Arnie Abramson’s Journey: From Novice to Texas Real Estate Powerhouse

Mike Hambright (00:01.25)
Hey everybody, welcome back to the show today. I’m here with Arnie Abramson, a good old friend of mine. We haven’t spoken in a long time. In fact, when I was recording the Flip Nerd podcast, when we started that back in 2012, Arnie was, we haven’t, I could go look it up. I don’t know the numbers right now, but probably in the first 10 guests we had on there. And Arnie really kind of has a niche carved out here that he’s been focused on for a long time in Texas. And that is foreclosures and share of sales and kind of on tap. It’s going to sound weird that I say that’s on tap, but I think.

Arnie is gonna show you some stats of how to find some of the very best deals that not a lot of people are working anymore. And that’s what we’re gonna talk about today. So Arnie, good to see you my friend.

Arnie Abramson (00:40.602)
Well, thank you. Thank you so much. It’s been a while, like you said.

Mike Hambright (00:43.968)
It has been a while. Yeah. Yeah. So, it’s kind of funny. You have, you make friendships and you have connections and, and I think because I’ve been podcasting for so long, of you’re in Dallas, the DFW market generally. So we got to know each other pretty early on in my career. started in 2008 and, so you have these relationships out there and truthfully, that’s one of the reasons why I really lean into the podcast right now is I have so many friendships and it’s easy to have years go by and not talk to anybody.

And I really just turned the podcast into a way to catch up with old friends and make new friends and things like that. It’s like, hey, if we’re going to chat, let’s go ahead and record it in the process and make some content too.

Arnie Abramson (01:23.004)
Well, you know, that’s interesting you say that because very often we have new members come in and they ask me, what do really like about this business? I say, it’s the people you meet. Because you have something in common with all the investors.

And you develop these relationships like, you know, I used to be in Dallas, in Dallas physically and go to the clubs and all that. And I haven’t talked to or been to some of these people in years, but like you and I, it’s like we never left. You know, like it was yesterday, those relationships there. And that’s a big part of what we do and what you do also.

Mike Hambright (01:53.058)
Yeah, that’s That’s right.

Mike Hambright (01:59.502)
Yeah, absolutely. Absolutely. Well, I’m glad you’re here. So I’m excited to talk about this. And I know you’ve got a unique angle on what you do here that I people are going to find interesting. Before we kind of jump into that, you have a rich history. been doing this for a long time and probably many different ways. But just give us a brief overview of your background and history as a real estate investor.

Arnie Abramson (02:24.538)
Well, it started in 2001. It’s when I moved to Dallas. And the very first, I went to a club meeting. the speaker there was talking about the various types of ways you can invest in real estate. And one of the things he mentioned was tax sales. And I was kind of nodding in the back of the room, falling asleep. And my wife gave me a little elbow and said, pay attention.

And after it was over, we went over to talk to this guy, and he was a guest speaker from Houston. And we talked to him, and there was another guy standing there who had just moved to Dallas. And he said, and we talked to him a little bit, his name was Bud Branstetter.

And I think he’s still out there doing this stuff, but he had done about 14 tax sales before he moved to Dallas and he came here for a dot com company and he didn’t have time, but he knew what to do. We had the time and didn’t know what to do.

So it was a perfect fit. We joined up with him and worked with him for two or three years and learned the tax sale business and that. And then we went out on our own because we wanted to expand it. And we went from there and started doing HUD foreclosures because that was new at the time. They had a big auction and we prepared for it. They had 200 properties.

And they gave you six weeks notice. And we went, I had a HUD key. We went and looked at every property, my wife and I had. And we went to the auction. It was so crowded, you could barely get in. we won one bid. But it was so successful, 90 days later, they had another one. We got four properties. And then 90 days later, they had another one. And Pat made a big mistake. She let me go without her. I bought 10 properties.

Mike Hambright (04:00.558)
I’m like

Arnie Abramson (04:23.904)
Well, back then, you win the bid, you have 30 days to get the financing. So it was okay to get whatever you need. And then we started doing VA for Colossus because they had financing built in, 10 % down and all that. And so we did that for years and years. And I looked around one day, several years later, probably about the time we were…

Mike Hambright (04:28.398)
out.

Arnie Abramson (04:47.044)
talking and I had an office of 10 employees. We were managing 300 properties and we had interest in most of them and I said this is not where I wanted to go. So we started getting out of it and going there and get and I said I just want to do two things. I’m going to play more golf and I want to teach people about tax sales because that’s something I really like.

Mike Hambright (04:59.532)
Yeah.

Arnie Abramson (05:14.268)
So after a while, we finally did it, and I started teaching people about tax sales, and a few people, and then a few people more, and a few people more. And I realized no one was teaching people. No one in the state was teaching people about it. So we started doing that. And we were going just to the Dallas and Fort Worth sales for years. And then about a very few years ago,

Mike Hambright (05:27.918)
you

Arnie Abramson (05:42.652)
Right before Dallas went online with their sales, we noticed it was a lot of new people coming in to bid. A lot of them were hedge funds. We knew that for a fact because one of them hired us to go bid for them and we were doing it. The more competition, the higher the prices went and the less great were the deals. So only at one point I said, we’re out of here. We’re no longer going to do

Mike Hambright (05:58.296)
Yeah.

Mike Hambright (06:07.16)
Mm-hmm.

Arnie Abramson (06:12.252)
We’re gonna go to the smaller communities. And it’s just, it’s gone crazy. We had a sale, what’s today, Friday, three days ago, Tuesday, always on the first Tuesday of the month. And we went to 20, we were in 20 counties.

Two of them got pulled, it just canceled at the last minute. So actively we bid in 18 different counties and one bids in 13 of them for our investors. We don’t do it for ourselves, only for our investors. We’re on the surface, right.

Mike Hambright (06:47.64)
you as a service now for other investors. Yeah. Well, before we before we of dive too far into working foreclosures, and so the couple of undertones here is you really kind of specialized in going in the kind of secondary and tertiary markets that are not as competitive, the hedge funds aren’t there. You don’t you show up and there’s like, you know, it’s not like a flea market, right? You kind of

And you got some insights into these counties that a lot of people just don’t. But before we kind of dive into that, talk a little bit about for those that might not know, you know, you’ve got the tax sales, which I think your nickname used to I don’t know if you still go by the sheriff, but we used to call you the sheriff. I don’t know where that came from, but I remember that because you were the you really were a tax sale expert in Texas and still are. And I you do a lot more foreclosure stuff. So just explain a little bit kind of high level how

the foreclosure sales work in Texas, and then a little bit about how the tax sale process works. It’s unique here as well.

Arnie Abramson (07:52.122)
Well, there are so many different types of foreclosures, you know, but the two main ones that we concentrate on are the tax sales and then we kind of label the others as something else because there are two or three different parts, but primarily they’re the trustee sales where the mortgage companies are foreclosing.

So the two that we concentrate on, the tax sales are where people, those auctions are for people who don’t pay their, don’t make their house payments. The trustee sales are where people don’t make their mortgage payments. Now, the prices today are such that everybody’s gotta have a mortgage. So there are more trustee sales coming.

than they used to be compared to the tax sales. the tax sales are very unique because they’re put on by the taxing authorities and there’s some caveats with the tax sale. Usually the bidding starts with the amount they owe in taxes and it goes up from there. Now when you buy the property at the tax sale, you get immediate ownership.

Mike Hambright (08:49.494)
Mm-hmm. Yeah.

Arnie Abramson (09:17.136)
But the old owner has two years in which he can buy it back. He can redeem it. Now this is Texas. All the states are different on how they handle that. But in Texas, they have two years in which they can redeem the property. And if they do, they have to pay you back what you paid for it, plus 25 % if it’s in the first year. If it’s in the second year, it’s 50%. Now.

Mike Hambright (09:17.806)
you know

Arnie Abramson (09:43.836)
That sounds so attractive and a lot of people come in for that, but the bottom line is less than 10 % of them get redeemed. And in reality, probably today less than 5%. Because look, if they don’t have the $12,000 they owe in back in their payments, and you buy it for $60,000, and it’s a $200,000 property, where they going to come up with $60,000 if they couldn’t come up with $12,000?

Mike Hambright (09:50.539)
Right.

Mike Hambright (09:55.182)
Mm.

Mike Hambright (10:09.688)
Right.

Arnie Abramson (10:12.206)
Now, a lot of people get this completely wrong that there’s a problem in Texas that the title insurance is not available for two years if you buy it at the tax sale. Most people think that has to do with redemption. It has nothing to do with redemption. because they both have two year, two year, everybody thinks that’s what it is. It really isn’t. It has nothing to do with it.

You are the owner when you buy it at the tax sale. You can evict whoever’s there. You can do whatever you want. You know, it’s your property. And a lot of people think, you gotta wait two years for you can do anything. Not true. Now, if you do improvements, if you do any work on the property…

You need to make sure that it’s in compliance with what the code says. And the code says, okay, you can do anything you need to do the property as long as it is to maintain, preserve, and safe keep the property. And that means that if you do some, if you take out the countertop and replace it with ebony or something, you know, that’s not to maintain, preserve, and safe keep the property. They would not have to reimburse you for that.

But if you’ve got a hole in the roof or something, the carpet’s worn out, all that stuff that you can prove that it’s to maintain, preserve, and safe keep, they have to pay you that plus 25 % as well. Now, so that’s one of the things that…

Mike Hambright (11:26.723)
Yeah.

Mike Hambright (11:39.342)
So most people that buy these, they tend to try to keep it simple, don’t make lot of improvements, just like maintain the property so that it’s operating. And they just generally rent it out for a couple of years. And then after that period’s over, then you can do whatever you want with it. Is that typically what most people are doing?

Arnie Abramson (11:53.232)
Well, I used to tell…

Arnie Abramson (12:01.648)
Well, I used to tell people, to really be the proper type of investor, you need to buy it and assume you’re going to have to keep it for two years. So you fix it up, you rent it out for two years, and two years later, it’s probably appreciated. You can increase the rent or you can sell it then, generally. Now, there are some people who will buy it without the title insurance.

Mike Hambright (12:18.626)
Right. Yeah.

Arnie Abramson (12:26.052)
Because when you buy it at the tax sale, it wipes out all liens except for government liens. So you can do little research. If there no government liens on it, OK, we’ll buy it. So there are all sorts of things. Now, the auctions, you need to know about the auctions. They’re all the same time.

Mike Hambright (12:40.514)
Right. Yeah.

Arnie Abramson (12:51.406)
Most of them are 10 o’clock in the morning on the first Tuesday of the month, summer in the afternoon, but most of them in the morning. And by the way, there are two exceptions to the first Tuesday of the month. If it’s on New Year’s Day or 4th of July, it’s going to be the next day, a Wednesday. Other than that, it’s always going to be on a Tuesday. And it’s an auction. Now some of them have gone online now.

Mike Hambright (13:10.446)
Yeah.

Arnie Abramson (13:16.474)
You want to hear something really crazy. Some of them are online and in person at the same time. That’s weird.

Mike Hambright (13:21.806)
Oh, wow. Yeah. So, Arne, let me ask you. you know, you and I were talking briefly up front and I was just, I had this general belief that foreclosure activity is down and partly because people have a lot of, you know, I think compared to 2008, 9, 10 in that range, more equity in their house. you know, one of the things that you said, which immediately I’m like, that makes sense, is housing is becoming, you know, less affordable because

Taxes are going up, insurance is going up. So yeah, maybe people have equity in their house, but the affordability is going down. Really nationwide, but in Texas for sure. mean, appreciation has been massive here. that’s a good thing from a wealth building standpoint, but that also means because taxes are so high in Texas, typically almost like 3 % of the value of property that as your house keeps appreciating,

Your taxes just keep going up, up, up, and it’s squeezing, you know, a lot of people, right?

Arnie Abramson (14:23.172)
Absolutely, that is true. And on top of that, you’ve got the trustee sales with the mortgage companies because most people who have a mortgage are going to have it escrowed with the mortgage company, The taxes escrowed. Not everybody. So you’ve got these two different…

Mike Hambright (14:41.432)
Right.

Arnie Abramson (14:48.54)
license where they’re for different reasons. A lot of people do not want to escrow it. They’ll say, I’ll pay the taxes myself. And that’s one market. But the trustee sale’s entirely different. First of all, there’s a big contrast. On the tax sales, who’s not getting the money? The counties. So the counties want to sell it. They want to put it out there and sell it. The trustee sale’s the exact opposite.

There was a house for 150,000, they loaned 75, 80 % of it five years ago. It’s now worth 450,000. They don’t want to sell it at an auction when somebody’s gonna buy it, they want to keep it. So they’re gonna make it much harder to find those sales. By law.

Mike Hambright (15:35.427)
Right.

Arnie Abramson (15:37.424)
The tax sales, they have to put them out there. They have to announce it. And we know where to go. There are three big law firms that do that. And they go to their websites. put them out 20 days before the sale. They have to post it. They put them on their bulletin boards is really what the law says on the 20th day. But most of them also post them online. The trustee sales, they make it difficult to find. They don’t want to sell them.

Mike Hambright (15:39.086)
We have to put this in there.

Mike Hambright (16:00.216)
Yeah.

Arnie Abramson (16:04.632)
And sometimes they’ll do them simultaneous, because they’re at the same place at the same times that this tax is. So they’ll do them at the same time so most people don’t know what’s going on.

Mike Hambright (16:12.482)
Yeah.

Mike Hambright (16:16.984)
Yeah. Would you say Arnie that over the last, in the time you’ve been doing this, even the, certainly the last five to 10 years that the counties are more aggressive with trying to push stuff to a sale to get that revenue? Cause they just want to get paid back, right? To get that revenue in quicker. Cause I, I do recall we’ve talked before I’ve been to a few sheriff sales a long time ago and it seems like there’s houses that are like, they’re like 10 years behind on taxes. And I’m like, why, why would they wait that long?

Do you feel like they’re more aggressive now? Because I think a lot of, honestly, lot of counties are broke too. They’re looking for revenue and it feels like they’ve gotten a little more sophisticated and they’re a little more timely with maybe doing things like this.

Arnie Abramson (17:00.08)
Well, they are, but here’s what most people don’t know is on the tax sale, before they can even list to be sold, they have to go and notify every person who has an equitable interest in that property and give them an opportunity to pay. Now, here’s what happens. Somebody dies and they can’t find all the…

Mike Hambright (17:02.638)
what most people don’t know.

Arnie Abramson (17:24.284)
They’ve got to go find every one of them and sometimes that takes weeks, months, years before they find them. And that’s really the big reason because if they don’t do that, then the sale can get boyed.

Mike Hambright (17:41.324)
Yeah, yeah. Okay, so let’s talk about so you you were working the main, you know, DFW market, which is like creeping up real fast here on 8 million people now big for Maine counties and huge population, lots of activity, but it was bringing in a lot of more sophisticated investors or quite frankly, unsophisticated investors that are paying too much hedge funds and institutional buyers.

Arnie Abramson (18:09.99)
Right.

Mike Hambright (18:09.998)
And you said, Hey, we’re just going to go focus on the kind of outlying counties and some of the secondary and tertiary markets. And you feel like that’s created a lot of opportunity for you and your clients because they’re just not worked as hard as the others that is that fair.

Arnie Abramson (18:25.276)
Well, I heard the other day somebody called me and said, do you think it’s true that in Dallas the average price of the tax sale is full retail value? I said, I don’t know. I don’t do them anymore. But I would not be surprised. Well, I can tell you is that for last month, for example, we bought properties in 13 different counties. And the average price is less than 50 % of assessed value.

Mike Hambright (18:40.717)
Yeah.

Mike Hambright (18:54.093)
Hmm.

Arnie Abramson (18:54.652)
in the smaller counties. And they’re growing like crazy. Salina, for example, as we were talking about earlier, fastest growing town or city in the United States last year. They went from 3,000 people in the year 2000. Wanna guess what they have now? 51,000.

Mike Hambright (18:57.294)
Yeah.

Mike Hambright (19:18.574)
What is it? Wow, almost 10X in 25 years.

Arnie Abramson (19:21.98)
But in the last two years, they went from 34,000 to 51,000 in the last two years. So.

Mike Hambright (19:28.258)
Yeah. Well, there’s so much development for those that are, that’s definitely squarely in the path of growth north of Dallas. you know, just for, just to get people perspective, south of that is Prosper, south of that is Frisco, south of that is Plano. And that same thing happened to Plano and Frisco and Prosper. And it just keeps kind of going north along with over there. Yeah. Yeah.

Arnie Abramson (19:48.092)
Of course. Of course. Well, I’ve got five little towns that I check. Anna, Forney, Hutto, Princeton, and Salina. And every one of them in the last two years. Some of them went up 50 % in the last two years. There are a lot of people moving out of the big cities into what used to be

Mike Hambright (19:59.383)
Yeah.

Mike Hambright (20:06.584)
Yeah.

Arnie Abramson (20:12.668)
the country, but these little country places are now growing and they’re becoming like a suburb or a ruburb as I call them, suburb. And, you know, like Princeton, just seven miles east of McKinney. Now McKinney, when I lived in Dallas 20 years ago, 25 years, McKinney was in the country. Now it’s part of Dallas, really. And it’s seven hours, I mean seven miles from Princeton that went from

Mike Hambright (20:20.236)
Yeah. Yeah.

Mike Hambright (20:34.36)
Right. Right, yeah.

Arnie Abramson (20:43.228)
And in 2020, 17,000 people now has 31,000.

Mike Hambright (20:48.066)
Yeah. Yeah. So, Arnie, for people that are listening now in terms of the opportunity to buy houses this way. And I know you you help a bunch of clients do this. So is this there’s probably an element of some people that might live in those counties or somewhere and they’re like, yeah, I like to get rentals here. There’s probably some people that are out of state and they’re like, I don’t I’m agnostic to where we get rentals that right, which then, of course, the challenge is getting them.

professionally managed in an outline area, which has some complications itself, I imagine. So who’s the avatar of the person that’s kind of buying, or who’s a couple of avatars of people that are buying at the foreclosure and tax sales and buying and outlining areas? who’s the avatar doing that?

Arnie Abramson (21:35.421)
We are the ones buying, we cover the whole state. And we’re gonna go and bid on behalf of people who can’t be in more than one place at a time. And so we will do.

Mike Hambright (21:39.096)
Right.

Mike Hambright (21:44.974)
Right, but the ultimate buyer like who is that? What does that person look like? The avatar of the person that wants to buy houses there that’s using you guys to bid on their behalf on who is that?

Arnie Abramson (21:49.371)
I’m sorry?

Arnie Abramson (21:55.356)
You know, I get asked questions like that about all the trash sales, all of these sales, all the time, and I have to say this, there are no such things as an average. You know, because they say, what’s the average price? What’s the average property? It could be a vacant lot, could be 140 acres, it could be a house that’s torn up, it can be occupied, and the same thing. There’s no such thing as an average, but…

Most of, we have investors that are big players, that want to buy a lot. And we also have a brand new investor that comes in and we will educate them. We have a whole training program and we can teach people exactly how to do it.

And if they would like, we’ll even get them to join us. And while they’re doing it for themselves, they go out to look in a county, well, here, look at this one and these other three while you’re there. And then we can market that. And we split the fees with them. So that’s kind of how we do that, is that they can learn and earn at the same time.

Mike Hambright (23:06.136)
Yeah.

Mike Hambright (23:10.754)
Yeah, and for folks that are buying these, I’m sure this differs from person to person, but if they’re generally gonna keep it as a rental for two years, obviously one of the most important things in a rental portfolio is having good property management. And that’s hard, just to be frank, even in town, in bigger areas, but in more rural areas, that takes a special kind of property manager that can manage across.

you know, lots of counties and manage more of that rural type property sometimes. So who is, who’s typically managing.

Arnie Abramson (23:37.51)
Yes.

Arnie Abramson (23:42.522)
We will find them property managers. We manage the managers for them. We’re not going to manage the property. And that’s why we’ll send you the business, because you’ve got a bunch of property managers available. So we like people like you.

Mike Hambright (23:47.99)
OK. Yeah.

Mike Hambright (24:05.869)
Yeah, yeah. So Arnie, I know you share a lot of provide a lot of training and stuff. You know, for me, I tell you, there’s two different times that I’ve been to the auction in Dallas County. Well, at least twice. But before we even started in real estate investment, we’re trying to get started. We didn’t know. So we went to the auction because we heard that that’s where you can get houses at. And we got some cashier’s checks, big checks, because you used to have to pay on the spot, at least.

Had no idea what we were doing. And it just, you know, we realized we were in over our head and that was in 2000. Honestly, that’s 2008, early 2008. And and part of it is like, you know, like you said, there were a couple. There’s information online. I’m sure there’s more information online today than it was back then, but there’s not a lot of places to go learn to.

for how to do this, right? I know you kind of educate people. Do you have a link or something you can share with us for folks to learn how to connect with you and your team?

Arnie Abramson (25:04.996)
Yeah, well, we have a website. Yeah, we have a website. It’s just like my email address. It’s txtaxsales.com. Txtaxsales.com.

Mike Hambright (25:17.08)
That’s good. Where were you in 2008 when I needed you? Well, I know you were here, but the educate and you probably even educate. Yeah, yeah, awesome. We’re going to add that link down below for folks to kind of go learn more about it so.

Arnie Abramson (25:20.892)
I was here. We would probably stay doing Dallas. We’d probably still do in Dallas then.

Arnie Abramson (25:36.206)
Sure, listen, I love phone calls. I love questions. So I’d like to give out my phone number if that’s acceptable. 214-869-7188. And that’s direct to me. That’s no, you know, if I don’t answer, that means I’m on the other phone. I’ll call you back, just leave a message.

Mike Hambright (25:41.059)
Yeah.

Mike Hambright (25:45.26)
Yeah, go ahead. Go ahead. Everybody get your pen ready.

Mike Hambright (26:01.708)
Yeah, yeah, great. Well, Arnie, thanks for sharing some some great info with us today.

Arnie Abramson (26:03.356)
Well, thank you for having me and it’s so exciting because you know our whole philosophy is we want everybody to win.

We want our investors to win. We want to win. And wherever possible, we want the people who have that house win. We help them sometimes. A lot of times, can make a deal and our investors will buy the property and owner finance it back for them. So there are lot of different ways to do this. so it’s so much fun because when everybody wins, everybody feels good.

Mike Hambright (26:33.853)
wow, yeah.

Mike Hambright (26:40.11)
Yeah.

Yeah, absolutely. Well, thanks for doing what you do, Arnie. I know you’ve been doing it for a long time and I appreciate those that have committed to helping other people and being a service provider and knowledge provider and all that because I know it’s sometimes it’s a thankless business. Sometimes you lay in bed and you’re like, why do I do all this? What am I doing this all for? And you know, you said you shifted your model to I know you had a big management company and all these things. And I was talking to somebody else recently on another podcast and

It was just after you’ve been in this business, I mean, we all got in this business to have financial freedom and time freedom, right? And I think even though there’s a number of folks that get that financial freedom, they don’t necessarily get that time freedom. And you start to realize I’m doing stuff that I don’t really want to do or that I don’t love. And there’s this thing that happens kind of in the back half of your career. Usually that’s like, well, I really just want to bring things in and focus on what I, I’ve done all this stuff and there’s a bunch of stuff I don’t want to do anymore.

So how do I focus on what I enjoy doing? And I think everybody listening just know that that’s coming. Like you should be constantly pruning the stuff that you don’t want to do. Cause there’s a lot of ways to make money in real estate. just talked about today and make sure you’re focused on the stuff that you do want to do. Yeah. Awesome. Awesome. Well, thanks again, Arnie and everybody. hope you got some great insights from today. Go check out Arnie’s website, txtaxsales.com. And you can learn more about how

Arnie Abramson (27:59.111)
Couldn’t have said it better.

Mike Hambright (28:11.682)
how you really kind of get educated on buying properties at the foreclosure auction or the tax sales. It’s unique in Texas and I know that’s what Arnie focuses on and he helps people do it too. if you get a chance, reach out to him and say hi. Appreciate you all. We’ll see you on the next show.

Arnie Abramson (28:26.364)
Thank you so much.