Unlocking Wealth: Julio Berger’s Secrets to Tax Deed Auctions

Dylan Silver (00:01.104)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, it’s my privilege to have Julio Berger, based out of the Houston area, does a lot in leans, if I’m not mistaken. And Julio, it’s a pleasure to have you here.

Julio (00:05.678)
The pleasure is mine, Dylan. Thank you very much for having me here in the show.

Dylan Silver (00:22.33)
You know, I always like to start off at the top about asking folks how they got into the real estate space. And you’re involved in a very niche area in liens, right? So let’s talk about that and how you got into this space.

Julio (00:35.374)
So actually I’m in links and most of all in deeds. I do tax deeds purchase like as like the main source of acquisition. But my background, I came from the financial market, been 20 years in the bank, bank industry. Brazil, then US, we opened like a FinTech here in US. I was one of the first employers. And as a side hustle, I was always on the real estate.

He’s been part of the game for me for a long time, pretty much like 20 years on real estate. Then last year, I became like what you could say, a full-time investor or a full-time on market for the real estate. And that’s where the real journey began. He’s been, he’s been awesome.

Dylan Silver (01:20.252)
So let’s talk, you know, we’re both in Texas, I’m in Dallas, I’m a real estate agent by trade, but I’m really passionate about real estate wholesale, and that’s really where most of my experience has been. I’m a newly licensed agent. So we have an interesting state. don’t know if they call it deed theory, I should probably know since I’m an agent, but you know, let’s talk about on a granular level what it is that you’re purchasing when you’re going after an acquisition in your business.

Julio (01:50.039)
So how does it work usually? We have a whole structure where we try to acquire properties over tax foreclosure, tax deeds. And here in Texas, we have all the counties, do auctions for tax default. So when you’re defoling your taxes, they have a big auction. And then you can purchase the property starting by the amount of tax due.

And we have that like multiple, multiple states. So for example, we, we acquire properties in Florida, North Carolina, here in Texas, or have Arkansas, Connecticut now. So multiple states have this structure or where we can acquire the property over a tax sale, right? Or a tax deed sale as you call.

Dylan Silver (02:41.148)
And so, you know, when I think about this space, I think about how my involvement in it, I don’t know if you’re familiar with the Roddy Report, right? This is like the foreclosure report that a lot of investors will get for people, not for taxes, but for all folks who are heading into foreclosure. We call it like Texas Tuesday, the first Tuesday of every month in front of the county courthouse steps, right? And so when you’re looking for, you know, your tax delinquent folks, are you…

Julio (02:52.268)
Mm-hmm.

Julio (03:04.748)
Let’s go.

Dylan Silver (03:11.44)
mainly looking for, what’s going to be ending up at the auction? Are you trying to get it before it goes to the auction? What’s your process like?

Julio (03:19.361)
So we start to create like a structure vertical where we are trying to reach before option, this group, right? But as any other business, you need to have like some kind of focus on what we’re doing, right? So we were not very efficient on this process. That’s really a very nice strategy if you are a wholesaler and you know the team, you know the process, you know how to approach.

So we don’t have these expertise for that. What we have the expertise for is we do the research, we can find the properties like in different counties, in different places. We can do all the assessment as the value. So these parts become, the final part is pretty much the same as a wholesaler would do, right? We do our research and then we acquire the property. The biggest difference here for us who are wholesaler,

we do acquire the property in cash on the time of the sale, right? So there is no paper trade, there is nothing in between in the middle. There is almost way we can say, okay, I just got the property now I’m try to resell it. We have to hop on the opportunity as it presents itself. In 99 % of the cases, you need to have like cash on the spot. In our power Tuesday here in Texas, know, like you can go with a bag of cash on the courthouse and say, here.

Is the money give me the deed next day you have the deed and you start the process

Dylan Silver (04:46.992)
So, you know, in this process that we’re talking about, know, bidding at the auctions, you’re bidding against other people. So when you’re going into it, I’m imagining you have a couple properties or maybe several that you’re looking at and you’re saying, okay, well, this is gonna be our max bid on these properties. What kind of diligence are you doing on the properties themselves that you’re gonna be bidding on? What does that process look for you?

Julio (05:07.819)
That’s a great great point Dylan. So let me explain a little bit of the process I think is nice to understand, right? So the first step of everything is we need to find like the rules for each auction, right? Every single county Like everything states sometimes every single county in the same state has different rules What kind of leads stay what kind of leads doesn’t stay so it’s very important you have like your team? Knowing what they’re doing second thing is okay, let’s

jump on get the list of the scani see exactly what kind of properties are going to the auction there is a lot of land that goes to the auction that is house that goes to the auction right i mainly work with houses i have very little land right but you have both on the auctions you have a commercial you have a residential so you have to do it the business okay what kind of niche do i want to work with then you go to the next next phases like try to

get a completely understanding of the property is really that property. So you get the list, try to get the appraisal district. We have a lot of other softwares that help us out to type the property properly to know, this property for these options is actually this property. Then you can go to like FEMA and see flood zones if they have update anything. So there’s a floodway is you see on the appraisal and logs if it’s the land.

Dylan Silver (06:24.133)
of Zonia.

Julio (06:32.266)
So there’s a lot of like, do delete that you’re doing this process. Then you move to the next step. Okay, I got the list. I know the rules. I got the properties. I remove everything that is garbage for the list. Now let’s see what here has value, right? So I sent to the team. So I have people that are doing pretty much like the comps for every single property that goes to the auction. And they say, okay, this property, if we fix it up is this amount.

If you’re going to try to sell it for a wholesaler, OK, the wholesaler will pay that amount. So based on this strategy and the kind of property that you say, OK, let’s move on to try to create what will be the next bid, our max bid. Before we go to the next bid, the max bid, we have two more steps in the process. First, we have to do a search, a link search in the property. Even though we are talking about a text sale,

we have several links that sustain the property, So, municipal, state, federal, they have, of course, it rules depending on the auction, right, in the county. in a good way, do I say you have to do this research? And by the last part, I always buy a property or with all the scenarios, I would never buy anything unseen.

So even though I work in like many different states, we have our ecosystem in this state. So somebody is gonna go there to check the property. So have like at least a basic assessment as like, okay, the roof is pretty good or is in a really bad condition. it still has AC, the AC is gone. So the foundation, the house is like 45 degrees. So, okay, nevermind. So you’re do all this assessment, right? Let’s define.

Dylan Silver (08:25.413)
Yeah.

Julio (08:28.649)
Oh, this is pretty good. No, this doesn’t work. Then you get this assessment from the properties. Then you come back to the table and say, okay, so I’m working on, let’s say on Florida. I’m in Orange County. So by the way, for example, in Orange County, I bought a very nice house in the past that used to belong to Wesley Snipes. I can tell that later in the process. But anyway, so.

Dylan Silver (08:51.9)
Mm.

Julio (08:56.073)
you look at the reviews for the people on the ground say, okay, so this will be like a medium, light, heavy work conditions. So for sure, you’re need to change not only painting bathrooms, the kitchen, you need to redo the whole roof, you need new pipes for the AC, or it looks like that you can save here, and you can have like a good ballpark on the price, right? So.

Dylan Silver (09:21.254)
You know, so when you’re going into that process, you mentioned some of the things you don’t know all the time, like foundation, right? If it’s occupied, you might not know.

Julio (09:27.177)
Most of the time is occupied. Not most of the time, but a lot of the time is occupied. So you have to play with a safe gear on these options, right? It’s very important.

Dylan Silver (09:34.608)
Yeah.

Dylan Silver (09:41.456)
And so if you’re going into an auction, I you’re out there in Houston, I’m imagining, you know, you can’t get every property, right? But is there a set number you’re thinking, hey, I want to bid on, let’s say, however many properties and we hope to get a certain number of properties. Is there a metric that you have for that or is it different every auction?

Julio (09:58.565)
Now it’s different every auction and always depend on our clients, right? So I use most of my capital that I have deployed already and I work with a lot of clients, right? So what they do, we purchase the property for them and we do all the process, right? In a JV project, pretty much. So, right. So sometimes I have like a very nice pipeline. And then what I go is in this kind of auction, you cannot choose the property, right? So, you know,

the property that you can bid on, so on the list, and then you go from the first to the end. The one that get on your pipeline, that get the criteria and you are able to step on, you get it. The best deal is the first deal that is under your rules, You go past your criteria. Because sometimes if you get waiting for the next one, no, because the next one is better, the next one not gonna come, they’re gonna blow out on the price.

And most of the time you can go to the auction and you go back home with empty hands.

Dylan Silver (11:01.8)
on your you got to follow your your guidelines. I want to pivot a little bit, Julian, talk about raising capital, right? So banking, I’ve seen a lot of people in banking who are great capital raisers. And that’s your background, right? So you have a very unique business proposition, because you’re helping folks jv with people to acquire properties at auction. I actually, I’ve been aware of this, but I’ve not spoken to someone who does this. So when you’re looking for capital partners,

Is it something that they’re familiar with or are you having to explain what the process looks like to them?

Julio (11:39.378)
Well, we have many different kinds of clients, investors, right? cannot call it investors, right? We are not like an investment company. We are mainly a service company, right? We provide the services, the consulting and doing all the process, right? But it’s depending where you go or which people you talk with, they are going to be like, no, I know how it works.

Or what is it gonna say? How’s it work? What are you talking about? And then you have to go like baby steps from the beginning. Okay, so that’s how it works. You’re gonna have like, we are gonna acquire the property in your name and you go step by step until they understand what does make like how this can be good for them. But they can have like the property they have as like collateral. So they can be very, very safe in a safe net.

And when they work with people that know what they’re doing, right? So pretty much you got like a very good investments with asset behind protecting as a security. So in the end, works pretty well, I would say.

Dylan Silver (12:48.506)
Now, when I think about the auction, I think a lot of times they have distressed properties. these people that are acquiring them, if they’re JVing with you, I’m imagining there has to be some level of expertise in being a contractor between both parties or you’re hiring it out. How does that process work? Are you doing the flips yourselves? Are you doing some type of a whole tail situation? How does the process generally work?

Julio (13:15.121)
So that’s a very good question as well. So in this scenario that we work with, I don’t know if you recall in the beginning, that we work with final and we host sales as well, right? So what happened is when we go to the auction, sometimes the opportunity presented itself can be like a very nice house or a very distressed house, right? I have both in portfolio. When you go like to a very nice house already, or what almost the right nows,

We’re going to do the basic lipstick on the house, painting, whatever, go to the market. When we go to a very heavy one, sometimes it’s worth it to split the route. So let’s say, for instance, we just acquire a very distressed house. Usually, these are one of the best. So at here, we have two scenarios. So first, if we are willing to get a distressed property,

we need to be willing to do the flip. So we need to have the team on board. So I have my own team, and I do have as well a lot of contractors and partnerships in the ecosystem that we work with. So OK, I send them all the properties. OK, this property we just acquired. We have the budget. give them, guys, see what you guys can do this. This is the idea.

If you have to change the layout or don’t have to change the layout, we send them all the information. And what happened is, so we’re going to have the first step. We do the cleanup of the house, the basic stuff. A lot of time, there’s a lot of junk in the house. And then between getting all the codes, see what we’re going to need, permits, requirements, we do a parallel process with, let’s talk with all the wholesalers that we know, all people that will be interested in this kind of property.

and see if the backstays for them. Because sometimes it’s worth it for us to do a very fast turnover on the property than doing the flip it. So we can play with both sides. So what we do is we start it, we do running parallel all the cleanups and then get all the quotes for the contractors in the area and for our team. And then parallel to that, we try to sell as is.

Dylan Silver (15:22.288)
Yeah.

Dylan Silver (15:39.0)
I’m privy to Houston. like Houston. I like Houston a lot. And the reason why is because of the price point. I’m shocked to see where the price points are at in Houston. I’m seeing them on the MLS, right? Or not on the MLS. I’m seeing them live on the market. I’m in Dallas, so don’t have MLS access. And then I’m also seeing, you know, if that’s the price where it is on Zillow, what’s the price like at these auctions? So I’m thinking this is really maybe one of the best, if not the best, places for, you know,

investors who are looking to get in to start as far as know, entry level points and pricing.

Julio (16:09.913)
Good luck.

Julio (16:14.765)
Now that’s agree 100 % right. So the Houston area is pretty good. Our account is around, they are pretty good, right? So we have a challenge in Texas because Texas is redimble state. So when we get a property on the auction, you need to wait for six months if it’s homestead property or rural, right? So there’s a of rules behind that, but you can get like very nice house.

for a good price, right? So we get like sometimes like less than 50%, like 50 cents on the dollar when you purchase a property here in the auctions and then goes across the country, right? Not only on Texas, right? Texas is good for the foreclosures as well. So you don’t have like this barrier. We just acquire a property on the bank foreclosure here and it’s doing pretty good.

Dylan Silver (17:07.729)
Julio, are actually coming up on time here. Where can folks go to get a hold of you if they’re interested in learning more about your business or in connecting with you?

Julio (17:16.847)
man, I appreciate. So you guys can follow us on Instagram, LinkedIn, and we have our website. you can go to the brigangroup.com, it’s our website. You can follow me on like berger.julio on Instagram or julio berger or brigangroup on the LinkedIn, right? So is there any place that we are more active? We show sometimes like…

While we get on the options, we do some papers on the LinkedIn from markets, market perspectives and all of those. So hope to see you guys over there.

Dylan Silver (17:53.702)
Yeah, Julio, it’s a pleasure to have you on the show here today. Congrats on all your success and to your continued success.

Julio (18:01.661)
Thanks, man. I really appreciate it, yeah.