Alternative Investments?

Readers of my recent book, The Little Tax Lien Tax Deed Book, may come away thinking that I regard tax liens and deeds as the only investment worth making. The best investment?  Yes.  The safest (all things considered)?  Yes.  The leading alternative real estate investment?  Yes! But do I think you should never invest in anything else?  Not at all.  Alternative investments are a gamble, true, but some gambles are more reasonable than others, and worth the dabble.  Enough gambling in alternative investment fields will eventually drive you back to surer things, like liens and deeds, but careful alternative investment experience in other fields can be a learning experience. “What about stocks specifically, Mr. Franklin?  Have you any to recommend?” Well, I’d rather not go into specifics publicly, but if one is bound and determined to invest part of one’s funds in stocks, there is certainly an approach I recommend.  Review a few investment newsletters. Most are less than worthless, needless to say.  But not all. True, Wall Street disagrees, and the financial media has tended to follow their lead. For years, the Wall Street Journal would not accept any advertisements at all for investment newsletters.  Author Burton Malkiel roundly dismissed all investment newsletters in his classic A Random Walk Down Wall Street, and has done so unto the Seventh Edition of that book. In way it’s understandable.  Investment newsletters are the protozoa of the investment world, climbing up from the primeval slime of crank investment theories and striving to evolve into superior life forms like Warren Buffet.  Some have a more professional sheen than others: for instance, there are investment...

The More Things Change, The More They Stay The Same

Note: this appeared recently on the FBI web site at FBI.GOV: Former New York Tax Liens Investment Company Executive Pleads Guilty to Role in Bid Rigging Scheme at Municipal Tax Lien Auctions Investigation Has Yielded 15 Guilty Pleas to Date “WASHINGTON—A former New York-based tax liens company executive pleaded guilty today for his role in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of tax liens, the Department of Justice announced. “Vinaya K. Jessani, of New York City, entered a guilty plea in the U.S. District Court for the District of New Jersey in Newark to felony charges filed today. Under the plea agreement, Jessani has agreed to cooperate with the department’s ongoing investigation. “According to the charge, from at least as early as 1994 until as late as February 2009, Jessani, a former senior vice president who supervised the purchasing of municipal tax liens at auctions in New Jersey for the company he worked for, participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to, and instructing others to, allocate among certain bidders which liens each would bid on. The department said that Jessani and those under his supervision submitted bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates. “Today’s guilty plea demonstrates the Antitrust Division’s continuing effort to prosecute those who manipulate the competitive process in order to harm home and property owners,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division will continue...

Grilling The Tax Lien Gurus

When I first started working on The Little Tax Lien Tax Deed Book I felt a bit like the proverbial voice crying in the wilderness.  Scams were taking place left, right and center in in the tax lien world, but who was saying anything about it?  Well, I did, but you don’t want to cry foul alone.  So I was happy recently to see the well-known tax lien author and investor Larry Loftis step up to bat, and knock a few screw balls out of the park himself.  According to his Amazon page, Loftis is a Florida securities and real estate attorney, a tax lien investor, an adjunct law professor, and author of the notable introduction to tax lien investing, Profit By Investing In Real Estate Tax Liens, now in its second edition. I’ve read that he currently manages a tax lien pool of over twelve million dollars.  In short? The man appears competent and distinguished.  And he distinguished himself particularly well a while ago by scorching a number of the more scummy tax lien gurus out there in his newsletter.  You know the sort, of course:  the clowns in polyester suits on the informercials yowling about how you too can get incredible properties tomorrow for pennies on the dollar — provided you sign up for their five-figure-and-beyond weekend seminars today.  Loftis was blunt in dealing with these louts:  “…these seminar/infomercial gurus are not investors; they are salesmen.  They can easily make $50,000 in a single ninety-minute talk at a real estate seminar.  They can make $50 million if an infomercial works.  You can make a lot of money in this area if you are willing to lie.  And they...