Foreclosure Investing Strategies from 40 Years in Real Estate

Paul Linder And Caio Simao (00:00)
It’s a concept. I’m always looking for an imbalance. I’m looking for an edge.

Property prices were escalating. went to a cocktail party, everybody’s talking real estate. So although it was a good time for me to start liquidating my property, it was not a good time to buy. So I said to myself, Paul, you still like to buy property, how can you take advantage? What can you do? And the foreclosure market automatically came to mind. So if I can take advantage of an imbalance in the market and buy something for 2020,

25-30 % below the market value, then the foreclosure industry is very interested. And that is in fact what we’re doing.

Erika (02:16)
Hey everyone, welcome to the Real Estate Pro Show. I’m your host, Erika. And today I’m so excited to be joining with Paul and Caio of Prestige Property Solutions in Boston, Massachusetts. It’s so great to have both of you on the show today.

Paul Linder And Caio Simao (02:31)
Hi Erika, thanks for having us. Great to be here.

Erika (02:33)
So for those who may not be familiar with your world, give us the rundown. How did Prestige Property Solutions come about?

Paul Linder And Caio Simao (02:41)
My name is Paul Lindner and I’m the owner and founder of Prestige Property Solutions and I’ve been in this game for about 40 years. Starting off as a rental agent, leading to being a real estate property owner of residential property, running a construction crew where I was buying and renovating my own property and renting that property out.

This company deals with all aspects of real estate, be it rentals, property management, construction, and our newest venture into the foreclosure market.

Erika (03:14)
Awesome. then, ⁓ Caio, talk a little bit about yourself. What was your entry like into the company?

Paul Linder And Caio Simao (03:20)
Yeah, absolutely. I started here when I was 16 and it was a rental agent at 18. And then after I went to college where I did a finance with a real estate focus at Lehigh University, worked at Cushman and Wakefield in New York for three years doing commercial real estate and came back here in 2020 to start our to develop our sales department, which started off with selling some of Paul’s properties. And as Paul alluded to, turned into not only a new sales department, but a

sales

department that includes one of our biggest new industry lines which is the foreclosure auction.

Erika (03:54)
That’s exciting about the foreclosures. Was there a defining moment or deal that solidified making that change?

Paul Linder And Caio Simao (04:02)
It’s a concept. I’m always looking for an imbalance. I’m looking for an edge.

property prices were escalating. went to a cocktail party, everybody’s talking real estate. So although it was a good time for me to start liquidating my property, it was not a good time to buy. So I said to myself, Paul, you still like to buy property, how can you take advantage? What can you do? And the foreclosure market automatically came to mind. So if I can take advantage of an imbalance in the market and buy something for 2020,

25-30 % below the market value, then the foreclosure industry is very interested. And that is in fact what we’re doing.

And to add a little bit to Paul’s point, in 2020 when rates were very low, sales were fine, you could find the right properties as well. But when rates started going up and prices didn’t really cave so much because the supply wasn’t quite there, the foreclosure auction really took off. That’s when it became more than a no-brainer where, hey, if we put the work in, if we do the homework that we need to, and we know

exactly what it is that this property can go for, what we can pay for it, what we need to do and what we can turn it around for, then we got to jump all in. And we did and now we have a proven track record.

Erika (06:12)
Which markets are you operating in these days and how do you decide which ones are target?

Paul Linder And Caio Simao (06:17)
question and that’s the hard part. There are approximately 15 foreclosure websites that I frequent every weekend. From that 15 websites there are perhaps 150 potential foreclosures that I might be interested in of which I whittle that down to about four or five. Once I have that four or five I’m very selective then we start to do our homework be it legal homework

price valuation and I’m whittling it down to maybe one, two, or three potential foreclosures a week. That said, it’s happened. I could buy two properties at foreclosure in one week and then I can go two months and not find anything. So when the opportunity is there, you have to strike.

Erika (07:06)
Yeah. What makes foreclosure properties such a compelling opportunity compared to other types of real estate investments?

Paul Linder And Caio Simao (07:13)
I’ll take that on at first. So I would say that the main thing is Since there isn’t nearly as much information out there for each and every one of these properties if you can build an edge into what you’re doing and we’re in the the Information industry at the end of the day if you can find that information and you know what to do in order to find it that’s an automatic edge that you get because somebody may overpay for that and somebody may not pay enough because they don’t think they’ll get the turn

around value. So when you know exactly what it is that you can get for that and you find the right information, not many people will be able to do that. And just by nature, when something’s going to foreclosure, typically it is a lower threshold than if you had the time to market it. If you had, you know, the broker’s opinions of value for your property and you were in a better place that you could sell it. But when a foreclosure is happening, you know, typically we go after us Paul had

alluded to before investment opportunities, not owner occupants. But in either case, when it’s a foreclosure, the bank has a much lower threshold, 99 % of the time than if it was on the market. So by nature, it’s a little lower. And if you do your work right, you can get it at the right price or not get it if it’s going over what the right price is. refer to the foreclosure market as the Wild West. There’s no time to do the due diligence that your average investor is

going to do. There’s no time to fill out your mortgage application and an appraiser go and get financing from the bank. You have to have all this lined up. So consequently, there only a few players out there who I’m competing with as opposed to if something were on the market through MLS, everybody would know about it. Everybody would, there’d be 20 or 30 people potentially running through that building with their

out and taking notes, etc. There’s no time for that and it’s not for everybody. I seem to have the risk tolerance. You need a certain level of confidence and I seem to have it and I thrive for that.

Erika (09:21)
Both of you might want to answer my next question. What would you say is the biggest misconception when it comes to foreclosures?

Paul Linder And Caio Simao (10:03)
For me the biggest misconception is that people can go in look at the properties people have time to Make the decisions consult whoever they have to consult. There’s literally no time

And the other thing that people don’t realize, because I’ve seen it, let me go put my $5,000 down. I’ll be the successful bidder. Call the bank, and they’re going to give me my money, and et cetera, et cetera. And it’s going to take 60 days to close. No, sir. You have to have that money available, because as soon as that title is clear, the attorneys representing the foreclosure bank, they want you to ASAP.

It’s no time.

And those are great misconceptions that Paul said. And the only one that I would add to that is in relation to it, when you get to the foreclosure, a lot of people expect that the auctioneer will have more information for you. They don’t. They may have a tax sheet, you know, how much are taxes behind. That’s public info anyway. But in terms of, it’s a condo. How much are they behind in condo fees? They’ll never have, you know, way more

more often than not they won’t have that. If you ask about utilities, whatever it is that you think they may have, they have plausible deniability on everything and they put it front and center. If we don’t have the information, buyers beware.

Erika (11:25)
and Caio, both of you have been in this industry for quite a bit. And I’m sure you guys have a story or two, maybe where your grit was tested, maybe a deal went sideways that you had to pivot. Can either one of you or both of you share a moment like that?

Paul Linder And Caio Simao (11:41)
I’ll answer, I’ll let Caio answer that question, for me, the story that’s worth telling is, you I’ve been doing this a long time, things have worked out for me, all I had to do was sit back, steer the ship, collect my rents, and life was good.

the foreclosure business and thrill in the action and the hunt has reinvigorated me and that i look forward to getting up every day and tackling the next opportunity and i’m in the game or i thought to be honest with you i was just gonna chill and steer the ship but now it’s ⁓ i’m all in and i’ll answer the question with

I’m, if I understood correctly, it’s a situation that kind of went south, right?

So one that I can think of is actually when I did the bidding myself on behalf of Paul because you can purchase it as You know my name Caio or an nominee So when Paul isn’t around somebody else can go on his behalf as well and so on You know, this is why you can do it for other investors. There was this specific multifamily property in Everett that we purchased and We knew for a fact that we had gotten an incredible deal on it with

the price that we paid, we knew what the turnaround value would be, and we knew the things that we needed to do in order to achieve it. Everything was crystal clear. We were kind of shocked that we were able to get it for the price that we did. It turns out, no fault of ours, but the owner who had been in the state of Florida did file for bankruptcy in time so that the auctioneer should have never held that auction. Everything was invalidated and voided. Obviously, we got the deposit back because it was on them.

but they were able to save that property and because these things can happen, the auctioneer wasn’t aware of it in time and we’re not sure the specifics that happened. This was the first time in years that we’ve seen that happen where an auction took place where it shouldn’t have. They’ll usually get postponed five minutes before they take place, but they’ll never take place until you have the final okay. So was a surprise to us and obviously we…

We were excited about the amount that we were gonna make on that profit margin.

Erika (13:54)
Yeah, yeah, totally. The other thing that I like to talk about on the show is the relationships that we build in real estate, because they’re so important for your business. What would you say has made the biggest difference? Maybe a networking group, maybe it was a partner that you started working with.

Paul Linder And Caio Simao (14:12)
I would say there are a few but I don’t know if you want to answer that first. So I would say that

Our current biggest client came through the auction industry. just so happened to, know, Paul was connected to this client through a mutual attorney who knew both. And because of the things that we were doing, they were able to trust us to take care of their foreclosed properties as the lenders whose borrowers for whatever reason weren’t able to be successful on their developments or investments. So that

That was a great network that we were able to obtain. And I would say that I’ll give an example. And I think it’s a story that Paul can take over at any point because it was mostly on him. But there was a back bay condo that Paul purchased at auction.

We knew that it was a great deal, but it was an owner occupied unit. Thankfully on that one, the owner of that property who had really gone through a lot of ⁓ unfortunate things.

was very welcoming and wanted help in terms, know, after the auction took place. And Paul was able to, in short, reconnect that gentleman with his family, who he hadn’t talked to for, I think, his mom and brother over five, six years. And got the family over here, and the guy didn’t have much money, but Paul was able to help him figure out that, because you have a lot of equity on this, if you hire the right attorney, you know, talk to the auctioneer, you’re able to get your

equity

back on top of the overall price and the mortgage that was left. So the guy ended up having $400,000 that Paul was able to help him get. But in that meantime, before he was able to obtain that money, Paul fronted $15,000, $20,000 for him to get a new place, start over, and then he paid Paul back as soon as he got that money. it was really a heartwarming story if you saw the conditions that that gentleman was living in. And it was an incredible

location, but the property was completely in need of, you know, everything. So on that one, not only was it a beautiful story in terms of how this gentleman’s life was able to get a turnaround from a tough situation, but also ⁓ Paul sold that property, I represented him on that sale, to ⁓ investors who did their first flip in Boston. They do a lot of great work in single families around Boston, and they rehired us to sell it after the

property was renovated. So we really saw the full circle with that one condo from every angle that you could have hoped for. You’d be surprised what a small world it is. If you are honest with people, straightforward, people know who you are. But if you’re not, people also know who you are.

Erika (17:28)
That’s really cool.

Paul Linder And Caio Simao (17:39)
As I said, I’m having dinner with a friend of mine who his friend was at the dinner table. And next thing you know, I’m putting an LLC together where Jerry is fronting me a million dollars to go hunting for property. I wouldn’t have been able to do that if it wasn’t for, quite frankly, my stellar business reputation and Lenny vouching for me and the fact that Kaio as well

we have the ability to succeed and get the job done.

Erika (18:09)
Yeah,

absolutely. Both of you, what would you say is next on the horizon for Prestige Property Solutions? What are you looking to grow or scale?

Paul Linder And Caio Simao (18:18)
From my point of view, I’m looking to close one full closure every…

16 to 90 days perhaps to being able to close a foreclosure and turn it around every 30 to 45 days. So I want to have five or six, seven properties in the pipeline. And whichever the attorneys tell us, Paul, I have clear title on this, which means I know if I buy it, I’m able to resell it. Without clear title, you have a piece of property that’s unsaleable. Who wants that?

That’s what we’re looking to ramp up. That’s why we’re looking to raise some more dollars and That is my goal to turn this into a real machine Yeah, and I would have to agree that that that is the priority for both of us But since Paul already covered that one I can give you another I would say that in

while doing everything that we’re doing, both in rentals, sales, foreclosures, we do have our property management division and we just acquired somebody who was an agent here before but has very specific property management experience at some big companies like Greystar, for example, and we really want to take that off along with the auctions too. So all of our clients know that they’re fully set up for property management after they purchase their places.

And we do a level of property management now, but we really want to tidy that up a little bit more. And in relation to what Paul had said, the more investors we have and showing them our proven track record, showing them what it is that we’re going after, being transparent and having those properties in place so that it hits what we’re looking for and what they’re looking for, the more of that we get, the more talent we’re going to be training to assist us in having the well-oiled machine continue.

to be well-oiled.

Erika (20:10)
That’s exciting. One last thing. I want to leave our listeners with some gold here. What kind of advice would you give someone who’s new to real estate? You know, you can be as broad as you want to be, or if you want to talk about foreclosures, you can do that too.

Paul Linder And Caio Simao (20:24)
Personally, I’d like to talk about something totally different. My background is such, my father passed away when I was 11. I was the youngest. I had two older brothers and we didn’t have any money. My mother was not able to work. And we went to school, got educated, and I’m thankful.

that I ended up where I am and consequently I have a history, I’m proud of it, of bringing young kids into the office who want to work, show them the real estate business and even supply them whether they’re going to college, people I know in the…

community. My wife is Brazilian, so in particular the Brazilian community who may not have been here that long. Whether it’s buy them a computer to go to college or even I’ve started the Prestige Property Solutions charity. Whether that’s giving kids money for college. I would much rather give

five kids money to go to college than buy myself a new car. I like my car. I like cars. I like my car. I don’t need a new car. I’d rather put the money to something good. And I’m particularly proud of that and I’m not going to stop doing it. And that is mission of mine to do that as long as I’m able to.

Yeah, no, and I bear witness to that and I’ve been a recipient of a scholarship and so has my brother who also works here. He’s an agent and does all of the drone footage. He’s licensed drone operator. And Paul and myself each bought him a different drone. Paul had to beat me so he bought him the $2,500 drone and I had to buy him a $1,400 drone. it’s investing in the right people I think is more than a proven right.

for Paul and a lot of the we have older agents who have been with Paul for a long time some older agents who came more recently but the the younger crowd like myself starting at 16 my brother starting at the same age he’s five years younger but at the time he started and a few other people who work here including the property management gentleman that I that I had recently mentioned we all started at a young age and got the right mentorship and we were able to Paul gave us the flexibility whether it was me

building the sales department here and doing what I can do on the auction side or Gabe with all of his videography skills to kind of explore your own skill as long as you can relate it back to real estate. So I think that’s a great thing and that’s a piece of advice to give to the young crowd starting in the industry or even an older crowd that’s new to the industry as well. Find somewhere where you can see that you will be invested in, I think is important. There’s a lot of turnaround in this industry.

Agents go from office to office all the time. I saw the same thing happening in New York at the commercial level, same thing here at the residential level. it’s easy to go somewhere that’s got grand recognition. It’s easy to go somewhere where you think you’re gonna succeed, but it’s hard to know what that means. So I think a gut feeling of, you’re somewhere where you actually feel cared for, you’re probably gonna do a little bit better.

Erika (23:31)
Yeah, absolutely. If someone wants to connect with you at Proceeds Property Solutions, what’s the best way for them to reach you?

Paul Linder And Caio Simao (23:38)
Absolutely, so in terms of our sales department, you can find us on Instagram. Our handle is @BeanTownPropertyBros. and that’s me and my brother and we have our rental page as well, which I can send over. I can’t think of the specific name right now, so I’ll send that over. And then our website, prestigepropertysolutions.com
You can Google us as well. E-mail it’s just my first name [email protected].

I answer my phone 24 hours a day maybe not when I’m sleeping. 617-448-8575 I welcome a call from somebody who’s interested in getting into the real estate business as a young person I welcome the call to a potential investor for somebody who wants to know more or I just welcome the call if somebody has quick question even about their own rental property. I got that a call from somebody and the other day they had a question the tenants were giving them a hard time and they asked me Paul what should I do and I gave him my best advice.

Erika (24:47)
Paul and Caio, I appreciate your time, your stories and your perspective. Thanks again for being on the show today.

Paul Linder And Caio Simao (24:53)
Absolutely. pleasure and thank you. Thank you, Erika.

Erika (24:56)
For those of you

tuning in, if you got value from this episode, make sure that you’re subscribed to the Real Estate Pro Show. We’ve got more conversations coming up with operators like Paul and Caio who are out there building a fantastic real estate empire. We’ll see you on the next episode.