How to Invest in Tax Liens for 18–36% Returns

Kristen Knapp (00:00.582)
Welcome back to the Real Estate Pros podcast. I’m Kristen Knapp and I’m here with Dan Eckelman, the owner of DanWealth Academy and very accomplished speaker as well. So we’re going to get into a variety of topics that I’m very excited about. Thank you for being here, Dan.

Dan Eckelman (00:13.209)
Thanks for having me, I really appreciate it.

Kristen Knapp (00:15.176)
Yes, so you’re accomplished speaker, you’re an investor, you are an expert on tax lien. We have a lot to talk about, cryptocurrencies, so we got a lot of ground to cover. So let’s start at the beginning. Can you talk about your journey into real estate?

Dan Eckelman (00:25.166)
I’ll stop. Yeah.

Yeah, well, you know, I’m an international speaker. I’ve been for over 25 years. I graduated from the Ohio State University, three football players out there with a degree in law. But, you know, heading down that path, 120,000 debt and student loans, working for a law firm to put a cap on my salary wasn’t my path. So I thought, well, what do do? So I ended up starting a factoring company with another local attorney, factoring of invoices, accounts, receivable financing.

Kristen Knapp (00:37.896)
Okay?

Dan Eckelman (00:55.982)
We built that up to a couple million a month for a small law firm. We’re pretty happy with that. Kept getting calls from brokers all over the country, all trained by the Open University out of Orlando. I called them and said, who are you guys? They said, well, we teach brokers how to broker privately held notes like invoices, structural settlement lawsuits, buy-inicles, insurance policies, mortgage notes, business loans, lottery, sports contracts. There’s about 60 plus income streams like that. We’re people getting paid money over time, but they want a lump sum of cash today at a discount. It’s called a privately held note.

No different than a credit card transaction. You run a business, take a credit card, you’re take a little bit less, but you get your money now. And they teach brokers how to find those deals and send them to companies like mine to fund the deals. I said, well, thank you for all that. And they said, hey, by the way, we have a training class in United States and Canada every weekend. Would you like to teach? We’ll give you half a day of the three days talking about invoice financing. I said, sure, if it gives me more deals. So they kept booking me every single weekend. And after a few months, they said,

You’re a great speaker. We like to speak on the front end. I said, well, what’s that? They said, well, we’ll pick a city like New York City. We’ll go two weeks prior to the training, plash the TV with a 30 minute infomercial all week long, people to come to the show. You go there and hit the north, south, east, west side of the city. One show Sunday, two Monday, two Tuesday, one Wednesday, six shows a week, 90 minutes a show. Talk about probably held notes and sign them up in the training class. I said, sure, sounds like fun to me. So for the next 13 years, 51 weeks half the year,

Every week for Christmas, I’m on a plane. Four days a week, six speeches a week on privately held notes. But you know, I was in my early thirties when I started speaking and immediately pulling in five, six, seven hundred thousand dollars in income. I who knew? Then I started speaking on grants and scholarships, then got back into real estate and started speaking on what are called taxing certificate investing or property tax investing. I became very well known in the speaking world and the real estate world across the country. And that’s when I got a call from Donald Trump to come on board of Trump University as one of their top real estate speakers.

And regardless of what anybody thinks, likes or dislikes about Trumpers programs, tax liens have been in our country for over 300 years since before our constitution. It’s a phenomenal investment. Trump puts his name on it as a draw to get people to come to the show. So I doing an event once for Trump in LA, an investor from New Zealand flew up. He said, this is phenomenal. Can we do this from New Zealand? I said, you can do it from anywhere in the world you want to. We have 3000 counties in the United States. Trust me when I tell you, any one of our counties will sell you a tax lien. So said, bring your talk to New Zealand.

Dan Eckelman (03:21.516)
I left Trump Organization. I private labeled a taxing course with another attorney out of Texas. I put my label on it, went to New Zealand with it. Did a 14 city tour in 14 days, north to south island New Zealand and sold a million dollars on my training class in two weeks. mean, the whole country knows me. Then went to Sydney, Australia the next weekend while I on that side of the world. So sold another half million to a real estate group. And then I started realizing, wait a minute, I could take this anywhere. I don’t need Trump’s name behind it. I don’t need a brand at all. I could take it anywhere in the world.

So I started becoming well known in the international speaking circuits. That’s when I got a call from Richard and Veronica Tan of Success Resources out of Singapore, largest seminar company in the world. And they became international promoters. They put me on stage with Tony Blair, Robert Kiyosaki, Jordan Buffett, Wolf of Wall Street, Mark Victor Hansen, Chicken Soup, Robert Allen, Laura Langmeier, Spike Kummer. On the biggest stages in the world, we’re the biggest speakers in the world, speaking to five, 10, 20,000 people. Bodyguards, drivers, red carpets, dinners, the whole work. So big international run there.

Kristen Knapp (04:21.522)
That’s incredible. mean, I want to definitely get into the tax lien part of it, but before we get there, how would like, because you know, you were a broker and then you were just kind of thrust into the spotlight. What was that like? Like it seems like it was very natural for you to build your speaking career.

Dan Eckelman (04:25.354)
Yeah, sure.

Dan Eckelman (04:36.619)
Yeah, it was pretty natural. know, it was pretty natural to they asked me if I want to teach on the back end. And I said, sure. Teach about tax liens. So I said, yeah, I mean, not tax liens, but privately held notes and invoice financing. I said, sure. mean, you know the most about yourself. That’s number one. Number two, you most about what you do for a living. That’s number two. Anybody can talk about yourself or talk about what you do for a living. So that’s what I did. And that’s when they said, hey, after a few months, you’re a good speaker. Let’s speak on the front end. So what they did

they said here’s a 167 page script memorize it word for word which is not the way to do it. Anybody wanting to learn how to speak from the stage don’t do that. So but they had to say that from a compliant standpoint. Yes, I read it. I wrote it. I typed it. I recorded it. I listened to it. I spoke it. Every sense in my body I could put it in my brain and then I they said okay are you ready? I said no never will I ever be ready. No actor does this ever. That’s 167 pages crazy.

He well, just do it. We’re to book Dallas, Texas for you as your first show and just go do it. If you bomb, go back and start teaching again. So they booked me to Marriott and it’s all my first show. And I got up and I started speaking. And then suddenly as I was going through it, they cut me off and the owners were there, managers were there, the crew was there. So I wrapped it up. People went up in the back and signed up. We had a powwow afterwards. And they go, that was unbelievable.

Kristen Knapp (05:44.71)
No pressure. Yeah.

Dan Eckelman (06:04.426)
You signed up more than any of our speakers that are currently at our veterans with our, you’ve done better than anybody ever began to speak, let alone the ones that currently work for us for years. Like, whoa, whoa, whoa, a minute. You cut me off. Well, it’s supposed to be a 90 minute speech. You’re already at two hours and 20 minutes, you’re still talking. So what that told me was is the power of our own mind that if we push ourselves a little bit further, go a little bit beyond, kind of like an iceberg, if you will, 10 % of it’s taken out of the water.

Kristen Knapp (06:20.968)
Hahaha

Dan Eckelman (06:33.907)
That’s what most people’s level of accomplishment will ever be at that level. Lower that water is 90 % below the water. Lower that water line by 5%. You’ve just increased your ability to accomplish anything by 50%. So you just have to go a little bit further and push a little bit further.

Kristen Knapp (06:38.45)
Bye.

Kristen Knapp (06:47.749)
Mm-hmm.

Kristen Knapp (06:51.258)
Absolutely, I mean you sound like kind of a master salesman. What’s like what are some sales techniques that you can share with people?

Dan Eckelman (06:58.57)
It is funny to see that because we get on my seat and show this with you when I was in Sydney Australia right here book called millionaire and it says here written by written by Steven McKnight and Stu Silver and it says Then a guy named Dan Ackerman gave a presentation at property investing.com annual millionaire maker conference if there’s a better salesman on planet earth, I’d the medium So so yeah, I’m pretty good at sales

Kristen Knapp (07:23.72)
There you go.

Dan Eckelman (07:27.016)
and know and I do it from the stage you know number one closing technique when it comes to sales is ask for it. Always has been number one closing technique always will be just ask for it.

Kristen Knapp (07:37.136)
Yeah. Explain that a little bit more.

Dan Eckelman (07:41.726)
Well, if, if, okay, for example, if I’m talking on my taxing services, my, my course, and people get up and they sign up and go to the back, then pretty much just ask them, you know, to get enrolled, ask for it. You have to ask for them to do it. Cause some people are on the fence and they don’t know what to do. And so I’ll, you know, the objections are just phenomenal that people have, you know, so when it comes to sales like that, and they’ll come with every objection in the book, you just have to kind of.

them what to do and ask for it. How can I help you get enrolled today? And then as they start telling me I stop them after the first three words and I say stop before I answer your question. If I your question satisfactorily will you be getting enrolled today?

period. If they say no, then I’m going to go into somebody else. I’m going to come back to you a little bit. If they say yes, as soon as they answer that question satisfactorily, and what they’re going to do is they’re to give their life story. Well, back in 1956, when I said, no, no, no, no, no, what’s your question? Well, I really said, no, no, no, what’s your question? Get them to ask that question. And then now let’s get you enrolled. And then you just have to control the situation, especially when it comes to sales.

Kristen Knapp (08:29.723)
Yeah.

Kristen Knapp (08:55.206)
And I think another thing that you just demonstrated is also the power of silence, the power of asking a question and shutting up, which I have a problem with. Like I think that that’s a really important sales technique that a lot of people miss.

Dan Eckelman (09:03.069)
Yeah.

Dan Eckelman (09:07.273)
Yeah, well, there’s the yes or no close, which was that. Then there’s the either or close. You know, will you be enrolling in this level or this level? And then they have to choose one of the two. So there’s plenty of different closing techniques out there. You know, this one guy said, well, I don’t have the money. I said, you don’t have the money with you or you don’t have it at all. He goes, well, I don’t have it at all. I go, all right, here’s a briefcase of one million dollars. You got one hour. Go get me three grand. Could you get it? Of course I could.

Kristen Knapp (09:16.007)
Yeah.

Dan Eckelman (09:36.893)
Hold on, you just said you didn’t have it.

Kristen Knapp (09:39.346)
Mm-hmm.

Dan Eckelman (09:41.673)
is overcoming their objections. They’re stuck. you got to overcome that with them. And once you overcome that mindset with them, okay, you got me on that one. Or the good one is I have to ask my spouse. We don’t make any decisions without each other. I go, here’s the keys right here in my pocket to Red Ferrari right outside the door of this hotel for three grand. It’s yours. You have to ask your wife. He says, nope, let’s get you enrolled. they’re just, know, sales is fun. But you really have to, you really have to.

Kristen Knapp (10:04.25)
Yeah.

Dan Eckelman (10:10.568)
know how to do it and you learn how to do it by their objections then they become the same objections over and over and over again and you just have to learn how to have them overcome. Just get over that stump, get over that hill.

Kristen Knapp (10:22.704)
Yeah, and I think a lot of people stop at just rejection in general. I think people are very scared of rejection and that keeps people from even asking the questions like you said.

Dan Eckelman (10:32.603)
Absolutely. know, the thing I do when I speak is, obviously in speaking and when you’re building a speech, there’s a science to it. The delivery of the art. But what I do is a value proposition leads up to the price point and then I do take action close. So at the end of my presentation, I’m going to say, how many people in this room? By this time, I use a lot of neuro linguistic programming and Pavlov’s cognitive theory behavior. So when I raise my hand, they raise their hand. When I’m nodding my head, they nod their head.

I’ve already conditioned to do that all throughout my presentation. At the end, my call to action is I say, how many people in this room tell you you can be successful investing in taxing certificates? If you had someone phenomenally successful, take you by the hand, walk you down this path, put this kind of money in your pocket. Who wants that level of success? And my hand goes up higher and theirs goes up. I say, if your hands up, stand up. If your hands up, stand up, because they’re going to do what you tell them to do. They stand up and I go the first 15 to go to the back of the room.

get a bonus, go now, there goes one, there goes two, and they start running as fast as they can. They’re knocking chairs over, they’re falling down, they’re throwing their credit cards. It’s just a tactic, but it’s really a learning, you’re conditioning them all throughout your presentation. That’s a whole nother podcast about public speaking.

Kristen Knapp (11:32.583)
You

Kristen Knapp (11:42.394)
Mm-hmm. That’s rude.

Kristen Knapp (11:46.83)
Yeah, that’s really fascinating. And I bet it’s hard to sell you on something. You can sniff out everything. So let’s get into tax liens. You’re a big expert on it, and you’ve educated so many people about it. I think it’s an area of real estate that people aren’t super familiar in. Yeah, just break down what it is, why people should get involved in this.

Dan Eckelman (11:52.712)
Yeah, pretty much. Yeah. Sure.

Dan Eckelman (12:07.272)
Sure. Absolutely. Well, if you own a piece of property in United States of America, you owe a property tax. If you don’t pay your property taxes when they’re due, you’re going to get a certified letter from the county stating you’re in default. The county will then take that property tax debt that you owe them. They’re going to turn it into what’s called a tax lien certificate. They then take that certificate and they sell it in the open market. Anybody in the world can invest in tax lien certificates in any one of our counties, in any one of our states. It’s a sale conducted by a government agency

of tax liens for delinquent taxes on real estate. There are three parties involved to a tax sale or any tax lien. There’s a property owner who defaults on the property tax. There’s the county who has pretty much filed a lien on the property and created the tax lien certificate and there’s the investor which is you. Three parties. The property owner, the government and you. Now these tax liens are typically sold at auctions all throughout the United States and every county has a different auction in each and every state.

Some of them are bi-annually, some of them are even annually, where there’s different bidding techniques that they go through when they have these auctions. There’s one called random bidding. You sign up, your name pops up in the computer randomly, and it’s your turn to bid. We have bid down the interest. So in Ohio, it’s 18%. They’re going to say, who wants it at 18 %? And hands go up. Who wants it 17 and half, 17, 15, 14? You bid down the interest. And whoever’s hand is left, that’s what they get it for.

And there’s also, they up-bid it based on the taxing certificate value itself. Who wants it for 500 bucks? Who wants it for 550, 600, 700, 800? You increase the value of it and buy it that way. But it’s all done at auctions. But what I teach people how to do, because those auctions are typically attended by banks, many, many banks. And then we sit there and watch them go through the auction and take up all the good stuff, the expensive stuff.

And then what I was left is for the individual investor that can afford the smaller ones because you can invest in taxing certificates in any size, any dollar amount in any county, any state, anywhere in the world or in world, the country. It’s mandated by the state, backed by federal government and collateralized by real estate. There’s your three pluses right there. 16, 25 % return on your money. You can win out over the institutional investors, which are the bankers. And what I do is I teach people how to buy them before and after the sale. There’s something called

Dan Eckelman (14:33.637)
Each and every county has at the recorder’s office what’s called assignment of purchase. It’s a book because not everybody’s going to default on their taxes all at once. And they say, OK, it’s the end of the year. Nobody’s paid. So now at the very end of the year, we’re going to have these auctions. Well, people don’t make false delinquents all throughout the year. Right. So if they have a taxing certificate auction in February, the people who defaulted in March, April, May, June, so on and so forth all over to January the next year.

then they’re going to add them all together and they’re going to put them in the auction. However, at those auctions there are thousands and thousands and thousands of tax liens at all different levels and all different sizes back to all different types of property. They don’t sell all of them. They don’t sell a smidgen of them. the other investors, single investors can bet on them as well but can bet any time how much money you have but they go to what’s called assignment of purchase. So what we teach people how to do is go right to the county.

and buy one directly from the county right from the salmon and purchase book get online and buy them directly. You don’t need to wait for the auction.

Kristen Knapp (15:38.504)
Got it, so you’re not going to the auctions.

Dan Eckelman (15:40.518)
right teach them how to buy before and after the sale which has how to invest with a short term or a long term goal. So in taxing you can invest in a short term goal to create residual income or keep it for the long term right and then how to purchase them basically online off from the comfort of your own home. So again this process of illustration of how it works is the homeowner doesn’t pay the property tax.

The county sells a taxing to an investor like you, for example. The property owner pays the government all the money that they pay plus interest on their property, plus penalty on their property for paying it late. Then you just make 200 % than any bank accounts are ever going to pay you. Moral, you know? So this is what I love about it. You the investor have complete 100 % control of your investment. That’s why I like it. You get to choose the type of jurisdiction you want to invest in. You can invest in any county, any state.

Kristen Knapp (16:24.22)
Mm.

Dan Eckelman (16:38.085)
doesn’t matter where you live anywhere in the world. Any one of our counties, any one of our states will say a tax lien. You get to choose the size of the lien and I don’t care how much it is. There are liens out there for a million dollars plus for a hundred thousand, a thousand, ten thousand, ten bucks. know it doesn’t really matter. They’re out there and then you get to choose the type of property you want as collateral. Before you invest in that tax lien you’ll do due diligence on the property. You will know every single thing about that property before you invest one dollar.

and we teach how to do that properly. Obviously, again, fair market value, Location, location, location, same thing for tax liens. Obviously, you don’t want to buy a tax lien on top of an Indian bell ground, on top of toxic waste dump in a farmer’s field, 100 miles off the road, because you end up owning it, then you got to pay property taxes on it. What are you going do with it? You can’t sell it, right? And then, so you get to choose the interest rate you want as well, because every single state in the United States of America has a different industry mandated by that state, like I said.

Ohio’s 18%. Florida’s 18%. Arizona’s 24%. Illinois is 36%. So it’s just different, you know, in different states, in different states all throughout the country. So St. Louis, 18%. Return on your money. And so I think it was in 2016, if I’m correct, that roughly $11.8 billion of property taxes

Kristen Knapp (17:50.386)
Right.

Dan Eckelman (18:05.796)
And that year alone, I’ve done a lot of research since, we’re not collected, we’re not paid. There’s so much leftover out there, anybody can invest in these. So if we take a city or a country like, a state like Iowa, and Iowa’s 24 % return. So let’s say we have a guy named Bob, and Bob owns a piece of property worth $250,000, and that’s the fair market value. He owes $1,800 of property taxes.

His mortgage is $175,000, his first mortgage. Now the investor, Mike comes along and he says, hey, Bob defaults on his property taxes. So here’s the thing about tax liens. The property owner always only deals with the county. The investor always only deals with the county. The investor never talks to the homeowner and vice versa. So Bob owns this property, this property of $250 million. He defaults it on his property taxes of $1,800.

Kristen Knapp (18:51.72)
Mm-hmm.

Dan Eckelman (19:04.003)
Mike comes along and says, there’s a certificate for 1800 bucks, 24%. So Mike contacts the county, he buys a certificate. So what he’s doing, he’s paying the property tax for Bob, exactly what he owes to the county of $1,800. And then he owns that certificate and he gets about a 600 % more returns than any other bank account is gonna give him on something like that. So now every single state has what’s called a redemption period or a grace period.

and integrates period such as Ohio is a one year redemption period, which means the property owner has a year to catch up and pay their property taxes. The principal that they owe, the taxes they owe plus penalty mandated by that state plus the interest rate mandated by the state and the penalties also the state requires. And as soon as the property owner pays what they owe plus penalty and interest, then the county just sends the check to you, writes your mailbox.

you’ve already paid for them. You’ve already paid it. They kind of just want their money. They got to keep that cash flow running. Now 92 % of the people who default on their property taxes will pay. 92 % is going to pay but there’s the beauty of this is you’re the principal or you’re investor receive your principal and interest when the

Kristen Knapp (20:27.816)
Hold on just one second. Hold on just one second. The recording stopped.