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How Karl Spielvogel Makes Big Money Solving Messy Real Estate Deals Most Investors Ignore

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Show Summary

In this episode, real estate expert Karl Spielvogel shares his deep expertise in solving complex property title issues, uncovering hidden deals, and maximizing property value through creative strategies. Learn how to identify problem properties, navigate legal loopholes, and turn distressed assets into profitable opportunities.

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    Investor Fuel Show Transcript:

    Karl Spielvogel (00:00)
    Well, my main focus right now is any kind of deals with problems. We go after a lot of property tax delinquent, they’re owned by dead people. We’ll build out the family trees and we’ll help them get money for their shares of the property. So we do a lot of ⁓ tax delinquents. We do partition sales, excess proceeds, real creative land subdividing. ⁓ We just anything weird.

    Micah Johnson (02:02)
    Hello everyone. Welcome to the Real Estate Pros Podcast. I’m your host, Micah Johnson. And today I’m joined by Karl, who’s been making some serious moves in real estate investing now for over two decades. Karl, welcome in man. Glad to have you.

    Karl Spielvogel (02:13)
    Thanks to have me.

    Micah Johnson (02:16)
    Absolutely, man, absolutely. I’m excited for today. We’ve known each other for a couple of years now, so I’m pumped for your story to get out there. I think what you do is one of the coolest niches in real estate, honestly. It’s so deep in the weeds, but the stuff you get to do, these aren’t just little deals you end up doing, which is what makes it so cool. So let’s dive in there, man. For those out there who aren’t familiar with you yet, tell us more about yourself and what your main focus is right now.

    Karl Spielvogel (02:43)
    Well, my main focus right now is any kind of deals with problems. We go after a lot of property tax delinquent, they’re owned by dead people. We’ll build out the family trees and we’ll help them get money for their shares of the property. So we do a lot of ⁓ tax delinquents. We do partition sales, excess proceeds, real creative land subdividing. ⁓ We just anything weird.

    that, let me see what else. Should note, but a lot of quiet title, color of title, ⁓ adverse possession. ⁓ We buy judgments. ⁓ We do a lot of work around properties that have judgments to clear title. much, pretty much any messy title situation, there’s usually a way to monetize it in some form or fashion. Even if you buy a partial interest, we’ve done that, done partition sales. There’s a whole bunch of just a lot of stuff.

    in this whole like curative title arena.

    Micah Johnson (03:47)
    Right. And that’s, remember you telling me what you did when the first time, and it was just like, wow, you literally look at something that 99.9 % of other investors say that’s dead. There’s nothing you can do with it. And it’s, it’s thousands and thousands and thousands of dollars that you turn that into. even, I love the one about the, where you go find the family tree. Cause these are people, I mean, they may have had some unfortunate happen in their life, but they didn’t even know what was coming. It’s almost like Santa Claus giving them a call. Like, Hey, there’s this

    There’s some money here. Do you want this money? And it’s amazing. Like, so it solves all these problems, but it’s super intricate. What led you here? How’d you get to where you got started in real estate to where you are today?

    Karl Spielvogel (04:30)
    Yeah. Well, I started going to Ron LeGrand, learned a lot of his techniques. And then it was just, ⁓ like the average wholesale stuff is it’s hard. There’s a lot of competition. just start running into problems and then we figured out how to solve the problems. Like, for example, one time an attorney said, Hey, you can’t close on this deal. There’s like a hundred thousand dollars in judgments. Well, we figured out that we can either.

    judgments expire after 10 years, we let them expire,

    we can buy the judgment, we can discount it. So it’s sort of like running into problems while we’re working deals is how we got into it. We had another deal where, you know, somebody passed away, we didn’t, we didn’t know what to do. We just asked an attorney, hired genealogists, and you know, and just, we learned a lot of legal loopholes. Like for example, if somebody’s been passed away in North Carolina two years, you don’t have to open probate.

    So we just, it was just learning, connecting, and then seeing that there’s large money. You know, we had two deals that are $275,000 deals because one had errors and one had a few errors and a judgment. there’s, there’s so much money to be made if you know how to do this. And every single investor has run into these things where the attorney says you can’t close and we can’t find all the errors. And I want everybody to know there’s, there’s, there’s a lot of money in these type deals, whether you work with me or a lot of other people.

    And this is where a lot of people head in the industry because wholesaling is getting so rough. They’re going in this period of title stuff, finding these problem deals. And most of them come from property tax delinquences where we find a lot of our deals.

    Micah Johnson (07:02)
    The desire to take it on, that’s what it gets. It’s like, y’all are detectives, man. Y’all are digging in deep. it’s really, mean, real estate rewards the people who are willing to solve problems. This is a problem solving industry. The bigger the problem you’re willing to solve, the more it’s worth. mean, that’s just literally the reality of it. If it’s a big problem, it’s worth a lot of money. How can you solve that?

    Where do most of your deals come from now? Is it your day in that you do the property tax, you’re going out there, but is the market building where more more people are sending you these? Cause I mean, if they’re already in the business and they can stay in it, like getting a deal’s the biggest step, right? Like no one wants to just let one go.

    Karl Spielvogel (07:50)
    Yeah, 70 % of all our deals come from joint ventures and referrals. You know, investors that run into this kind of stuff where the attorney said it couldn’t be closed or it’s a problem. So, you know, we, and there’s other people too. That’s where a lot of our stuff comes from. Then a lot of it is just taking the tax delinquent list. found ways to sort it, find out who’s deceased, like build out the trees. ⁓

    And a lot of things like that. So it’s property tax delinquency. could be inheritance. A lot of times people inherit a property. They hate their sister. I’ve had that happen. I’m like, go make up, go make up with your sister and get a lot more money. You know, ⁓ the people of IRS judgments, they come from a whole myriad of stuff, but a majority of stuff are property tax delinquents.

    Micah Johnson (08:35)
    Gotcha. Gotcha. And what’s your typical deal cycle? So this is one of the things you got to be willing to in this world is takes a little bit,

    Karl Spielvogel (08:45)
    Yeah, our average

    deal is about six months to a year from start to finish. We have some that are two and three months and we have some that are going on five years now. So it really depends on how many heirs, what kind of problems, you know, things like that. last, we just finished a deal that took us two years. had 38 heirs. So we had to build a tree. We got bought out 36 of them, two heirs. One, one was a ward of the state. One was a.

    Micah Johnson (08:54)
    Wow.

    Holy cow.

    Karl Spielvogel (09:15)
    had a guardian at light them. So we ended up doing a partition sale. And I think we made about 270, 275,000 on that deal. But that was a two year cycle on that deal.

    Micah Johnson (09:23)
    Wow. Right.

    Right. Right. And it’s, mean, if it’s going to be two years, it better be worth it. Right. Because that’s what I was saying earlier. These aren’t just like little amounts of money. You’re not going through this for just anything, but this is a way to, like you’re talking about now, you got to get more juice for the squeeze. Like when you’re, when we’re in markets where you start feeling that this makes the best rise to the top, this makes you have to think about

    It’s already expensive enough to get a lead. What can I really do with it? Where can it really go? So don’t just, don’t just throw these out. What are some, I know you say, you’ve said it a couple of times, like the attorney says it can’t close or something like that. What can, besides those, is there anything else that they can look out for to see like, okay, this one might need to be, I need to start possibly thinking longer term with this. I need to reach out to somebody like Karl.

    Karl Spielvogel (10:51)
    Yeah, like if the owner’s dead, you know, and you don’t know the heirs, maybe if there’s judgments, ⁓ what other stuff? I just, yeah, if there’s any kind of like problem that you think that like, that you can’t get the deal done. I don’t know if that’s a good answer, but it’s like anywhere where you see there’s a decent profit that you’re being stopped by something. You know, if that…

    Micah Johnson (11:11)
    It’s eating the children.

    Right.

    Karl Spielvogel (11:20)
    know, so it’s errors, judgments, breaks in title, ⁓ just any anything strange, weird or whatever that that you get stopped at, if that makes any sense.

    Micah Johnson (11:31)
    And so who

    typically finds that then that that’s the title company most likely finding it or the title of attorney, depending on your state.

    Karl Spielvogel (11:36)
    No, no, we do it. Well,

    yeah, like let’s say you send something to your attorney, right? And then he comes back and there’s title issues. Yeah, that’s how a lot of the stuff are found. Or for us, we do the research upfront so we can figure out the title issues, figure out if there’s judgments, figure out who are the rightful heirs, and figure out the process, I mean, the problems.

    Micah Johnson (12:01)
    Okay, hold on, step back. What you just described, that’s like, you’re not, you’re not just hunting anymore. That’s a sniper shot like that. is so intentional then where you almost, do you have a business plan basically laid out about how you’re going to approach the heirs by the time you’re saying, like, you know, how much you can offer. You have all this stuff is laid out.

    Karl Spielvogel (12:21)
    Yeah, well, the offer is predicated on the situation, right? Not on the value of the property. Like, for example, if there’s multiple heirs, they don’t know each other, they’re never going to get it done. You know, we’re going to offer less, but if there’s two, like just a brother and sister, you know, and maybe they’re in agreement or they’re fighting, that’s going to be less work. We can offer more for each deal. So the offer, yeah. So it’s like, we do have, we have a whole system. We put it through and here’s another cool thing.

    Micah Johnson (12:42)
    Gotcha. Gotcha.

    Karl Spielvogel (12:50)
    that we do, check for value adds. What I mean by that is, you, like, let’s say we’re looking at a lot, can you subdivide the lot? Can you buy some of the neighbors, some of the lot neighbors next door? How can you subdivide it? ⁓ So we’re always looking for, like, I’ll tell you a property real quick. There’s property 945 Rowan. It was a house and it has extra land. Well, we figured we could subdivide two lots off the back of it. It had 13 airs.

    It took us a year to close, but we bought it. We were all in for 40,000. We sold the house for 112 and then we subdivided two lots and sold those for 55 each. We added extra 110,000 in value by just subdividing two lots off. And I’ve got all sorts of different things like this. We’re buying part of the neighbor’s land, another lot, recombining them to get extra lots. just be, when you’re looking at something, always be looking for that value add on all your deals.

    Micah Johnson (13:49)
    man, you just dropped some incredible nuggets. Like I realize you, I don’t think you’ve ever seen a box in your life. That’s how far you’re thinking outside of it. Cause it’s, it’s to when you’re, and I love meeting people like that because I’m not that way. It’s your probably, you, can’t walk into a house and like fill the space really well. That’s not my gift. I’m other places. So for folks that see certain things that way, like you’re doing, it’s invaluable. Cause it’s, it’s, it’s man, like it’s such a,

    Karl Spielvogel (14:04)
    Yeah.

    Yeah.

    Micah Johnson (14:19)
    Even the valuation now, you’ve got a whole different formula. Again, you’re offering based on situation truly where making up numbers, but you could buy a property for five grand from five different heirs for a thousand each. And they’re just like, yeah, we don’t want it. And it could be worth who knows what, right? Like it’s literally your whole situation changes. what is…

    Karl Spielvogel (14:23)
    Yeah.

    Micah Johnson (14:45)
    What doesn’t work then, right? What do you see that kill? What deals have you found that you couldn’t do? Like, are there any out there where it’s truly like, nope, just can’t get it done?

    Karl Spielvogel (14:55)
    Yeah, there’s some that have too many errors or they might have too many problems for, for like the juice isn’t worth the squeeze, but

    a majority of the deals we’ve been able to monetize in some way, whether let’s say we bought out 50 % interest in the house, right? Well, then we can take it to a partition sale, which forces the whole property. I’ll tell you a quick story about this one. And this will just, there’s, there’s a property on, what’s that?

    Micah Johnson (16:00)
    Okay, and break the word down to it. So how are you

    buying the portion of the house? Like take us into that. How are you only buying that interest?

    Karl Spielvogel (16:06)
    Okay,

    so there’s a property on Bank Street. The owner had passed away and there’s no estate. So usually people open an estate up, right, when they pass away, but probably 80 % of the people we deal with don’t. So if there’s an estate open, a will, you have to follow that. So this person passed away with no will, so it goes by the intestate laws. So on this particular property on Bank Street,

    Half went to the brother and half went to the sister. So we ended up buying out the brother’s share. I think we gave him 1500 upfront and we gave him some more money when we then then we tried to get the sister. Well, she was bat shit crazy. Hold up another house. He even told us to bring her some fruit baskets. Bring her Kentucky fight. We did. Anyways, we couldn’t get her right. So this is so we end up getting half of it and then we did a partition sale. Well, it for low at the courthouse.

    So if it goes for low, you buy it. So I think we were all in for 40. ⁓ So it’s OK. The partition, it goes for partition sale. ⁓ So it just goes for sale at the courthouse. So we bought it for 40. Now we owned half of it. So we only had to pay 20,000. And we sold it for 120 to the neighbor and made about 78,000 after expenses. So that’s just one exit strategy we have in these kind of deals, how to monetize them.

    Micah Johnson (17:31)
    Like you

    forced the hand. That’s amazing. Like the one, cause usually, you know, the, they’re fighting. We’re never going to solve this, but you solved one force the hand of the other body yourself, but you already owned half seal head pay half, which is awesome.

    Karl Spielvogel (17:45)
    Another

    way we could have done it, we could let it go through the tax sale and collect overages on our 50%. We have a whole wing where we’ll buy property from people going into tax sale or whatever, a bi-partial interest. We let it go through the tax sale and we get to collect from, let’s say there’s 20,000 taxes and it sells for 120, whatever percentage of that we get to keep. It’s called an overage.

    So we have this whole thing around overages. We even buy judgments against errors in these sales. So you can niche within a niche within a niche in this business.

    Micah Johnson (18:18)
    Really?

    Yeah.

    And y’all are, your layers deep in it, man. And it’s having all those tools at your disposal makes sense that you can monetize most of your deals. And are there, do you, is it just one state that you operate in? Like where all do you do this at?

    Karl Spielvogel (18:37)
    We’re really good in North Carolina. We have the attorneys, we know the loopholes, but we can operate any state. ⁓ just not, we don’t know the laws as well, but we do have connections with attorneys there. So we’re good at it all over. We’re best in North Carolina.

    Micah Johnson (18:55)
    Okay. Okay. All right, man. It’s, ⁓ it’s exciting. What tell us about a couple of years you’re working this year. What are a few that got you really pumped up right now?

    Karl Spielvogel (19:05)
    ⁓ I got this deal. It’s 20 acres in Statesville and it’s weird. Like we found it because it was tax delinquent, but a friend of mine knew the family, so we could have found it tax delinquent. Another thing was interesting is they had filed a partition sale on the property. So they were trying to sell it. Long story. They have it under contract for 600,000. So what we did is they’re doing this,

    Partition sale. So we could have found it three ways. The tax delinquent, we could have found it because it also was listed as heirs, like John Hill heirs, right? So you know, it’s a bunch of dead people. And then, then another thing was this filing for the partition sale, which means that that some of the heirs were working to sell it. So anyways, we took the partition sale, we read it, it only had the breakdown of who had what percentage, and we reached out to the people.

    And they were like, hey, we just, we’ve been in lawsuits for years. We want out. So we ended up buying out 50, 50 something percent of it. And, um, the, the realtor on it has a contract for 600,000. Now this deal is not complete. It’s not done. Things could happen. And I’ve counted my chickens before and got egg on my face. So, but this looks like a really good deal. Um,

    But there are some other issues we have to break through. So I really like that deal that we’re working through.

    Micah Johnson (20:36)
    Okay. And what could that turnaround be for you? If it does work, what’s that do? What’s it bring in?

    Karl Spielvogel (20:42)
    If everything works as planned, knock on wood, we should get a check for about 300 to 320 grand.

    Micah Johnson (20:49)
    And there we go. And that’s

    Karl Spielvogel (20:51)
    with about,

    I think we have 30, about 40,000 invested in it.

    Micah Johnson (20:56)
    Okay. That juice is definitely worse than squeeze. So those are.

    Karl Spielvogel (20:59)
    But I’m not counting on

    it. There’s things could happen. I had this one deal. We were getting ready to make 300 and some odd thousand. Attorneys always wait the last second. They ran title on it. And it turned out there were some errors from 1999 that were missing. so, so, so that was one where like counting on this $350,000 check. And then there was a title issue that from 1999 that I didn’t even see.

    Micah Johnson (21:03)
    I heard that man, I heard that.

    Right.

    Karl Spielvogel (21:28)
    So we had to spend six more months and some other errors to figure out. We still made 270,000 on the deal, but that was a chicken, that was a, yeah, where the eggs hit me in face.

    Micah Johnson (21:38)
    Right. And it,

    it takes some growth of like feel good about 275, even though it’s awesome when that 350 was there. Cause it’s a, can make it feel like a loss, but man, that’s again, it’s what I love about real estate.

    Karl Spielvogel (21:50)
    And let me just tell you about that

    deal. It was land that’s owned by deceased people that we could subdivide using this thing called lots of record. So we were able to go against the zoning a certain way and be able to get more lots out of it. So that was the value add. It was subdividable, but we had to use this thing called lots of record and we had to do it just right so we didn’t violate some of the rules.

    And that was the value add to that lot. we also held it for five years. So we got a lot of appreciation. that’s how we made the money on that deal.

    Micah Johnson (22:29)
    Love that, man, I love that. Karl, these are the kinds, I love hearing your stories, man. I could hear them all day long for most part. You work some of the funnest stuff. But for those that are listening in and out there that possibly have a deal to send you, wanna learn more about what’s going on and how to capitalize on things, what’s the best way for them to find you?

    Karl Spielvogel (22:50)
    Um, we have a website legacy link properties. I think it’s dot com/consultants (legacylinkproperties.com/consultants). Um, we have that or the best way is, um, you can call and leave a message. I don’t know if you can see 704-777-7777. Uh, you can call there. I’m gonna give you my personal number. It’s best to text me 704-995-5385. Just text me or you can leave a, we have an answering company that answers this because

    Everybody thinks it’s a taxicab and all sorts of crazy stuff because all the sevens, you know. By the way, real quick, I bought this number for $350 like 20 something years ago. I just had an attorney offer me 110,000 for it because he’s a personal injury attorney, right? So he wants to say, hey, you’ve been an accident call 704-777-777 because people remember that number.

    Micah Johnson (23:26)
    Love it.

    ⁓

    man, okay. See.

    Karl Spielvogel (23:48)
    There’s a whole business

    in buying and selling phone numbers out there that that’s there’s somebody cool shit. Yeah.

    Micah Johnson (23:53)
    I wouldn’t doubt that you know that, right? Like that’s

    the rabbit holes Uncle Karl wanders down. And if you haven’t heard Uncle Karl, find him on Facebook. That will, that’ll make more sense. Well, again, man, glad to have you on today. love getting to hang out with you and talk with you. Thanks for sharing the stories you shared. Those listening in and watching, go ahead.

    Karl Spielvogel (23:58)
    Yeah.

    Yeah.

    Appreciate ⁓

    it. one other thing too. As we grow, we do have a lot of deals. So we’re always looking for funding partners too. And so if anybody wants to invest in deals, you know, we love to have more funding so we can do more deals as well as we’re also looking for messy deals. So call us when you get something like that. ⁓ A lot of times there’s a pathway to make these deals work out.

    Micah Johnson (24:37)
    Love that man. And I guess on the show all the time, we bring professionals on for a reason. People who are really, really good at what they do in the particular area of real estate. So if you have a trouble deal or if you want to invest in these and start taking apart and some of these bigger spreads, reach out to them, give them a call. You won’t regret it. I promise. Follow them on Instagram, go to their website. Again, Karl, thanks for being with me, man. Thanks everybody for being out there today.

    Karl Spielvogel (25:03)
    Thanks.

    Micah Johnson (25:06)
    If you got value out of today’s episode, please like this episode, share it with someone else you think can get value out of it. And as always, if you’re not a subscriber, please click that button. Follow along with us. We appreciate every single one of you out there that do.

    We’ve got more episodes coming up with operators just like Karl, people out there building a real business in the industry. Thanks for being with us today. We’ll see y’all next episode. There we go. Sorry about that.

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