Posted June 10th, 2007 by Joe Kaiser

We view the auction as an "exit strategy."

Dear Rob,

I’d like to talk about the April 10, 2006 “Ask the AG” column, “Be Cautious of Mortgage Foreclosure “Rescues,”

As you can imagine, I have a few problems with it since it’s written during the time period I was under your office’s investigation and presumably, is about me.

Let’s look at just this one paragraph from the column . . .

“We’ve also seen instances of schemers preying on homeowners who have fallen behind on their property taxes. Washington laws only allow someone who has a legal interest in the property to pay property taxes. The fraudster offers to pay outstanding taxes so the homeowner can avoid foreclosure and convinces the homeowner to turn over the property title. But the con never pays the taxes. Consequently, the home is foreclosed on, sold at auction and tax debts are paid. The con then claims the leftover money from the sale is his – despite state law that indicates it should be paid to the person who owned the property at the time the court authorized the foreclosure.”— Robert M. McKenna

what I do

I do buy properties from people who are “behind on their property taxes,” so this is something I can really talk about.

Rob, I am neither a “schemer,” a “fraudster” nor a “con.” I’m simply an investor who buys property from people in tax foreclosure. But I don’t “offer to pay outstanding taxes so the homeowner can avoid foreclosure,” nor do I “convince the homeowner to turn over the property title.”

What I do is buy their properties, and yes, I sometimes let those properties continue on to tax foreclosure auction.


We view the auction as an “exit strategy” and like investors have done for years, we often choose to dispose of our properties at the sale.

Since the county prosecutor was kind enough to schedule an auction and advertise it for us, and since there will likely be 300 people showing up to buy (most with cashier’s checks in their pockets), selling our properties at the tax foreclosure auction is a sound business strategy.

There is nothing remotely improper with selling your properties at a tax sale. You even suggest doing so on your website.

we agree to a number that works

So, Rob, let’s for instance say you’ve got a property in an upcoming sale and I contact you to see what you plan to do with it. If you tell me, “I’m just letting it go back to the county; you want it, you can have it,” I’ll offer you a couple hundred bucks for your time and trouble and take it off your hands.

Is that a scam? Hardly.

You don’t want it, know it has little or no value, and know you aren’t about to pay another nickel in property taxes. I offer to buy it from you, we agree to a number that “works” for the both of us and we do the deal.

Again, a scam?

If so, I’d really like to hear why you believe that, because here’s a willing seller and a willing buyer freely contracting and participating in a sale they both want to see happen.

There is no scheme, no scam and no con. It’s a silly notion to put forth and the very fact you’re calling this sort of transaction a scam demonstrates how out-of-control this investigation has become.

This is a simple real estate transaction, the likes of which happen every day. Calling it a scam borders on ridiculous.

So, the question becomes, what part of the above transaction do you consider improper?

Certainly, it’s not the deal itself; that’s just the two of us transacting.

paying the back taxes is your argument?

But to do that deal and then not pay the taxes? That’s the only thing you’ve got to argue the “scam” notion, and that’s just as silly. Let’s look at it again.

You’ve decided to walk away from a property and we’ve hooked up, done our deal, and now I own it.

How does my paying or not paying the outstanding property taxes impact you?

It doesn’t. No, not in the least.

Or better yet, what purpose would I have in your claim that “The fraudster offers to pay outstanding taxes so the homeowner can avoid foreclosure . . . ”, as mentioned on your website?

Which, by the way, never happened, either.

Rob, paying or not paying delinquent property taxes has no impact on you as the seller.



You don’t own that property anymore, there are no credit issues with tax foreclosures, and there’s no possibility of a monetary judgment owed against you or me or anyone else if and when foreclosure finally takes place.

here’s reality

We don’t tell people we’ll save their credit when credit isn’t even an issue, nor do we tell people we can help them avoid foreclosure when, again, there are no foreclosure issues in a tax sale matter.

Nor do we tell them we’ll pay the property taxes when doing so has no impact on them in any manner. Once it’s our property, the decision to pay or not pay taxes will be based on what makes the most sense ($) and frankly, is none of the previous owner’s business.

What we do tell people is “would $200 help?” And when they say “sounds good to me,” we do that deal and they get paid.

my call, not yours

As the property owner, it’s 100% my call to do whatever I deem maximizes my profits. That can be paying the taxes and keeping or selling the property, or I can decide to let it go to sale and take my chances that overage will happen.

In any event, there is no scam taking place. And, lacking any evidence to the contrary, your office should be embarrassed for even suggesting it.

Publicly associating me with a real estate scam, Rob, is a big deal. Since doing so can only destroy my reputation and severely impact my livelihood as an investor, author, and information marketer, proceeding cautiously should have been your course of action.

But it was not.

Apparently, press releases and headlines are more important than the truth, and if in the process destroying me and my family is what it takes to score a few points, so be it?



Joe Kaiser

16 Responses to: “Fraudster?”

  1. Brad Crouch responds:
    Posted: June 10th, 2007 at 12:11 pm


    Your letter was respectful while at the same time answering the outrageous allegations, very well.

    I think you come off as an intelligent, wrongfully accused guy.

    Way to go!

    Brad Crouch

  2. John responds:
    Posted: June 10th, 2007 at 5:15 pm

    Unfortunately, bureaucrats like these care nothing about the truth or even the LAW, for that matter. They are self-serving and myopic and their real commitment is not “serving the people”, it’s getting ahead POLITICALLY. If you have designs on a powerful elected position, what’s the best thing to do? Demonstrate that you’ve saved the unsuspecting public from The Bad Guys. While it’s laudable to want to protect the people, it’s Orwellain to have a top attorney who’s unconcerned with the law. Real estate law is pretty straightforward stuff. It’s disturbing when the law is used for self-promotion and fodder for reelection campaigns.

  3. Jack Stivers responds:
    Posted: June 10th, 2007 at 5:46 pm

    This is an interesting approach to defending yourself against unreasonable persecution. I fear you have an Everest-sized climb, because such things as truth, fair play, and justice have little bearing on headline-hungry AGs and the court system in general.

    The disconcerting thing is the perverted powers that an AG commands, including, but not limited to the power to libel and slander, to determine the verdict prior to the trial, and to skew the trial with the aformentioned slander and libel.

    Just as a healthy person should shun hospitals, so should innocent people avoid courtrooms. Nothing good comes from entering either institution.

    That said, I wish you luck (you’ll need it in spades) and the sudden appearance of an even tastier target with a much bigger political payoff.


  4. Joe Kaiser responds:
    Posted: June 10th, 2007 at 6:18 pm

    Jack, thanks for the comments, but I have no need for luck and will not be counting on it to save my bacon.

    I have something far better . . . I have the truth and the powers that be will just have to deal with it because I will not be backing down anytime soon.


  5. Ken responds:
    Posted: June 10th, 2007 at 6:20 pm

    Joe-Your strategy to sell the property via the tax auction is genius. I know someone here in Florida that unloaded a house that was gutted inside at a regular foreclosure auction. One of his LLC’s held the mortgage and his other LLC held title. He landscaped and painted outside of the house and then boarded it up. His mortgage LLC foreclosed and sold the house netting him a $17,000 profit.

  6. Joe Kaiser responds:
    Posted: June 10th, 2007 at 6:34 pm

    Ken, here’s reality . . . you give me a room with 300 eager real estate buyers (with cashier’s checks in their back pockets, to boot) and I guarantee, I’ll figure out something to sell them ;-).


  7. Redline responds:
    Posted: June 10th, 2007 at 8:28 pm

    Joe – this is certainly an interesting venue to have your voice heard. Knowing you for all these years, reading your material, talking with you … I know this is well thought out. Often times people don’t get a chance to get their story out. I know how court rooms play, I’ve been on a jury before.

    All I can say is … kick their ass and show this whole case for what it is: A bunch of trumped up bullshit by an over zealous AG. Too bad these guys didn’t learn their lesson from Nifong.


  8. Christopher B. responds:
    Posted: June 11th, 2007 at 4:24 am

    It is clear they are going to try this case in the media by using the frustration of those in foreclosure to build consensus. Pretty soon they’ll be blaming you for the sudden increase in foreclosures.

  9. Jack Stivers responds:
    Posted: June 11th, 2007 at 4:14 am

    Truth, like beauty, is in the eye of the beholder. That said, I’d never bet against you, Joe.

    Good lu…, I mean best wishes–Jack

  10. bob responds:
    Posted: June 14th, 2007 at 6:53 pm

    I find it curious that the AG suggests this as an option…

    [You may file a chapter 13 bankruptcy petition and present a plan for catching up on your house payments.]

    … while at the same time failing to mention that nearly 4 out of 5 BK filings fail to make it to discharge.

    If we’re going to target fraudsters, perhaps we should be looking at the players involved in the bankruptcy system.

  11. Redline responds:
    Posted: June 14th, 2007 at 10:31 pm

    Bob, funny you mention that. All of us that work foreclosures know the fat living attorneys make off people in foreclosure just by filing BK’s alone. They could care less if it gets to discharge, as long as they can get several thousand in upfront fees for basically doing NOTHING for their clients. Most of them cannot afford a workout and fall right out anyway.

    CHA-CHING for the attorneys. I’m sure there are no states considering legislation stopping this abuse!

  12. John Blythe responds:
    Posted: July 13th, 2007 at 6:49 pm


    “The con then claims the leftover money from the sale is his – despite state law that indicates it should be paid to the person who owned the property at the time the court authorized the foreclosure.”


    This is my first comment so I know my comment will be moderated.

    Is Rob’s statement true? I notice he uses the word “should”…

    Seems likely you probably claimed those “leftover monies from the sale” as a key part of your exit/profit strategy.

    Why let it go to sale if you can’t collect the leftover?

    Do you in fact know whether you violated some law on this key point?

    I have looked at the tax-sale oppertunity in the past but felt it has an Achilles heel: Who is entitled to those “leftover monies” as far as the law is concerned? Or as far as a jury might be concerned?

    BTW: Agreed, the whole AG case is a turf fight. Fact is, many times those “leftover monies” remain unclaimed. Who do we suppose gets to keep them in the end?

    Hmmmm. Maybe they just don’t like competition….

  13. Joe Kaiser responds:
    Posted: July 13th, 2007 at 9:20 pm

    We have no need to do anything that isn’t 100% legitimate.

    Rob isn’t really aware of what he speaks in terms of the tax foreclosure statutes. The law says nothing of the sort, but that’s a matter we shall be litigating soon enough.

    I’m confident.


  14. John Blythe responds:
    Posted: July 14th, 2007 at 10:00 am

    Perhaps there will an oppertunity for you pursue a malicious prosecution case against these people. I hope so…

  15. Davido responds:
    Posted: August 1st, 2007 at 2:24 pm

    Joe, I’m fasinated by your ability to sometimes find your way around RCW 84.64.080. Frankly, I had given up on even trying to collect excess proceeds here in Thurston County. Robin Hunt, the treasurer here, even argues that I still don’t have a valid ” intererst” in a property in tax foreclosure when I buy out a lender’s first, 2nd or 3rd mortgage. Can you believe that?

  16. Joe Kaiser responds:
    Posted: August 1st, 2007 at 2:41 pm

    No, I can’t imagine. Clearly, buying out a lender’s interest gives you that interest.

    We had a similar instance in Whatcom County, because they didn’t like our documentation.

    But still, puhleese.


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