From Failures to Fortunes: Willie Masters’ Real Estate Journey Revealed

Dylan Silver (00:01.238)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, it’s my privilege to have real estate investor, tax lien and foreclosure specialist broker, real estate broker in Arizona, Willie Masters. Willie, welcome to the show.

Willie (00:20.808)
Hey there, Dylan. Glad to be here.

Dylan Silver (00:23.124)
It is a pleasure to have you. And I always like to start off at the top by asking folks how they got into the real estate space.

Willie (00:31.594)
I’m actually not surprised. I grew up playing Monopoly as a kid a lot and when I couldn’t play with others I played against the bank and I I would say that my most interesting experience with this was I was in junior college wanting to do real estate but not as an agent as a Investor and I wanted to find stuff make deal this kind of thing and I came to realize that there was no college that taught that

Dylan Silver (00:59.299)
Yep.

Willie (00:59.366)
So I dropped out of college. decided to go back. They were offering a real estate agent class and I thought, I’ll go back and learn something here. And at the beginning of the class, the teacher asked every student, what is your real estate experience? And at the time, three people said they bought their own home. I had nine properties and everybody was like, woo.

And I failed every test. got an F on every test, and I dropped it mid-semester because they were teaching me things I didn’t want to know about. I was going to make some deals, but that was not what the class was about. And so I was probably, at the time, the most successful person in the class, and I got an F on every test. I just dropped the class. It just was not mid-semester. It was not working for me.

Dylan Silver (01:50.008)
Well, you know what? I think I’ve spoken to quite a number of real estate folks on this show. There’s no clear indicator that having a degree makes you more successful. Really, I mean, at anything at this point is my perspective, but definitely in real estate. And then, you know, there’s some people who say, well, I just got my degree because I had kids and I wanted them to go to school. And then there’s other people who said, no, know, trades are the way to go and so on and so forth. But my vantage point is like.

There’s money to be made out here in the trades, in sales, in real estate, and whatever you’re doing, anything that you’re doing, I encourage as many people as possible to get into real estate. You don’t need a license. You don’t need to even have a giant portfolio, but it’s diversification, right? You got some money in the bank, got some money maybe in the market, and have maybe one or two rental properties. That can go a long way if you buy on hold.

Willie (02:42.442)
But there’s risk also. had a, as a lot of investors do, I had a collapse. I got into a fight with HUD. I was a half owner on a 26 unit apartment complex and they cleaned my butt. they, they, they, I’m really not sure how it all happened. To tell you the truth, I was younger and wasn’t so experienced yet, but

Dylan Silver (02:52.206)
Mm.

Willie (03:07.05)
They had seized my bank accounts, they seized my properties, and then after they took everything, they sued me for a million and a half dollars, drove me into bankruptcy. a lot of it was because I attempted to file a complaint on a lady at HUD who was, I thought, way out of her bounds. And that triggered a response that I didn’t like. But that’s what happened.

Dylan Silver (03:28.174)
Yeah.

Dylan Silver (03:34.364)
Become his personal in some way, you know?

Willie (03:36.264)
So I had to start back from scratch and things are going pretty well. Things are going pretty well.

Dylan Silver (03:40.908)
You know, one of the things that I’ve noticed about real estate operators is you have to have like a recency memory bias, you know, because if you think about everything in the long term, then these things can become like doomsday, like, you know, what’s going to happen in the future? Or you just talked about going through, you know, financial hardship and, you know, having, you know, litigation. It can be incredibly overwhelming. But at the same point in time, it’s I’ve had a mentor tell me like, stop worrying about

Willie (03:51.273)
Yeah.

Dylan Silver (04:10.24)
you know, could happen with everything one foot in front of the other, you know, these things happen, you’re in real estate, legal happens, you you kind of have to understand that that’s a risk when you’re getting involved.

Willie (04:22.41)
There’s no such thing as success within the circle of comfortability. And although I did not graduate college, I do claim to have a PhD in the School of Hard Knocks. So I have learned to be smarter, wiser. I have been educated by myself and the world. They will educate you if you don’t educate yourself.

Dylan Silver (04:28.162)
Yeah, that doesn’t…

Dylan Silver (04:46.723)
Yep.

Willie (04:46.794)
So I move smarter, a little quicker now and safer. don’t, I’m not as risky. I don’t take as much risk and I don’t think I need to based on what I’m doing. There’s not much risk at all. In fact, there’s hardly any.

Dylan Silver (05:02.848)
Now, I want to talk about being a broker and then also you mentioned before hopping on here, you kind of old school in the new school, old school in the new school, not promoting a website. A lot of your business is really old school and I think everybody else is moving a different way, but you have such strong connections and well established that you’re able to operate effectively. And then you’re also working in the tax lien space, which is an interesting niche to be in as well.

Willie (05:31.326)
Well, let me say this. In business, you learn to make money, but there’s another way to make money also, and that’s by saving it. And so as I was starting to collect these properties, I realized that I could save money by becoming an agent. Because I could then list my own properties for sale and get them out there for the exposure. So I became an agent not to become an agent, but to

to increase my bottom line by saving money. this year my broker, I’ve changed brokers a few times for different reasons, but this year my broker was retiring and said, you need to move your license or become your own broker. And I saw becoming my own broker as another way to save money.

not because I want to become a broker. even though I’m a broker, I don’t have any agents under me. I’m not looking to hire any agents. I don’t want the liability or the responsibility. I have to do my own thing. a lot of my moves over the last five, seven years has been, and that’s with attorneys as well, is reducing my costs.

to increase the bottom line. I’ve done a lot to do that. And when you say old school, I represent clients maybe once, twice a year at the most, people I might know. But 100 % of my business at this point is all from properties I get through tax lien foreclosures.

Dylan Silver (06:52.673)
I said.

Dylan Silver (07:08.748)
Now, tax lien foreclosures, I’m gonna break this down for people who might not be familiar and you’ll help me with this. you have your mortgage, right, which is a lien, and then you have the taxes which you pay. And as far as I’m aware, every state has property taxes that you’re paying on your house.

Willie (07:24.34)
Correct, correct. let me give just a little background for your people here. Property taxes are considered a superior lien over every other type of lien. And every county in the United States needs the tax money. so every state has laws regarding taxes and foreclosures. And there’s two different types of states. There’s tax lien states.

and tax deed states. And the tax deed states are an investor buys a lien and they take it through the process after a period of time and it goes to a public auction. Tax lien states may have some of that or may not. In Arizona, if you go through the foreclosure process, it does not go to a public auction.

So you have the great opportunity to actually become owner of the property. And so that has attracted most of the people that buy tax liens in Arizona are from outside Arizona, money managers, other big investors. You know, I’m a local guy who, but this is a hundred percent my job is tax liens and tax lien foreclosures. I,

Dylan Silver (08:23.235)
Hmm.

Dylan Silver (08:40.44)
So let’s get granular. Let’s talk about how you’re finding these. So in Texas, we have like Texas Tuesday, we call it because it’s first Tuesday of every month. However many counties there are in Texas, you 200 plus and you’ve got the foreclosure auction. You’ve got the tax lien side, which is typically run by the sheriffs. And then you’ve got just what seems like a gaggle of other people showing up for all the for the people who are delinquent on their mortgage. But you’re mentioning a different scenario than you’ve got in Arizona, right?

Willie (09:04.692)
But those are public auctions. Okay, you are competing with people that got money. Big investors, people that can outbid you. So it’s harder to get a good deal there. In the tax lien foreclosure world in Arizona, there’s no competition. Once you get the lien and you’re going through the foreclosure, it does not go to public auction. You’re not competing against somebody to get the property.

Dylan Silver (09:20.013)
Yeah.

Willie (09:33.578)
unless you hit like any sharks like I was telling you about. otherwise, a judge rules and the property is yours. So whatever property you get with the equity there, it’s all yours. It’s all yours.

Dylan Silver (09:45.772)
So let’s get a little granular. How are you finding these properties, and then how are you putting an offer on them?

Willie (09:53.436)
Okay, in Arizona what happens is in February every year the counties hold a public auction for the liens. And you don’t bid on the amount, you bid on the interest rate. It starts at 16%. And the person that’s willing to take the least interest is the winner. And the rates now are typically down to 0 to 3 % because of competition.

So I bid 0%. Now it’s possible I might get something above that because somebody stopped, another bidder stopped at 4 % or 2%. But most of my liens I get are 0%.

And I don’t get everything I bid on, which tells me that there’s other people bidding at 0 % also. So what are you doing? You’re buying a lien at 0%. So if the owner pays it off, you make nothing. Nothing. And as funny as this sounds, this is the only business I know that when you get a check in the mail, you’re sad.

Dylan Silver (11:04.43)
So you want the house. Yeah. And so when you’re making these offers, it’s with

Willie (11:04.52)
because you don’t want the check. You want the property. So every.

Look this. These are all checks I got this month from people paying off their taxes. Disappointing. They have three years before the foreclosure starts. And once the foreclosure starts, if they pay off their property taxes, they also owe all the attorney fees. So it’s pretty typical in the first six to eight months after an auction in February. I probably get checks to pay off

Dylan Silver (11:20.056)
from the people who were building it. How long do they have to do that?

Willie (11:45.226)
25 to 30 % of the liens that I purchased.

Dylan Silver (11:49.112)
So then at that point, what happens? You’re, guess it’s a wash, right?

Willie (11:52.234)
I’m out. Yeah, well, I lose because it costs $10 per lien to buy but the people don’t pay I don’t get that $10 we in birth. So that’s a loss the idea. This is a long game the idea is that you will eventually get properties enough to cover those losses throughout the three years when people pay off their taxes and

Dylan Silver (11:58.947)
Mm.

Dylan Silver (12:16.46)
Do they have a redemption period? Like a two year something or other after it goes?

Willie (12:19.914)
In Arizona, you have three years once the foreclosure starts. The attorney can take six to nine, 12 months to do the foreclosure. You can pay it off during that time as well. So you got four years after it’s sold. And then once the property is given to you by a judge and you are now the owner, Arizona law does allow them to come back up to one year and get their property back if

they were not personally served because sometimes we can’t find somebody and so the service is by publication. I’ve had that done one time and I got a condo. the only condo I’ve ever gotten and it already had a tenant who was paying rent. So I actually got this condo and I collected rent for three months before the guy sued to get it back and he had to pay

Dylan Silver (12:51.332)
Dylan Silver (13:00.481)
Mmm.

Willie (13:17.37)
all my costs, all my attorney costs, all his attorney costs, and he got the property back. But if he wasn’t dodging service, so we had to publicize it, he wouldn’t have got it back, but he did. And he paid a lot more than he would have had to pay if he just paid his taxes.

Dylan Silver (13:25.42)
Wow.

Dylan Silver (13:36.024)
You know, so this goes to just how regional real estate is. And I’ve talked about this on other podcasts, but if you’re, you know, active in Arizona, you’re competing with people who have who have subject matter knowledge based on these specific rules, right? And so talking about bidding on the interest rate of the liens, totally different system than than everywhere else. Are you seeing people from out of state come in state and do this process or because it’s so regional?

Willie (13:51.806)
Great.

Willie (14:01.64)
Yes. Yes, I do track the statistics of the people who are the big players in these auctions. you do get a lot of, you know, it’s funny because not only money managers, but banks use front companies to buy tax liens because if they get a foreclosure, they don’t want to scar the name of the bank.

saying they took property from somebody. they actually have holding companies that they use to buy tax liens. And it’s great safe investment for them to park money at an interest rate higher than they’re paying at savings. So if they are taking your money and putting it in savings, and they’re paying you 1%, and they turn around and buy tax liens at 5 to 16%,

They’re making money on your money. They’re doing it.

Dylan Silver (14:55.168)
Now if they don’t, if of course most of these people aren’t gonna get current, right, so the bank is then gonna be responsible for the property, is that the business, I I imagine it’s kind of a unique niche thing for a bank to be involved in. Are they then selling it immediately? What’s their strategy?

Willie (15:10.474)
Yeah, they turn around and sell it for profit. And let me give you, I got some statistics here for you I thought you might like from my business here, okay? I started in May, I started doing foreclosure. I was buying liens in 2016. My foreclosure started in 2019, okay? So from 2019 to today, I have gotten 280 properties.

Dylan Silver (15:13.998)
Okay.

Dylan Silver (15:17.614)
Yeah, let’s do it.

Willie (15:40.074)
11 so far this year and I have 33 currently in foreclosure and You know, it sounds exciting Wow 280 properties that’s a lot but These aren’t all houses and condos. These are mostly small cheap lots and land and so I have You know if things worth seven to twelve thirteen thousand

Dylan Silver (15:52.952)
Yeah.

Dylan Silver (16:02.156)
Hmm.

Willie (16:10.096)
is what I typically get because that’s what people typically don’t care about and let it go or it gets lost.

Dylan Silver (16:16.568)
So yeah, why, I mean, I understand maybe the probate airs, that type of thing. Is there ever a case where you’re coming across people who have equity in like an infill lot and they just, whatever, they don’t sell it with a license for some reason and it comes across.

Willie (16:31.338)
I printed out my biggest score ever that happened this year. This is my escrow checks, okay? Is that number there?

Dylan Silver (16:40.002)
Yeah.

It’s blurry on my screen, but it’s only because we’re buffering here. You’ll have to read it for me.

Willie (16:47.793)
Oh. $288,078. And I got a $9,000 commission also as an agent on that property that I sold for myself.

Dylan Silver (16:50.606)
288,000.

Dylan Silver (16:57.196)
What was that? Describe that deal to us.

Willie (16:59.626)
It was 80 acres of farmland that was owned by 34 people and Years ago there was you know some people that owned it and they passed it their family and then their family Half the 34 people were dead Nobody was paying property taxes because they can’t do anything with it And so this was probably my attorney said this was his most complicated case he ever ever did

Dylan Silver (17:06.217)
yeah.

Willie (17:25.354)
But it was 80 acres and I sold it to the neighbor who owned 250 acres. And so, no, 2,500 acres. And so he now owns a bunch more acreage. So I get scores. Every now and then I get a score.

Dylan Silver (17:38.254)
So in a deal like that, in a deal like that where you have so many heirs, But it’s in a foreclosure, it’s in a status where the tax lien is delinquent. Is the attorney then still having to get the heirs to sign off on it for any reason or because they’re not paying on it once it goes to foreclosure effectively?

Willie (17:54.888)
Right.

Willie (18:02.769)
Well, in this case, most of them, he found some that were dead, he found some that were alive and had them served, and some he had to do by publication. yeah, and the publications typically happen in some obscure Chinese or Jewish newspaper. Nobody’s gonna see it anyway. But it still meets the criteria for the law. know, people don’t read the paper much these days anyway.

Dylan Silver (18:13.39)
I got you, so it was a survey. Okay.

Dylan Silver (18:25.6)
all.

Willie (18:31.272)
So it’s

Dylan Silver (18:32.044)
I’ve seen that happen out here, know, in Texas when we have these auctions. I swear there’s people, shouldn’t say swear, but I firmly believe there’s people coming out to some of the auctions who don’t even want the people to know that an auction’s happening. They just like hop out of a car, I’ve seen this happen, hop out of a car, read a little thing off, no one bids and then they’re out. I’m like, was that, did he just try to auction off a house? And it’s because, you know, they’ve got some guideline that says they have to, you know, announce it at least. And so…

Willie (18:57.769)
Right.

Dylan Silver (18:58.886)
That does happen. you know, so many heirs, you’re talking about this deal, 80 acres, right? You know, I think for people who don’t have an attorney or someone that they’re working with and they’re trying to sort it out themselves, I mean, I’ve certainly gone down that route and seen that it’s incredibly complicated. So I think I at least I at least think it’s it’s beneficial. It’s of course very expensive, but it’s beneficial to be working with an attorney who’s who’s very knowledgeable in, you know, real estate law.

Willie (19:16.947)
It is.

Willie (19:27.932)
Right. And you know, there are complications and probably the complications that

try to get me the most here is legal descriptions on properties because you have to have the proper legal description and on some of these different lots and lands that I get the attorney used the wrong one or something was missing and so the assessor’s office won’t transfer ownership to me.

Dylan Silver (19:41.795)
Yeah.

Willie (19:58.364)
So they have to go back and reopen the case and get that corrected and then, you know, reclosed and new deed issued. But I am now.

doing a lot of that front work for the attorney to clarify, identify all that stuff and give, I do the title searches, either myself or use title companies to get me title reports. So because there’s sometimes they miss people because the software they use isn’t as good as perhaps an escrow company.

Dylan Silver (20:21.006)
Yeah.

Willie (20:31.408)
And sometimes escrow companies make mistakes too. So I try to vet all that stuff before and turn it over to the attorney with all the information they need to file the complaint. So these are all things I’ve learned to try to mitigate time or costs on a project. And so it does get involved. And so that’s why this is now my full-time job. Let me tell you.

Dylan Silver (20:56.876)
Yeah, I can imagine.

Willie (20:58.162)
Let me tell your investor people here something I thought was my biggest.

way of operating here. When I moved to Arizona, I had a couple bad real estate deals and this whole thing with HUD that cleaned me out. So I didn’t really have any starting capital, but what I did was I converted my 401k into a self-directed 401k Roth. So by doing that,

I took, I’m no longer going online to manage my allocations to funds and so forth through some brokerage. I actually have checkbook control of my 401k. And I use my 401k to buy these tax liens. And the 401k forecloses with the attorneys through these tax liens. And so then when my 401k gets the property,

I as an agent represent this entity to sell the property and I can pick my own commissions whatever I want. And so I live pretty cheaply so that I don’t take on debt except for business stuff and I use, just recirculate that money to grow as fast as possible. I don’t live extravagantly at all.

Dylan Silver (22:07.843)
Mm.

Willie (22:24.912)
I’m sure my lifestyle could be better, but it’ll take capital out of my operating. And I’m in a growth mode because I’ve got a little behind because these past bad deals. But I have six children and 13 grandchildren. I want to leave them something.

Dylan Silver (22:33.932)
Yeah.

Dylan Silver (22:37.922)
leave them some. I mean, the self-directed thing is huge. And I’ve had a couple people who do, you know, self-directed IRAs in real estate. I forget the exact term. It might just be called like a real estate Roth or something like this. But you’re using, you know, basically retirement funds to buy certain assets. Now, from my understanding, I don’t think it varies state by state, although it might. From my understanding, it can’t be an active business, meaning you can’t be actively

Willie (22:42.121)
Yeah.

Willie (22:51.786)
Right.

Dylan Silver (23:07.372)
You know, you yourself being a major operator and has to be some level removed, arm’s length or passive in some way was my understanding, but it’s very

Willie (23:14.698)
In some types of some types of things yes with this no I have checked but I have the checkbook I can write I can do write checks I can make deposits so and really how it’s supposed to be set up is that your 401k owns an LLC and Your LLC is the one doing the operating But I the way I had mine set up originally which probably doesn’t

Dylan Silver (23:25.39)
Mm-hmm.

Willie (23:42.686)
probably can’t happen today. I have a business account as my 401k and I actively write checks and do wires and do deposits. Every time I get tax lien checks, I redeposit them back into my 401k account. I use that to purchase liens, but you have a lot more flexibility and capital if you convert your traditional into a, you know, something that,

you can have a lot more flexibility. Absolutely. And it has grown quite well.

Dylan Silver (24:10.156)
You can use real estate. Yeah.

Willie, we are coming up on time here. Where can folks go to learn more about your business to get in contact with you?

Willie (24:24.442)
Every county is different. The state laws are the same, but every county operates differently. So I would recommend they go to their county treasurer and see how they handle their tax liens.

That’s the best place to start on the county treasurer websites. You want to make them your friends. know pretty well the county treasurer staff in five or six different counties in Arizona. And I use them, they help me a lot in my business. And I drop donuts or whatever. You can buy some love in this business and they’re the ones that can really help you out quite a bit. Them and the recorders and the assessors.

You need to be friends with all of them because they will help you. They will help you. That’s the relationships you’re building. And as an agent, most real estate agents do not enter this business. This is a very niche business because this is not a quick money thing.

you are not getting commissions and pay in a month or two and they all have bills to pay so they can’t do that but I have no debt except for credit lines I use to buy tax liens and as I get checks in I pay them back off and so

Dylan Silver (25:21.292)
Right.

Willie (25:37.758)
But I’ve got with all these, with these 33 foreclosures currently happening, I’ll probably get 30 of them. By the time I get to this point, I’ve worked my stuff so well that I have a pretty high rate of success. But it’s not a passive thing. You know, got to really work it, but you have to get tax liens or else you have no standing to get anything. So that’s.

Dylan Silver (26:02.54)
Yeah, you know, it’s a strategy that requires some level of expertise for sure. know, having that attorney is definitely, I would say, maybe a must have. you know, I think, you know, this is such a niche space. It’s interesting to talk to folks like yourself. I don’t know if I’ve got the subject matter expertise to dive into it myself, but maybe at some point down the line I will if I have more of these conversations. Willie?

It was a pleasure having you on the show here today. Congrats on all your success and to your continued success.

Willie (26:33.354)
One thing I would be aware of people when they’re buying tax liens, the assessor’s office, when they split things up into parcels, they create a lot of junk parcels. And people buy the tax liens on these junk parcels and they lose their money because what are you going do with a sliver of a sidewalk or an alley or a piece of the street? mean, there really is a lot of garbage or water retention.

corners. mean, you got to be careful and make sure you do some homework because you can lose your money if you’re not careful. And some money managers have gone out of business because they bought tax liens. Woohoo! And they got a load of crap. So you got to be careful. But it’s a good business. It’s a long game, but it can certainly pay off. Absolutely.

Dylan Silver (27:18.306)
the wrong thing sidewalk

Dylan Silver (27:29.09)
Well, Willie, thank you so much for coming on here today.

Willie (27:31.624)
You betcha! Enjoy! Go make some money!