4 Schemes Real Estate Gurus Won't Talk About

TLDR

There are four cutthroat moves I have seen in real estate. Some sit near blurred legal lines, and I am not giving you a playbook for running them. Know the patterns so you can recognize them and protect yourself.

Table of Contents

• Scheme 1: Redemption Hacking
• Scheme 2: Contractor Poaching
• Scheme 3: Deal Lurking
• Scheme 4: The Squeeze
• Why Playing Straight Wins Long-Term
• FAQ

Scheme 1: Redemption Hacking

You can buy a tax-sale house, work on it, and still lose it during a redemption period. The rules depend on the state and the sale. I call the pattern redemption hacking, but I would not treat that label as a legal conclusion.

To understand it, you need to understand a regular foreclosure first.

How Foreclosure Actually Works

In the source’s simplified example, someone buys a $300,000 house with a mortgage. They stop paying. They still owe roughly $200,000, and the house is still worth roughly $300,000.

Banks don’t automatically take houses back. They file a legal foreclosure, which takes months. When that process completes, the house goes to public auction. The bank shows up and bids what’s owed, so $200,000 here. Any other bidder can bid higher.

That’s foreclosure. Now the redemption version.

The Tax Sale Twist

Same $300,000 house, different problem. The owner didn’t pay property taxes. Let’s say they owe $20,000.

The county wants its $20,000. In the example, after the required notices and waiting period, the county auctions the property and someone pays $20,000. The rights a bidder receives and the remaining title process depend on that state’s tax-sale rules.

Sounds like the deal of a lifetime. It may not be. Some tax-sale systems give an owner a redemption period after the sale. Ross used 60 days, one year, and three years in Alabama as examples in the recording. Those are not current deadlines to rely on; verify the exact sale and current state law.

In Ross’s simplified example, the original owner can pay the required tax, interest, and penalties before the period ends and reclaim the property. What the bidder recovers, and what happens to improvements or possession, depends on the governing process.

I’ve seen tens of thousands of dollars go down the toilet after a property was redeemed. The original owner may be able to redeem even one day before the period ends. Do not improve or occupy a tax-sale property based on this example; have a local title professional and attorney explain your rights first.

The Scheme

Most original owners who lose a house for $20,000 in taxes still don’t have the money to redeem it. If no one redeems, the tax-sale buyer may eventually keep the property through the local process.

The cunning investor intervenes. They track down the original owner and say: “Your house is still technically yours. If we pay the $20,000 in taxes and penalties, you can redeem it. I’ll front the money. You just sign it over to me on redemption.”

Brutal. The original owner loses the house anyway, just to a different person. The tax-sale buyer can lose what they put in. Whether the transfer works at all is a state-specific legal question, not something to copy from a video.

Know this exists. Don’t buy tax-sale properties in long-redemption states unless you’re prepared to have the house clawed back.

Scheme 2: Contractor Poaching

Imagine you build a lemonade stand. You designed the booth. You tested the recipe. You squeezed the lemons by hand. Word spreads, people drive from other neighborhoods for your lemonade.

A guy sees the line at your stand and sets up a candy booth right next to you. He didn’t test a recipe. He didn’t build anything. He just watched you build something great and attached himself to your customer flow.

That’s contractor poaching in real estate. Also called the crewjack.

Why Contractors Matter More Than Deals

The biggest line item on any flip is the renovation. The people who do that work are the contractors you spent months or years building relationships with. When another investor starts pulling those contractors onto their projects, they’re riding the pipeline you built.

Top 1% flippers understand that a contractor pipeline is like a sports team’s depth chart. No team plays with one quarterback. You have a starter, a second-string, a third-string. You need that depth because your starter will get hurt, have a life event, flake out, or get poached.

The Fix: Build the Pipeline Like a Sales Team

Treat your contractor roster as a business development pipeline. Four steps:

Pro Tip

The strength of your real estate business is the strength of the relationships you have with your contractors. The weaker those relationships, the more time and management micromanagement eats. Strong pipeline equals light management. That’s the math.

Strong relationships reduce the damage, but they don’t eliminate it. Keep building depth because contractors can still leave, have a life event, go bad, or get poached.

Scheme 3: Deal Lurking

Contractor poaching steals customers from your lemonade stand. Deal lurking waits until you’ve squeezed every lemon, mixed the sugar, poured it over ice, and put it in someone’s hand, then reaches in and takes the cup.

Where Deals Actually Come From

The real money in flipping is not in saving on construction. Construction basically costs what it costs. Trying to cut a $60,000 rehab to $45,000 usually means hiring cheap contractors who cut corners (you’ll pay for it later in fixes and theft) or micromanaging yourself out of an hourly rate you’d never accept.

Construction is defense. Acquisition is offense. The price you pay changes the room you have before the work starts.

So how do experienced flippers consistently buy below market? Four channels:

The Direct-to-Seller Build

Direct-to-seller takes real work. Three pieces:

Simple CRM. A spreadsheet or cheap tool. Without it, you’ll lose leads to follow-up gaps. Sales is negotiation plus follow-up, and without the tracking you only do the negotiation half.

Home base. In the source, this means a basic website, local phone number, and local address that help a seller see who is contacting them.

Outbound marketing. If you have money: postcards. In the source, “we buy houses” mailers run about fifty cents to a dollar each. If you’re cash-poor and hustle-rich: pull a list of homeowners, skip trace their phone numbers, and call. The recording presents calling as work that can surface a few sellers from a much larger list, not a guaranteed conversion rate.

The recording is not a calling-compliance guide. The FTC’s Telemarketing Sales Rule guide covers federal rules generally; federal coverage and state or local requirements depend on the campaign. Have qualified counsel confirm the rules, consent, calling method, and do-not-call obligations before outreach.

The Scheme

You’ve done all the work. You’ve built the list. You’ve made the calls. You’ve earned the seller’s trust and gotten a hot lead. They’re ready to take your offer at $150,000.

The deal lurker shows up, notices you’ve got a seller in hand, and says: “What’s that guy offering you? 150? I’ll do it for 152.”

They can afford to because they didn’t pay $10,000 to find the lead. You did. They’re buying the seller off the back of your marketing spend.

Ross called the move not illegal and said it won’t make you any friends. The point here is to recognize what can happen after you spend the money and effort to create a lead.

Scheme 4: The Squeeze

The squeeze is the one I got hit with personally. Worth a lot less than I should have sold for.

The Anatomy of a Transaction

Every real estate deal has four milestones:

A squeezer stretches every one of those milestones on purpose.

How It Runs

The squeezer finds an MLS property. They offer slightly under asking, low enough to get a deal but not so low the offer gets rejected. You accept. Now they’ve locked the property up.

Then the stalling starts.

Inspection delays. “Couldn’t get an inspector scheduled, can we extend?” You say sure. Then they need extra days to process the report. “They found a lot of unexpected stuff.” Eventually they come back with a small repair credit or price reduction. You’ve already been off-market for weeks. You take it.

Appraisal delays. Paperwork issues, lender scheduling, more reasonable-sounding excuses. The clock keeps running and your holding costs stack while the expected close slips.

The closing gut-punch. The day before closing, they hit. “Our funding fell through at the last minute unless we can close at $270,000 instead of $300,000.”

This happened to me. $300,000 deal, day before closing, $30,000 chop. I knew exactly what was happening and I still took the $270,000. Going back to the market meant relisting, finding another buyer at an uncertain price, and delaying a deal I already had lined up.

I said I probably had contractual recourse if the buyer refused to close at $300,000. I chose not to pursue it because the house would stay tied up while I fought over the $30,000. That was a business choice, not proof that a squeezed seller has no remedy.

Common Mistake

In my deal, a pattern of delays increased my commitment before the last-minute price cut. One delay can be ordinary. Repeated unexplained delays are a reason to review the contract, deadlines, and options with qualified local counsel.

One delay may be ordinary. A pattern of unexplained delays is a reason to get contract advice before your options narrow further.

Why Playing Straight Wins Long-Term

These four schemes exist because people try them. I said in the source that the legal lines can get blurry, especially around the squeeze. None of this is a recommendation to use one.

The people who win over the long haul build relationships, systems, and reputations. A contractor who trusts you because you pay fast is worth more than a contractor you poached from someone else.

Know that these tactics exist so you can spot them coming at you. Then play the game straight. Foundations matter.

FAQ

How do I protect myself from redemption hacking?

Do not rely on a generic deadline from me. Redemption rights, notices, reimbursement, possession, and title rules vary. Before bidding, have a local title professional and attorney explain the actual sale and what you can lose during the redemption period.

Is contractor poaching really common?

Ross said you will run into it. A contractor may get busy, have a life event, become less reliable, or choose another investor’s work. The response is to keep prospecting, nurture the relationships you have, and build enough depth that losing one contractor isn’t fatal.

Why would I build a website and a phone number just for deal marketing?

The source’s home-base lesson is basic: a website, local phone number, and local address help a seller confirm who is contacting them. It does not promise a response or prescribe a story, photo, or number of competing mailers.

How do I know if a buyer is squeezing me or just slow?

You often cannot know from one delay. In my deal, the delays stacked until the price cut came the day before closing. Treat repeated unexplained delays as signals and have local counsel write or review the deadlines, remedies, and actual options in the contract.

I’m new and worried this stuff is over my head. Do I need to learn all four right now?

No. Ross called redemption hacking the advanced tactic that many investors may never encounter. He put contractor poaching much closer to home. Learn the four patterns now, then return to the relevant section when one shows up in your deals.