Last year I wrote the following letter to Kitsap County Treasurer Barbara Stephenson, regarding the three successful overage plays we’d put together in her county.

Former AAG Cheryl Kringle has stated, in writing, that this letter is “threatening.”

I’d like to know why. Or, perhaps I’ve got the wrong letter (although this is the only such letter I can think of).

Please advise.

Cumulative, LLC
P. O. Box 64700
Tacoma, WA 98464

March 30, 2006

Barbara Stephenson
Kitsap County Treasurer
614 Division Place
Port Orchard, WA 98366

Re: Claim of Surplus Funds (2006 Kitsap CountyTax Sale)

Glen Pszczola (Aladdin Trust)
3749-001-001-0007
4358-001-023-0001
152602-2-017-2004

Toney & Beverly Montgomery
12240111092001

Daniel & Linda Pleger
2224020902008

Dear Barbara Stephenson:

Cumulative hereby claims the overage funds that resulted from the tax sale of the above referenced properties.

Please note that RCW 84.64.080 in no way prevents the owners of record from selling their interests in their claims. The ability to contract is a fundamental right and neither the state, the county, nor you can or should prevent anyone from selling his or her interest should he or she so choose.

Not coincidently, previous to the 2006 tax sale, Pszczola, Montgomerys, and Plegers in fact did exactly that.

Each party, being fully advised, deciding to secure an amount certain rather than “roll the dice” at the tax sale, exercised their right to contract and accepted our offer to purchase any overage claim that materialized.

Cumulative, LLC has paid each party that amount certain, in full, is the true owner of the overage funds, and is the only party legally entitled to apply for the funds (I have attached documentation that evidences our transaction and once again request an application to claim our funds).

Kitsap County, by this letter and the attached documentation, is formally on notice that the parties mentioned above have irrevocably assigned their interests in and to the overage funds to Cumulative, LLC.

Accordingly, be advised that should anyone other than Cumulative LLC attempt to collect the overage funds, he will be guilty of fraud, the illegal conversion of funds belonging to Cumulative LLC, and tortious intentional business interference.

Be further advised that should Kitsap County assist anyone other than Cumulative LLC in the execution of his attempted fraud and approve his application and pay out the funds in disregard of the documentation evidencing our purchase, Cumulative LLC will hold Kitsap County responsible for the entire amount of the claim and will not hesitate to bring an action against the county to make it whole.

I strongly suggest Kitsap County consider interpleading the overage funds into the Kitsap County Superior Court so the matter can be litigated appropriately.

Please advise of your intentions at your earliest convenience. Thank you.

Sincerely,

Joseph M. Kaiser, Manager
Cumulative, LLC

You be the judge

Your office considers this letter threatening, Rob?

How can that be?

Readers, what to you think?

Respectfully,

Joe Kaiser

Rachael owned a house in Kittitas County and last winter the two of us decided to partner up.

My role in the partnership?

Stopping her foreclosure.

And so, with just days remaining, I paid the taxes and brought that foreclosure to a grinding halt.

How do you suppose that made her feel?

I’m guessing pretty damn good.

What should she have done?

As an investor, I’m stunned by what I read on your web page, Be Cautious of Mortgage Foreclosure “Rescues.”

I’ve quoted you here . . .

Know that even if you lose your home, you may receive money. . . . You need to obtain independent advice on the value of your home and likelihood of receiving money from a foreclosure sale before signing any documents that might affect your rights to collect this equity.— April 10, 2006 “Ask the AG” column

Are you seriously advising someone in foreclosure to let her property go to auction and hope there’s money left on the table once the dust settles?

Say it ain’t so, Rob.

Suggesting a homeowner in foreclosure might be better off by letting her property go through the auction process is something only someone with no real world understanding of that process would suggest.

And clearly, that includes your staff.

don’t try this at home

It’s okay for investors to let properties go to sale and hope bidding activity creates overage profits.

That’s the sort of “roll of the dice” game play we can handle. We can, because when approached soundly, we have little money invested, making it a tolerable gamble.

Equally important, we likely have more than one property in the sale. In fact, if you look across the board, we may have 10 such properties in various county tax sales at any given time.

We know that in 30 or 40 percent of these sales, we’ll lose whatever we have invested because they’ll either get sold at auction for the opening bid amount or, more likely, get claimed by the county because there were no bids.

With 10 properties, the risk is manageable. Even if half result in losses, the upside is great enough for us to be confident we’ll do okay once the overall results are in.

But if you’re a homeowner thinking about letting your house go to sale and walking away with a big overage check?

You’d be nuts to consider it.

off the charts risk

A homeowner has ONE property. Letting it go to sale and hoping overage saves the day is nothing short of foolishness.

To suggest it as a viable option in addressing a foreclosure situation is more foolish, yet.

Even if the chance you’ll receive nothing happens only 30% of the time, when you have one property and no one bids at the sale, you just experienced receiving nothing 100% of the time.

Ouch.

should have let it go to sale?

Your office seems to be suggesting Rachael would have been better off crossing her fingers and letting her house go to sale.

That’s absurd.

This is the real world, where real dollars and real lives are at risk. In the real world, letting properties go to sale is the last thing a homeowner should consider.

case closed

Rachael called a couple weeks ago to thank us, having just cashed our check for $30,000.00. That was her share of the profits and the better alternative to risking it all at the Kittitas County tax foreclosure auction.

We paid the taxes last winter, and when the snow finally melted, we got the house fixed up and on the market.

That fix-up work included repairing the septic system, re-siding the rear of the house, installing a new bathroom floor, and a bunch of other things Rachael had no money to take care of herself.

Soon thereafter, a buyer made an offer, agreeing to pay almost exactly what we thought it would sell for, and last month that sale closed.

how we roll

There’s a typical foreclosure rescue for you, Rob.

That’s how we roll.

We take foreclosure off the table, take control of the situation, and then just flat out get things done.

Rachael called to say how happy she was with the way it all turned out. Your office, I imagine, will now call to let her know she’s been a victim of a foreclosure rescue scam.

Good luck with that.

To be continued . . .

Respectfully,

Joe Kaiser

I thought today would be a good time to discuss a real estate concept your office is unfamiliar with, EV.

EV is short for “Expected Value” and is most easily understood as your hourly rate.

Don’t worry, it’s so easy to figure out even a chimp could pull it off.

Smart investors determine in advance where their hourly rate is greatest and focus all their energies on that strategy, to the exclusion of all others.

So, when we determine strategy X is worth $20 per hour, and strategy Y is worth $100, we forget all about X and become an expert on Y.

taking dead aim

And when we stumble on to strategy Z, which we determine is worth upwards of $300 per hour, we no longer care about X or Y and instead we take dead aim at Z.

Z is where the money is. It’s where our EV is off the charts and our hourly rate is second to none.

That’s where we spend our day-to-day activities and how well we avoid distractions that take us away from working strategy Z is key to success.

the WSOP

Last week I decided to take part in the World Series of Poker main event, a $10,000 buy-in, No Limit Texas Hold ‘em tournament taking place this week in Las Vegas.

I was all set to head out a few days ago and take my shot at the estimated eight million dollar grand prize.

But then I got to thinking about my chances (not good) and the effort required (a week of 14 hour days), and the guys I’d be up against (the best players in the world).

What’s my EV?

Pretty much zero.

Certainly, the expectation is negative and the odds of me returning with a profit, much less my $10,000.00, are off the charts not good.

I decided to rethink this WSOP thing.

No gamble in me

And I decided I won’t be heading to Vegas anytime soon.

I’m just not willing to gamble at the moment and $10k is $10k and not coincidently, my attorney bills on this matter just from last month were $10k.

That means I need to make the very best of decisions and risking $10k on a speculative opportunity doesn’t seem like a good plan.

However . . .

I have cleared the decks for the week, thinking I’d be out of town playing a poker tournament, and that means I’ve got a free week.

A distraction-free week.

A chimp and a chair

What to do?

Rather than spend 14 hour days playing with chips all week long, I’ve decided to spend it playing with a chimp.

So, for an entire week, Bobo will be getting to work, attempting to put together one “real steal deal” after another, focused solely on strategies where his EV is off the charts.

And he’ll be doing it “jungle style.”

We’re teaming up, and you and everyone else interested in seeing what an investor on a mission with a chimp for a side-kick can do in a distraction-free week can come along for the adventure.

real time blogging

My goal is a dozen deals this week. That’s a dozen real deals, with profits built-in, 10x returns and certainty in the house.

No, it won’t be easy and yes, Bobo can be a pain in the you-know-what sometimes (and when things don’t go well he tends to throw poop), but we’re getting to work just the same.

Jungle Rules apply

Beginning Wednesday at noon (Pacific time) and continuing for an entire week, Bobo and I will be making deals and blogging in real-time every step of the way.

That means you can follow along, learning what we’re up to, seeing our hits and misses, and with any luck, watching us snag a monster profit deal along the way.

I’d normally price something like this at $397, and if you’re in any way associated with the office of the AG, you can sign up for exactly that by clicking here.

But, for readers of this blog, I’m knocking it down to just $97. You can sign up by clicking here.

Better yet, if you’ve made a comment or two, (you can enter your own comments at the bottom of any post) as my way of saying “thanks,” your price is $19.97.

And you can sign up by clicking here.

EV is where it’s at

Playing poker at the Rio will just have to wait until next year.

Until then (for this week at least), Bobo and I will be taking dead aim at at our highest and best EV: foreclosure real estate.

That’s where our EV is off the charts.

You’re welcome to follow along, but I’ve got to warn you . . . jungle rules so apply.

Respectfully,

Joe Kaiser