and the person do not pay for the taxes within the year. can you still sell the house

  82. Anthony Davis says:

    Much Appreciated

  83. Cam Selkirk says:

    I would LOVE to see more videos like this Max. Very informative and easy to understand when you break things down like that. Thank you so much for all your content

  84. Brandi White says:

    Omg thank you so much for this video. I’ve heard of this happening but I wasn’t completely sure how to approach it if it happened to me. Thank you for all you do!

  85. West P says:

    I have a question when it comes to the lien being paid does the title company take care of that or do we have to trust the seller to do the right think and pay it when they get the money ?

  86. Javier says:

    Would you have to pay off the entire mortgage or just pay what they are behind on ?
    For example: they have $100k left to pay on their mortgage but are behind say $10k in payments. Can I just pay those 10k and take over the remainder on the mortgage?

  87. Lina K says:

    Do you have any video on how to calculate ARV?

  88. Faegan Adams says:

    Great video! What’s the 30% for?

  89. Commodore McCrary says:

    Thank you for the nugget!! I sent you an email about a distressed home with a mortgage- this vid answered my questions

  90. Sylvester McFarland says:

    Question. So you would come to an agreement on the 40k with the seller. But in order for you to get your profit you will sell the property the buyer for 50k? And how do we get that 10k profit? Is it somewhere in the contract that we let that be known

  91. stanley henderson says:


  92. Fatimoh Jinadu says:

    Thank you for another great content. How do u calculate repair fees and determine After Repair Value(ARV)?

  93. Calvin Holbert says:

    When you break it down like that this type of situation seems really simple. Thanks for explaining this type of deal in the video.

  94. pouchy400 says:

    Great video

  95. naturalguy710 says:

    what happens if you purchase a tax lien for a house that you would claim as yours after a 1 year grace period passes without the owner paying you back…….but the owner has a mortgage on it and a bank is involved?

  96. Jay jay cruz says:

    In a nut shell just offer the home owner 40% of the ARV

  97. Alpkan Cakici says:

    Thanks for sharing Max.

  98. Dorian White says:

    Please help have a lead arv is 214k there is 132k mortgage still on the house and the seller wants 175k.. I want to wholesale it get under contract for 97k is this right or wrong

  99. Anthony B says:

    You rock bro

  100. Tequilla Slayden says:

    Great video!! thx

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