$2 Billion in Tax Liens: What Investors Get Wrong About Tax Lien Investing | Justin Weisenbacher

Justin Weisenbacher (00:00)

I will just cut it off at a certain number of people and say, our gold is closed, because I can’t support the people that we have. I want that individual to say, Hey, how do I compete against, J.P. Morgan or Fortress or all the big guys? What can I do? And I had to compete against J.P. Morgan. So I know I couldn’t beat them on cost of capital.

Yeah. So how would I beat them? So I swam around them. I knew exactly what their hot buttons are, and that’s what I’ll teach the individuals.

Quentin Edmonds (00:30)

Rich?

Hello, everyone. Welcome to the Real Estate Pros Podcast. I am your host, Q Edmonds, and I am excited to be here today. I have an amazing guest. And y’all know I love learning from people’s experience. And this gentleman has 30 years of experience. So this is gonna be good to listen to his journey, listen to his expertise. And now, this gentleman, I want to make sure I wrote this down right. This gentleman was the first to

Interinstitutionalize the tax lien business right now. He retired from the tax lien business, but also he has a new company that he launched that really helps and builds the school around tax lien. So it’s like he’s retired, but not retired. this guy just knows what he’s doing, he’s a ton of knowledge around this tax lien space. And so I’m so excited to introduce you all to Mr. Justin Weisenbacher How did I do, sir?

Justin Weisenbacher (01:58)

Weisenbacher

Quentin Edmonds (01:59)

I apologize. Weisenbacher. Mr. Justin, how are you doing today, sir?

Justin Weisenbacher (02:04)

I’m doing great. Thank you for having me on the show.

Quentin Edmonds (02:07)

Absolutely. So I’ma say this. I’ll probably say it again. Thank you for your time. I think time is our most precious commodity. And so I really value and appreciate you giving us some of your time. I really do. And so, Mr. Justin, sir, I really like to dive right in. So I would love for you to tell the people what’s your main focus these days. If you don’t mind, give us a little origin story, how you got to where you are now, like the roadblocks, the lead gear.

And then tell them where you are in the world. People love to know where people are geographically. And so, Mr. Justin, sir, you have the floor, my friend.

Justin Weisenbacher (02:39)

Okay, well, Justin Weisenbacher, I started a company called ⁠LienWatch.ai the history is I was one of the first to institutionalize the delinquent property tax lien business. So back in the 90s, and this was before Jersey City and New York City did their securitizations, this was a fragmented business. Mom and pop investors would go to their local county government, buy a tax lein

So we financed a company called Capital Asset. I worked for a mortgage rate. we gave them a $50 million credit facility, which they used up within a couple months. So then we needed capital. So we went to Lehman Brothers. We created a partnership and we had a $500 million senior credit line with Lehman. And we just took the business and rolled it out into many, many states.

So I learned the business from an institutional standpoint, banking, how to finance it. And then as the years went on, I created a division for a Fortune 500 company called Trans America. And then Aegon bought Trans America, they divested out of their finance businesses. And that’s when my company, American Tax Funding, bought the Trans America business. And we teamed up with a big bank and

I’ve purchased and serviced over $2 billion worth of delinquent property tax liens, 28 states. the business is broken down from tax liens, and then underneath it is tax deeds, and then a separate business is called redeemable deeds. And everyone has its own set of rules and regulations, and the business is by state. It’s very important for people to know every state is different. So when I

get asked questions, I always start with which state?

Quentin Edmonds (04:30)

Yes, sir. I love it, man. Thank you, sir. Thank you for taking me through the journey. if you don’t mind, Justin, where are you? Where are you located? where do you do business out of? Okay. Beautiful.

Justin Weisenbacher (04:37)

I’m in Florida. A lot

of the older entrepreneurs were all in Florida enjoying it. And I have to thank Learning AI for be able to create LienWatch so I can give it to individual investors and actually teach them how to swim around the tax lien business so they can get liens or deeds without the big institutional banks.

Competing against that.

Quentin Edmonds (05:02)

Yes, sir. No, I love it, Justin, man. Again, thank you for taking us through the journey, telling us how you got to where you are And so, Justin, I often say this destiny has no wasted moments. Right.

Justin Weisenbacher (05:14)

Mm-hmm.

Quentin Edmonds (05:15)

We’re learning from every leg of our journey. We’re learning from the success. We’re learning from the failure. And sometimes, this is how we settle into where we are because we’ve tried different things. We’ve had success, we’ve had errors, and things have drawn our passion. So we settled where we are. So I would love to know, Mr. Justin, 30 years of experience in this tech space. What has the journey revealed to you about yourself?

Has it made you more diligent? Has it made you more humble? Has it increased your tenacity? your journey, what has it revealed to you about you?

Justin Weisenbacher (06:24)

Well, that’s a very interesting question. and I really appreciate it. Thinking about the journey, I went from being the guy in the tower that nobody sees, nobody hears about. I would hide. And this journey is now doing my first podcast, which is interesting that I’m out, I’m in the public, I’m talking about a business that

back in the old days, nobody would talk about the business because we didn’t want word to get out. We didn’t want anybody to know that there was this niche business, no competition, 18% on waterfront properties, condos, houses. It was almost risk-free because in the state of Florida, it’s a cherry-pick business. Meaning, if I don’t want property A, I don’t have to bid on a property B, yes, I have to bid on it.

Quentin Edmonds (07:14)

Yeah.

Justin Weisenbacher (07:15)

And then we moved the business model from auctions to bulk sales where we would buy direct the entire pool of delinquent property taxes. Like the city of Hartford has a twenty million dollar pool. We would take the whole thing, the good, the bad, and the ugly. and then we would collect on that. We also did deals with the state directly, like the state of Kentucky. We went to the revenue cabinet directly.

We bought everything from the whole state from the revenue cabinet. We were the first to do that. we changed laws in Kentucky. We did some legal work, we hired a lobbyist, we changed laws. we tried to make it fair. Our shop was an arbitrage shop. We weren’t foreclosing on people to get the real estate. We really wanted people to pay.

And if they didn’t, we tried to figure out a way to be reasonable with people and keep them in their homes and not be a land grabber. We would sell properties back to people. We would try to do everything we could because I would have to sit down with my collection staff and say, these delinquent property taxpayers, they’re our customers. You have to remember that. You have to treat them with dignity and respect. Yes, sir. So anything we can do, let’s put them on a payment plan.

So we have the most number of payment plans of any competitor

Quentin Edmonds (08:30)

Hmm.

Justin Weisenbacher (08:30)

just to treat people fairly.

Quentin Edmonds (08:32)

Yes, sir. Man, I love it. I love everything I’m hearing. I love your processing. And I know, LienWatch.ai you’re launching this. Obviously, you’re launching it based on your 30 years of experience, right? Yes. I know operations and systems is a big part of being successful. Yeah. So I would love to know what are some operational things.

That you are putting into place that will lead to success.

Justin Weisenbacher (08:57)

when I was building my business with people, we had a systems department, I’d have to sit down with them. The process was very difficult, they would come back, they thought like computer people. I’m like, they want marketing, they want easy, when we integrated the counties into our website, the tax collectors want a simple module to use. They don’t want all this complicated stuff. So when I built LienWatch it’s LienWatch.ai

It was an easy process because I used AI and I know exactly what people want. So I also have a list creator. Hey, write in, request a list. You want Jersey City list of tax liens write in. I’ll get you the list. I can build it for you. but the school is really what I’m very happy about because people can go in and learn on their own. I have a dedicated chat agent.

which is specific to tax liens, tax deeds, redeemable deeds. You can ask questions at your leisure. And then if you want a separate discussion, send me an email. We have support at LienWatch.ai and I’ll write you back.

Quentin Edmonds (10:03)

Yeah.

Justin Weisenbacher (10:03)

I’m not here to be big. I’m not here to sell. I’m here to teach. If I get too many people, I’ll stop it.

Quentin Edmonds (10:12)

Yeah.

Justin Weisenbacher (10:12)

I will just cut it off at a certain number of people and say, our gold is closed, because I can’t support the people that we have. I want that individual to say, Hey, how do I compete against, J.P. Morgan or Fortress or all the big guys? What can I do? And I had to compete against J.P. Morgan. So I know I couldn’t beat them on cost of capital.

Yeah. So how would I beat them? So I swam around them. I knew exactly what their hot buttons are, and that’s what I’ll teach the individuals.

Quentin Edmonds (10:43)

Rich?

Yeah.

Man, Mr. Justin, I love it now. you’ve probably hinted to this, but I’m gonna ask you straightforward. What is the next real goal for you? what are you looking to solve at scale next? I heard what you said, but I still want to direct that question right down the pipeline. what’s next for you? What’s the next real goal?

Justin Weisenbacher (11:35)

my next goal is to get the name LienWatch out there for people to recognize, to know who I am, to come out from the towers and be in public. I would love to tell tax lien investing is extremely difficult. when you cross different states, it’s not what they tell you. It’s not, you just show up

we used to say put your paddle up to bid. Now it’s all internet based. It’s not that easy. And the returns are not as great as people say. But I can tell you where to go for the returns, how to get determined. What land use code do the investors stay away from? And I’ll tell you the land use codes as an individual, how to swim around them. So to answer your question, I need to get out there. I need to

talk about LienWatch.ai I need to be comfortable with podcasts, which this is my first one.

Quentin Edmonds (12:29)

Gotcha. Yeah. I’m enjoying just your authenticity, man. And I really appreciate the way that you’re showing up. 30 years of experience. So everyone that comes on, I ask people this question, and I’m gonna love hearing the answer from you about this. I wanna hear people’s unique perspective on the word relationship.

Right. So what is your perspective on healthy relationship building within business? what are some of the relationships that maybe you have helped people or people that have helped you? So Justin, talk to me a little bit about relationship in the world of business.

Justin Weisenbacher (13:05)

Okay, that’s a great question. And my belief in relationship is always think long term. Don’t think how much money can I get quickly. Think about long term relationships. and I’ll use a couple of my early clients in Connecticut, Danbury, Newtown. we were the only buyer. We were in there, they would sell to us, we were their ATM machine. They needed

the money for the police department, the fire department, they’d collect up their taxes, they’d call us, and we would buy them par and we’d pay them. But the reason the relationship was so important was I’ll never forget this story. we foreclosed on a piece of property. It was a block away from City Hall. So we took title and I got a call from the mayor’s office and they’re like, what are you gonna do with the property? And we’re like, we’ll sell it at auction or we’ll figure out how to

And they’re like, it’s a block from City Hall. The mayor does not want an aborted up property a block from City Hall. What can we do? this is where the relationships are important. I said, listen, we’ll swap it out. We’ll give you the property and you substitute liens for us. So that’s what they did. I think it was 300,000 the property. We took 300,000 liens and we said, Mayor, you can do whatever you want with the property. Relationships are extremely important.

Quentin Edmonds (14:18)

yeah. I love it. Justin, I want to make sure we don’t miss anything. And so I know I’ve asked you some questions, but is there anything that may be in your mind or even in your notes that you said, I want to make sure people notice about the business, about LienWatch or I want to make sure people notice about me, or I just want to educate people, motivate people in this area. if there’s anything

That’s still on your heart, on your mind that you want to make sure people know. Before we talk about how do people get in contact with you, I want to see if you can land that, if there’s something like that.

Justin Weisenbacher (14:50)

Well, I think it’s important for people to learn first is not just dive in, not just go on the internet and buy tax liens. they need real education. They need to know what they’re getting. I’ve spent a lot of time talking about tax liens, but there’s also tax deeds. So every state is different. If there’s 30 states with enabling legislation for the sales of delinquent property tax liens, the other states

Do not sell the lien, but they foreclose on the lien. So then they get a deed. So what is the deed? Okay, well, when you underwrite it, you legally can’t step foot on the property because it’s not like an REO you’re buying. You don’t have legal rights. So you have to guess what’s inside and the condition. So you have to buy it right. the most important thing is what title do I get? People think, well, I get marketable title, but you don’t get marketable title.

Quentin Edmonds (15:43)

Yeah.

Justin Weisenbacher (15:44)

Because it’s not insurable title. And there’s a big difference. So you have to do a quiet title action to get insurable title. And that’s what people don’t understand. So learn first, then go in.

Quentin Edmonds (15:55)

Yeah. Love it. Well, there’s the nuggets for Mr. Justin, man. Sir, I appreciate you so much, man. Listen, sir, if someone wanted to reach out to you, connect with you, collaborate with you, learn more about what you’re doing, how can they get in contact with you, sir?

Justin Weisenbacher (16:10)

first thing is go to LienWatch.ai. Take a look at our site. our emails support@lienwatch.ai It’s right on the website. And follow us on social media. We’re on all the platforms. we post all the time. we have all sorts of different ways that you can underwrite. we have a

module it’s called AIEVR which I’m in the process of trademarking which is an AI estimated value report so we give you basically a mini appraisal even though it’s not an appraisal because we’re not licensed appraisers but if you want all the comps you want to know what your property’s worth plug it in if you want to go get a list plug it in if you want a special request fill out the form and send it in

And we’ll build it for you.

Quentin Edmonds (16:58)

Yeah. Woo. There it is. Well, listen, there he is. Justin. Let me say three things to you sincerely. Now I just won’t be talking to be talking. So I mean this. This is sincere. Again, thank you for your time. I value you being here. I appreciate you being here. Secondly, thank you for the gift of your authenticity, the gift of your integrity, the gift of showing up as yourself. I believe when we show up as ourselves, we cast seed out there.

And someone can take that seed and they can plant it into their business, plant it into their mindset, and really reap a harvest. I thank you for showing up and casting some seed. Lastly, man, thank you for the way you think. Thank you for your mindset specifically and bringing your mindset to this platform. Justin, I appreciate you coming on, sir.

Justin Weisenbacher (17:43)

All right, thank you very much. And thank you for having me. I really appreciate you and I appreciate the opportunity.

Quentin Edmonds (17:48)

absolutely. I appreciate you too, my friend. Well, listen, y’all heard Mr. Justin. You can’t tell me he was not dropping gems. Drop some nuggets. His information is in the show notes. So please go click the link, get in contact with him. But definitely make sure you are subscribed here. Because I promise you, we’re going to continue to bring up amazing people, just like Justin Weisenbacher. How did I do? Did I do good that time?

Justin Weisenbacher (18:15)

Perfect.

Quentin Edmonds (18:16)

Well listen y’all, we thank y’all for listening. Y’all have a great day.