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Show Summary
In this conversation, Dylan Silver interviews Allison Stewart, a tax foreclosure investor and coach from North Carolina. They cover the intricacies of tax foreclosure investing, including the process, due diligence, auction dynamics, and the unique aspects of the North Carolina market. Allison shares her personal journey from being a salon owner to becoming a successful investor and coach, highlighting her experiences acquiring properties through auctions, including Airbnb investments. She emphasizes the importance of understanding risks, market trends, property values, and the benefits of building connections in real estate. The conversation also touches on her new book aimed at guiding investors in the tax foreclosure space.
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Investor Fuel Show Transcript:
Dylan Silver (00:00)
So if I’m getting started in the tax foreclosure space in North Carolina, I know it’s gonna be different based on every deal, but how much of a nest egg would you say that I’ve got to have saved in order to purchase one of these tax foreclosure deals?Allison Stewart (00:15)
I saythe minimum is $10,000.
No.
Dylan Silver (00:17)
You’rekidding. So what’s that? What’s that? I mean, is that a livable home? What’s the condition of that home?
Allison Stewart (00:23)
Well, normally youhave to kind of do your due diligence. Sometimes it’s just where people have gotten behind on their taxes. So the house is perfectly fine, right?
Dylan Silver (02:03)
Hey folks, welcome back to the show. Today’s guest, Allison Stewart is a North Carolina based tax foreclosure investor and coach. She also has 30 years of experience as a salon owner and has an entrepreneurial career really focused on customer satisfaction and business growth. You can find her on Instagram at the underscore hair underscore extensions and also at the underscore hood underscore flips. Allison, thanks for taking the time today.Allison Stewart (02:31)
Thanks for havingme on.
Dylan Silver (02:34)
You know, when we talk about tax foreclosures, this is an area where I would say, you know, it’s pretty niched down because you’re focusing specifically on folks who in many cases have equity in their home, but lost the home due to taxes. In North Carolina specifically, where are these tax foreclosures being sold predominantly? Is it at the County Courthouse steps? Is it being sold online? Where do people go?Allison Stewart (03:02)
So you can onlyfind them online. It will say the county steps. It used to be that before COVID, but however now is two attorney firms that holds the tax foreclosures in North Carolina. And each county is totally different.
Dylan Silver (03:15)
So if I’m getting started in the tax foreclosure space in North Carolina, I know it’s gonna be different based on every deal, but how much of a nest egg would you say that I’ve got to have saved in order to purchase one of these tax foreclosure deals?Allison Stewart (03:30)
I saythe minimum is $10,000.
No.
Dylan Silver (03:35)
You’rekidding. So what’s that? What’s that? I mean, is that a livable home? What’s the condition of that home?
Allison Stewart (03:40)
Well, normally youhave to kind of do your due diligence. Sometimes it’s just where people have gotten behind on their taxes. So the house is perfectly fine, right?
And then you can have a situation where somebody just abandoned it because they know that they couldn’t pay the taxes. So doing your due diligence is pretty much finding the property, right? Doing your due diligence, going by, looking at it, because it’s a law that you can’t view these properties inside before you buy them. So it’s always buyers beware.
Dylan Silver (04:06)
That’s very interesting. Typically when these properties are being sold, what’s the competitiveness? Is there like a bidding system and are these properties very much being bid up or is it, are there some cases where you might go into an auction and you might be the only one bidding on a property?Allison Stewart (04:24)
Great question.North Carolina is totally different. Like I said, each state, each county is totally different. However, here in North Carolina, they have a 14 day upset bid process. Meaning, you put 10 % down when you bid on it, you have to go to the county where the actual property is located. You put 10 % down and then you have 14 days for somebody else can upset the bid. Therefore, you have to watch it, right?
If you someone doesn’t upset the bid, then it’s your bid and then within two weeks you have to pay the balance in full.
Dylan Silver (05:45)
That’s an interesting system. So there’s a little bit of a duration there. Now, what’s the is there a redemption period for these sellers? Can they take the property back or does that not exist in North Carolina?Allison Stewart (05:56)
No, in North Carolinait doesn’t exist. Some states it does, but not in North Carolina.
Dylan Silver (06:01)
once it’s yours, it’s yours. I wanna ask you, for folks who are getting started in this space, right, they’re, rightly so, maybe like, hey, I want to know what the right way to do this is. It’s great that I can get some properties for, you know, really you know, pennies on a dollar, $10,000. But also too, I’m walking in and I don’t know exactly, you know, what I’m walking into, because I can’t be inside the home. What kind of due diligence can people do if they can’t step inside the home?Allison Stewart (06:17)
Excellent.Absolutely.
So the due diligence is you know it once you get into this business, you know when you’re buying a house period in general the buck of your money is going to come from the roof and the windows, right?
So therefore you have to kind of put that into perspective when you’re going in the house. It’s very not, it’s not that expensive to upgrade electrical plumbing and things of that nature, cosmetics. But the main thing is the roof and the windows. That’s where the buck of your money is going to come from. So you can do, you always have to do your due diligence. Like you need to find out how long has the property been vacant? You can do all your research through the county website. And then, I mean, it’s pretty uphill from there.
Dylan Silver (07:10)
Now, before we hopped on here, you did mention to me you do a lot of investing in Ohio. You’re in North Carolina by way of Ohio. Tell me a little bit about that.Allison Stewart (07:19)
Soborn and raised in Cleveland, Ohio, I came to Charlotte ⁓ in 09. Like you mentioned, I’m a lifetime salon owner. So when I came to North Carolina 09, majority of my money came from behind the chair. So at that point, I just started doing my due diligence, looking for homes.
looking for tax foreclosures per se because it’s a total difference between tax foreclosures and regular foreclosures. With tax foreclosures, get the house free and clear. No liens, nothing attached to it. So therefore, by me doing that, I did not want to buy a house traditionally. So I started just buying tax foreclosures from there on out.
Dylan Silver (07:57)
Now…One of the questions I think a lot of people have is, well, if I’m going to start in one area of real estate, which one should I start? Should I start in, you know, single family fix and flip? Should I start in short term rental? Where am I going to find these leads? Am I going to knock doors? Am I going to send out mailers? Am I going to do cold calls and so on and so forth? And you have found the niche in the tax foreclosure space. Were you looking at some of these other lead sources prior to
really digging down into the tax foreclosure space.
Allison Stewart (08:29)
Absolutely.Believe it or not, my mom born and raised Omaha, Nebraska. So the first property that I ever bought, it was a simple assumption. That’s not even heard of nowadays. A simple assumption was pretty much where you could just buy a mortgage, just pay the money and then the mortgage is automatically transferred to you as long as you have the funds. That’s not even heard of now. But however, ⁓ my God. But however, the question.
Dylan Silver (08:59)
Simpleassumption and then tax foreclosures.
Allison Stewart (09:02)
you, I totally, I got, I’m sorry. Please refer, I’m so sorry, I apologize. But that’s I started off is buying just simple assumptions, regular mortgages. When I was pretty young, maybe about 18 or 19, I lost a home, of course. So once I lost that home, know, foreclosed on that home, I made a vow to myself that I would never lose another one.Dylan Silver (09:07)
But that’s okay. Let me me me pivot a bit here. SoThat’s okay.
wow.
Allison Stewart (09:29)
And the only way that I can do that is to own my home, right? Free and clear. And the only way that I can get it free and clear without spending tons and tons of money and buying the houses for pennies on a dollar, which I just, just, just released a book that’s entitled, Tax Foreclosures, Buying Homes, Properties for Pennies on a Dollar. So ⁓ once I experienced that of losing a house, right? I never wanted to go that route again.So that’s the main reason why I got into tax foreclosures.
Dylan Silver (10:35)
Now, I’ve been seeing a lot and I don’t know where exactly this may be happening, but I’ve been seeing some things that say, if a property is being sold at auction in some states, they’re basically giving the seller the equity in the home. I’m not sure what that’s based off of, but one of the great aspects of these auctions is that, like we said, you could acquire a property for $10,000. Is there…any risk right now in either Ohio or North Carolina or North Carolina and are people talking about this idea of, we may change the way the system works.
Allison Stewart (11:15)
heard of anything like that and I would say it’s risky. Anytime you’re into real estate is risky. You have to be a risk taker when you start to dealing with real estate period in general, especially when you’re talking about foreclosures. Like I explained, tax foreclosures you get the title free and clear, right? No, tax foreclosure is going to wipe out any liens on a property. So I feel personally that that’s the only real estate that’s risk free.Dylan Silver (11:45)
Now, I do want to pivot a bit here, Allison, and ask you about the salon world and the real estate world. I think, you know, when we talk about, you know, building a business, right, ⁓ I forget exactly who told this to me, but, you know, other than, you know, a therapist, and maybe sometimes even more than a therapist, people trust the people that do their hair with just about everything. Have you found real estate deals through being a salon owner? Have you seen like your sphere increase through people that were sitting in your chair?Allison Stewart (12:14)
No,what I find in my chair is all my clients want to start buying homes from the tax foreclosure sale. I have not gotten any deals because sometimes I kind of like to try to keep it separate, right? But ⁓ I do find out a lot of things about, because majority of my clients, I’m in uptown Charlottesville, a bunch of my clients are corporate America. ⁓
Bank of America, Wells Fargo, like I mentioned, this is like the second largest financial capital. So I have clients that, you know, some of my clients have four or five, $600,000, you know, mortgages, and they kind of want to get into tax foreclosures on the site, but I try to kind of keep it separate.
Dylan Silver (12:54)
Now, when we talk about coaching people in this space, I mean, I’m asking questions, you know, somewhat from a curious perspective, like, hey, I want to know how to invest in tax foreclosures in North Carolina. Is there like an avatar of someone who’s successful at this? Is there a specific mentality or a personality of someone who does well in tax foreclosures?Allison Stewart (13:15)
⁓ orthe only one that I can think of and that know of personally is myself, right? However, when I meet people, I travel like I’m three days here, three days in Cleveland. I spread the word to anybody because I feel like one home at a time, right? One property at a time. You have people that are in quest to supplement their income, right? So the knowledge that I have, I share it.
Dylan Silver (13:40)
Now, one of the questions people typically have for me, know, when it comes to wholesale or getting started in real estate, is what are the steps that I have to do in order to get my first deal? Now, in tax foreclosures, it’s a little bit simplified, I would think to a degree, but at the same point in time, I think there could potentially be some of these issues, like for instance, title issues.For instance, there may be, and I don’t know how often that this happens, but there may be some type of unforeseen ⁓ foundation issues that you walk in and I say, well now we’ve got a bigger issue on our hands. Other than simply buying the property, what are the biggest issues that you see come up in tax foreclosures?
Allison Stewart (14:25)
Well, honestly,I’m trying to think about from my personal experience, what’s the major, the most, the major issue that I’ve ever ran across? I bought a property in Hickory, North Carolina. Now this is in Hickory, North Carolina. It was a trailer home, however, the land is included and that’s what I need, know, when you, of course, when you buy property, it’s whatever on the land and the property included, right? I bought a trailer at the auction for 14,000. It was a…
elderly man that was living in a property. Now this is my own personal experience. It was an elderly man living in a property and the living conditions were horrible, right? I almost backed out of that deal because like I told you, you have time where you can count, you have 14 days before you have to pay the balance. However, the most difficult was me is that I had to evict the person that was in the property. Other than that, because when you buy the properties, like I keep mentioning, when you buy tax workloads, because people get it so confused,
a tax for a closure is gonna even wipe out a mortgage, right? It’ll wipe out a mortgage. Yes, it wipes out mortgages, it wipes out taxes, because taxes is the main thing, right? Because you’re paying those back taxes pretty much.
