Squatters, Fraud, Finding Fortune, and Reaching Real Estate Freedom with George McCleary

Transcript

[Mattias]
Welcome to the REI Agent, a holistic approach to life through real estate. I’m Mattias, an agent and investor.

[Erica]
And I’m Erica, a licensed therapist.

[Mattias]
Join us as we interview guests that also strive to live bold and fulfilled lives through business and real estate investing.

[Erica]
Tune in every week for interviews with real estate agents and investors.

[Mattias]
Ready to level up?

[Erica]
Let’s do it.

[Mattias]
Welcome back to the REI Agent, this is Mattias. Solo again, I just wanted to talk quickly about how we can provide value to our clients. George McCleary is a guest today.

He made a video, went viral about kind of the squatting scam and what’s happening there. He’s actually got a course that kind of helps protect you or gives you information about what to do with that particular scam. But in the course of doing this and the course of getting into this space, people were kind of sending him all sorts of different ideas or things that happened to them.

And the big one that he came across was something called title fraud. Basically people trying to get access to your equity by falsely transferring title. And he mentioned something, and I just wanted to kind of talk about this a little bit, is just how we can always try to find new ways of providing value to our clients.

A lot of clients here in the past few years have seen a lot of equity growth. And so that’s certainly a concern in this regard. And so educating your clients about this scam is something that could definitely help or be seen as valuable for your clients.

And you could provide them with the service if you wanted to, or provide them with the link to look into it more. There’s probably other ones out there too. You could definitely do a little bit of research.

George was kind enough to give us a discount code if you wanted to share that as well. So definitely something to look into. I think it’s a really interesting service you can provide your clients to provide more value.

Another thing that I had came across once was checking in with your clients that might have sold seven plus years ago and just say, hey, look, I just wanted to call you quickly and say, we’ve seen a ton of growth. We’ve seen a ton of appreciation the past few years. And I know a lot of times people kind of set and forget their insurance policies, but I wanted to make sure that you were covered given that the value of your house has gone up dramatically.

And you could give them more specific statistics. It could be a good opportunity to talk about the value of the house. But just, I think that’s something that they probably have not thought of that you could call them and give them that information and see, so they can go talk to their insurance provider to make sure they’re adequately covered.

So I think when you’re looking to stay in connection with your past clients, looking for opportunities like that is gold because if you provide them with that kind of level of care, they’re gonna wanna come back to you. If you send them a poster about the house you just sold, they probably don’t care as much as if you provide them with some really valuable, applicable to them information. So without further ado, this has been a fun conversation.

If you’re into real estate sales, George is a realtor. If you’re an investor, George is an investor. George has done kind of a lot of different things.

He’s gotten into syndications, development. He’s done flips and buy and hold, all that kind of stuff. Give some good advice if you’re just starting as well.

So it’s an episode you’ll definitely enjoy. It’s a fun one. So without further ado, here’s George McCleary.

Welcome back to the REI Agent. I’m here with George McCleary. George, thanks so much for joining us.

[George McCleary]
Hey, happy to be here, man.

[Mattias]
Yeah, hey, we had a pretty good conversation leading into this conversation, so I’m excited, really excited for this one. There’s a lot of stuff we can cover here, but let’s start with how you kind of got into real estate investing.

[George McCleary]
Yeah, totally. So I’m a 21-year veteran of the real estate industry, which feels crazy to say, and time has really flown. But basically, I bought a duplex, got my license my first year, went gung-ho, bought another triplex and a fourplex.

Had a bit of a downturn during the downturn era of 2009 to 2012, but then got back in the game, continued to acquire properties, that is. And these days, I’m a multifamily investor, developer, syndicate deals, and right now, I’m working on my first industrial flex development. But yeah, flipping, new construction, I’ve worn all the hats in the residential real estate industry.

[Mattias]
You are perfect for the show. This is awesome.

[George McCleary]
So how much have you done with your real estate license? So it’s really come in fits and starts. When I first got my license, I was gung-ho, let’s get as many commissions as possible.

And I got zero, because I was all by myself. So then I joined a team, which is something I always advise people to do. Get on a team, learn the ropes, get some clients, get some face time, and then I actually started getting some transactions going.

But concurrently with this, I was investing on my own. And that was a really key part of this, because I recognized that commissions were a really great way to keep the lights on at my house and everything, but down the road, what I really wanted to be was an investor and a developer. I still was loving the commissions, though.

But then, once that all dried up in the downturn of 2008 and nine, suddenly I’m like, okay, I gotta figure out a way to make this work. And so I started selling foreclosures on the buy side. And my boss was representing them.

I was working for a company that was representing the banks. And so he would list, and we would take all the sign calls and try and get these people into these old rickety shacks that were all run down and filled with squatters. And man, it was really tough.

But I’ve never stopped being an agent and really considering myself, I guess you could say identifying as an agent. When the phone rings, I normally refer most of my business out. I’m not taking people out to find a house to buy or anything like that.

But if someone says, hey, list my house, and I know the house, I know the neighborhood, I’m like, okay, yeah, let’s do this. I can do that. But for the most part, the hat I wear, at this point, I don’t wanna say graduated to being an investor, because it’s just a different vocation.

But I feel like that’s kind of where I’ve landed is 90% of my time as an investor developer.

[Mattias]
Yeah, cool. I mean, one of the beauties of it is that you have the choice, right? I mean, you can, it sounds like you don’t need your commissions to live.

[George McCleary]
Yeah, no, I don’t need my commissions to live. But it is a much faster nickel versus the slow dime that is development. Like I’m working on a development deal now where I’ve been working on it for like a few years, and I’ve taken exactly zero money from it.

And it’s been a ton of work. And eventually, when it pays out, it should pay out really well. Or you know how these things go.

Sometimes they don’t work out well. So it’s the fast nickel of a real estate transaction is really good to have in your back pocket if you’re an investor. So that’s why I love the investor-agent combo.

[Mattias]
Yeah, I mean, shoot, you can really, yeah, build that long term. Cause I mean, especially right now with interest rates, you’re just not gonna have a grand slam cash flowing property usually.

[George McCleary]
Yeah, yeah, yeah, unless you bought it 10 years ago.

[Mattias]
Yeah, but yeah, but to that point, in 10 years, that probably will be a great opportunity for you to have a great, you know, the appreciation, the debt pay down, the cash flow, and all the tax benefits. So I mean, there’s, yeah, I think you’re exactly right. I think it’s like you can make a living if you’re more of an agent, you can make a living, a great living, commissions, and then you can just kind of build up.

I like to look at it like kind of replacing things. Like, you know, let’s replace my mortgage with cash flow. Let’s replace my insurance, cause we know how expensive that is as somebody that’s unemployed.

[George McCleary]
Oh yeah, yeah, no, that’s a great way of looking at it. I just, you know, you add up all your expenses and you chip away at it. That’s actually the whole point of the cash flow for kids board game.

So if you got kids out there, go and pick up that board game. It’s a great way to kind of teach them about how to do that exact thing. You know, you got your expenses and then you get your passive income.

So one thing about being a real estate agent is a lot of times your income stream basically just dries up overnight if you don’t work. And so you can have a team, you can have a system, and that can do a lot for sure. But there’s usually a guy, you, that’s running the show, right?

Right.

[Mattias]
Yeah, 100%. And that’s one of the ways that you can balance it out. Like, you know, there’s definitely the seasonality, market swings.

You know, you might have commission split resets. You might have, you know, taxes. All that stuff could be hitting you at the same time.

And so yeah, balancing out your cash flow stream, right, is just super helpful and a super big benefit. And I think that you can also use that idea of kind of replacing your liabilities with passive income, or you’re offsetting it, as a way to also kind of keep your income lower, or sorry, your lifestyle lower to start. And then you get that passive income built up more and your sales business built up more, then you can start more smartly, you know, moving up in the world a little bit.

[George McCleary]
Exactly, yeah, the upward mobility. And you mentioned taxes a moment ago. That’s one thing I really like to talk about with agent investors is the fact that when you pile on commissions, you’re essentially just piling on taxes.

Your deductions are, you know, you’re gonna have deductions. You’re paying Zillow for ads. You know, you’re paying an assistant and whatnot.

But really, the best deduction that you can get as a real estate investor is you have rep status with the IRS, you’re a real estate professional. And so the deductions, you can take deductions on depreciation. And so, especially these days when you’ve got accelerated depreciation, it’s not quite what it used to be, but it’s still a really big deduction.

And as long as you’re careful, because depreciation recapture can be a real bitch, but if you can get that deduction in particular, that can really knock back your income. Because if you’re gross and several hundred thousand in commission, like a lot of you guys out in the listener land are, you gotta knock back that income or you’re just gonna get murdered by the tax man.

[Mattias]
Yeah, yeah. So that’s a lot maybe people don’t understand. But basically, the accelerated depreciation looks like instead of taking that 27 years of the actual infrastructure, or sorry, dividing the value of the structure, not the land, by 27 and deducting that from your taxes, you’re actually looking at kind of everything, all the pieces of the house.

[George McCleary]
Like all the carpet, like all the little nails in the hardwood floor. All the stuff that you can make a case that like, hey, this paint on the wall is gonna depreciate over the next three years. I get to- So each of them have a different life span, basically, right?

Exactly. So you could probably take a depreciation expense of like 50 grand. And there’s a whole bunch of ways to do this.

You can pay people a ton of money to do it. There’s an automated way. This is the subject of debate.

And if there’s a CPA on here, he’ll probably say something like, pay the extra money, pay the professional, but like, there’s automated ways to do it, and for like a few hundred bucks. And I’m not gonna say which ways that I’ve done it, but I’ve done it both the easy way and the hard way, and it lived to tell the tale. And at the end of the day, taking that deduction is definitely worth it.

[Mattias]
So do you think that people should apply this kind of strategy to like even single family houses, or do you think that’s really? Okay, so when you get into the syndication space, when you get into, let’s say George is getting an apartment complex, and he’s increasing the value, et cetera, there’s a whole strategy with that, syndicating the deal. An agent, a person could invest with you as a limited partner, and then they basically are an owner without having to do with anything with the operations.

They don’t have to worry about fixing up. They don’t have to worry about the tenants. It’s George running this as a general partner.

They can get a K1 at the end of the year that would factor in the accelerated depreciation, and in those kind of scenarios, often I think when it’s a bigger project like that, it, you know, you can get probably, spend a decent amount of money and get the experts to kind of come through and really itemize everything and make sure you’re maximizing that value. Do you think it makes sense for a single family as well? I mean, have you done that?

[George McCleary]
Yeah, I have, and this is, it gets a little controversial because some people say like, hey, like, don’t bother because it’s going to cost you, you know, it’s gonna cost you X amount, and you’re only gonna realize this benefit, and my reaction to that is like, all right, well, how much is it going to cost you, and what are you going to benefit from it? So I did it recently, or I guess it was like last year, my taxes with a single family home that was worth somewhere on the order of like, I don’t know, like 390 grand or something like that, and I had deducted somewhere on the order of about like, I can’t remember, it was like 45 grand. It wasn’t like a huge deduction, but like, it was a big enough deduction to where my cost to get that cost segregation study, so that’s basically what you do.

For those of you wanting to put this together, what you’re looking for is a cost segregation study. So then the cost seg study on that costs, I honestly can’t even remember. It was a few hundred bucks to 500 bucks or something like that.

It wasn’t that much, but the deduction that I received gave me a benefit well, well in excess of what it cost me to do it. So then, is it worthwhile to do it? That’s part of the calculus.

The other part of the calculus is like, hey, are you going to get hit with depreciation recapture? And again, I’m not a CPA, I can’t give tax advice, but yeah, you’re probably better off doing a 1031 on your investment properties and just keep rolling them over until you expire, right? So, and as long as you’re pretty confident that you’re not gonna need to cash out this money anytime soon and pay that depreciation recapture, then yes, I think it absolutely is worth it.

If it’s a house that costs you like 60 grand or something like that, then maybe that doesn’t really apply. But in this case, in the Portland area where things tend to be a little more expensive, then yeah, it absolutely did make sense to do it for a single family home.

[Mattias]
There you go. To give some real world numbers, and this is probably a bit of an extreme example, so I wouldn’t count on this. I was in a syndication, I invested in a syndication, I invested $50,000 into a mobile home park.

I think those are kind of rich when it comes to depreciation, accelerated depreciation opportunities. We were able to write off $66,000 off of our taxes. There you go.

If you look at that, this property has also been returning 10, 11% on that money. What an awesome, awesome opportunity. And I think, again, talking to the syndicator too, that’s not something that you can always get.

This was kind of a lucky, rare one. But you get the concept here, and if you want some real numbers to maybe, if you’re crossing your eyes and not what we were talking about for the past couple minutes, maybe that will be incentive to go back and listen to it again, and try to understand this stuff a little bit more, because that’s a huge write off on what is already a great investment, and I don’t do anything with it. I am trusting the general partners and their plan.

It’s good to check in with them and make sure that things are still on track, all that kind of stuff, but at the end of the day, I do not actually feel like I own a mobile home park, or three, technically. I’m not getting calls about all the things that happen at mobile home parks, right?

[George McCleary]
Syndications are awesome, no matter how involved you are in the real estate industry. I’m really glad to hear that you’re involved in those mobile home parks, because that’s something that I’ve really wanted to do, but even though I’ve been investing in real estate for this long, I’ve never actually held a mobile home park investment, and I’m pretty sure I could figure it out, but I think I’m probably better suited to staying in my lane and doing the things that I really know how to do, especially because I syndicate deals for that very reason, because I’m the expert in that space, but when it comes to mobile home parks, that’s not really my thing, and so I really don’t mind paying that guy what he’s worth to manage that investment. Sounds like you’re in the same boat there.

[Mattias]
Yeah, 100%, and what a great way to diversify, right? If you wanna have exposure to something like that, but you don’t wanna have anything to do with it.

[George McCleary]
Yeah, exactly, especially with all the office stuff that’s going on right now. Everybody knows that office has been in the toilet for a good long while, but as with all these things, it’s all a market cycle, and everything is going to come back, at least in some way, and there’s buildings trading for pennies on the dollar, especially in places like Portland, where a lot of the office values have been really depressed. They’re not gonna sit there gathering dust for long.

They are gonna go up, but I’m not an office guy. I’ve never owned an office park before, or office building. I’ve worked in an office and paid rent, but that’s it, and so even though it’s very adjacent to what I do and what I think you do as well, it’s not within the narrow scope of range of my expertise in particular, and so in that case, it really makes sense to pay an expert, and you’re only gonna earn less than he does if the investment does really well.

That’s generally how those things work.

[Mattias]
Yeah, I mean, it’s a really good point, and a really good reason why I feel like syndications can be a really good thing for agents in general. If you’re so busy, you’re killing it as a sales agent, and you’re worried about your retirement. I mean, we all have, in the agent world, have seen people that, you’re wondering why they’re still working, right?

Like, did you not plan well? Do you just love it so much? What’s the reasoning?

And I think there is, to a certain extent, the art of loving it so much that you just don’t really know what you’re gonna do with yourself if you give it up.

[George McCleary]
Those people are all lying. They just didn’t wanna plan, and they’re not admitting it.

[Mattias]
Yeah, I don’t know. I mean, at this stage of my life, I feel like I don’t know what I would do with myself if I was retired, but anyway. Yeah, I mean, that’s just a great opportunity that where you can just focus on what you’re good at, where you’re gonna really bring top dollar.

Instead of taking yourself out of your sales game and trying to learn something new, trying to figure out buying rental properties, et cetera, you can really get a network of people that you think are brilliant and trust well. That’s the thing you have to really learn how to do in this is just learn to trust or vet general operators, general partners, and also just kind of an overview of the deal itself and learn how to do that, which is a bit of a learning curve. I’m not gonna lie.

This stuff is pretty complicated.

[George McCleary]
But our listeners, or your listeners, rather, they’re gonna be much more attuned to exactly how to look at this investment just because they’ve been around real estate and they generally know how things work. And so even though they might not understand the intricacies of how a waterfall structure works or something with the payouts, you don’t need to understand all of that perfectly. You can shove the agreement into chat GPT and have it explain that to you.

But what you can understand is like, okay, we got an asset. It’s going to rent for this much and it’s going to be in this area. Real estate agents could be able to look up and be like, huh, okay, looks like you’re close to a freeway.

Looks like you’re right across the street from an elementary school. A lot of historic homes around there. I wonder how this is gonna be received and fit in.

So you can look at it as a real estate agent. And a lot of times I ask my agent friends with projects that I’ll syndicate and be like, yo, man, what do you make of this? From an agent perspective, because agency, you’re the people that people go to, whether it’s a rental or a new law or something that I got involved with, like this whole title fraud thing.

You’re just the resource for all of your clients and you’re the people that they’re gonna call. And so that’s why I value their opinion so much.

[Mattias]
That’s a really good point. And I think you can get lost in the weeds and feel like you can’t do this because you don’t fully understand all the legalese in an agreement and all the jargon and all that kind of stuff that is in there. When if you just really boil it down to the core basics of real estate, it’s not that complicated.

Often, if you’re looking at a value-add apartment deal, it’s really just a flip or a burr deal at a much higher level. And with that comes a lot greater rewards typically. So it’s just really cool how it becomes such a win-win for everybody involved.

The general partners should win on this. They’re doing a ton of work. And the limited partners are bringing capital and they get rewarded well too for it.

[George McCleary]
Yeah, great time for me to plug my syndication deal at mcclearyrealty.com. I like it. Yeah, no, I don’t do a ton of these things, but I’m building some apartments and then I don’t think I’m gonna syndicate the warehouse development.

But yeah, no, it makes the world go around. All the buildings that you see going up, there’s a good chance that it’s a group of investors and a general partner that are building this thing.

[Mattias]
Yeah, it’s awesome. Well, you touched on this fraud thing, so let’s get into it. I’ll let you explain what this is all about.

[George McCleary]
So it’s part of kind of a greater story of something that happened to me about this time last year. Basically, I uploaded a video to social media called I Stole a House. It was all about squatting in Portland and how people are pulling it off.

And it’s really exploded and completely changed my whole life. I ended up getting on the news. They flew me to Texas to be on Dr. Phil, I got on a ton of podcasts over the whole thing. And it really touched a nerve because most people have never had a squatting experience, but they’ve heard about it and they know just how horrific it can be, especially if you’re in a place where it’s really difficult to remove the tenants. So what ended up happening is everybody I’ve ever met was emailing me and calling me saying like, oh, hey, I saw you on the news, I saw your video. And I think on Twitter it got something like, it was tens of millions of views between all these different accounts that started reposting it.

And then people started reaching out to me saying like, oh, hey, I’ve had a squatter. Oh, hey, I got swindled in this way in real estate. And I started getting to be like a lightning rod for all these problems and scams that were going on in real estate.

And most of them I’d heard of before, like scamming contractors, squatters, things like that. But then one really stuck out and it was title fraud. And that’s essentially where you file a fraudulent deed.

You fake a deed. It’s just a piece of paper with a rubber stamp on it. But you take it to the recorder’s office and it transfers title.

There’s no verification process or anything. And so people will impersonate people and then they’ll also transfer the deed into the name of an identity that they’ve stolen. Because at that point, they can sell the house and take all of the equity and just have it wired to their bank account.

Either the one that they set up for the person they’re impersonating or the fake ID that they got off the dark web that has like the social and everything. So that one struck me as being particularly insidious because you’re stealing the main value of real estate and that is home equity. It’s how much money you got in it.

If your house is worth a half million bucks and you owe $100,000 on it, there’s $400,000 in there. And if somebody’s able to just up and steal it, I was really struck by just the ease of the crime and just how terrible it would be if that happened. So I started talking to some of these people that had been deed frauded and they’re like, well, man, it was really bad because it wasn’t covered by insurance.

I had this huge legal fight. And I’m like, whoa, whoa, slow down. You mean to tell me that title insurance doesn’t cover this?

And they’re like, yeah, man, no, it doesn’t cover it. It’s only with an enhanced policy or this homeowner’s policy and we just have the ALTA owner’s policy. So I took a look at some of my closing docs and sure enough, yeah, it just says ALTA owner’s policy and that doesn’t cover it.

And that’s what most people have, unfortunately. So basically what I did, I was like, all right, well, how can we prevent this? What can I do about this?

And I set up a service called Title Fraud Defender, which makes it so that if anybody ever transfers your deed or starts tampering with it in any way, you just get notified. There’s no notification system that’s inherent to every county in the country. Some of them have it built in, but you gotta opt in.

It’s got this whole rigmarole with it. But this one, with my service, with Title Fraud Defender, you put your name, your property, and then how to notify you and if anybody tampers with your title, we let you know about it. We didn’t invent this, but the other guys charge like 20 bucks a month for this and I’m doing it for between like $2 and like $6 per month.

So a whole lot less expensive. And so this way, if anybody does do it, you can undo it lickety split. But if you don’t know about the title transfer, then like, dude, you’re in a world of hurt.

Oh my gosh, that’s crazy.

[Mattias]
Yeah, that’s wild. I haven’t thought through what that would look like. I know I’ve heard of people doing…

Yeah, I mean, I think I’ve heard about things like that with land, I think, in particular. For some reason, maybe it’s easier to go and detect it or something.

[George McCleary]
Yeah, it’s because there’s no house that somebody can go visit and say like, oh, this is mine or this is yours. Land is just sitting there. And so particularly in places like Florida and California where there’s a lot of land, there’s a lot of land for sale, and a lot of it is expensive.

And so there’s a lot of Florida subdivisions, a lot of places in California where there’s a lot of land. And what they do is they can do it from afar. They can file the deeds from afar, transfer ownership, and then another thing they do in addition to just reselling them to a wholesaler or an end buyer is they’ll take out loans against it.

So they’ll hit up a hard money lender and say like, all right, I got this parcel. It’s worth like 200 grand. How much will you lend me on?

And the lender’s like, all right, yeah, I got you, like 100 grand without having to have like a thorough investigation of exactly what’s gonna happen here because hard money lenders, they dole out those loans relatively quickly and their due diligence process, especially if it’s just a private party, is not super robust. And so that only happens after title is transferred, it’s cleared and recorded with the county, the fraudster sees it, and then they start setting their plan in motion. This takes like a few weeks, like several weeks a lot of times.

Whereas if you know about it right away, like you can fix it. Yeah, that makes sense. Wow, yeah, that’s crazy.

It’s pretty wild, man. And like the stories that I’ve heard of people like losing hundreds of thousands or if not millions of dollars, it’s like, okay, what do you do to keep that from happening? Okay, you do this thing that only costs like a few bucks a month.

Like, okay, that’s a lot better. In fact, it happened to David Green of BiggerPocketsPain. I heard that, yeah.

Yeah, yeah, so it’s a pretty well-known story, but he got like in a world of hurt. It happened to like 50 of his properties. And so, yeah, ask him about it sometime and yeah, he’ll tell you the same.

It’s no fun at all.

[Mattias]
Yeah, that’s wild, wow. Yeah, thanks so much for shedding light on that. That’s definitely an important thing and hopefully also there will be some more protections about that kind of thing happening at like the courthouses and stuff, like to some sort of verification, yeah.

[George McCleary]
You would think, but for the most part, there’s just, there’s nothing. And because all the counties in the country, they’re all their own separate thing. They’re all governing themselves completely differently.

They have the same system, which is, here’s a deed, here’s a notary stamp, let’s record this thing. But there’s no like uniform like code or a procedure when it comes to this stuff. And so you could change it like in one county, but it wouldn’t mean that you had to change it for all the other ones.

And some ideas have kind of come and gone about putting things on the blockchain and whatnot, but nothing has really stuck. I hope the deeds are quite ready for the blockchain. Yeah, because I mean, some counties have like, several million people in them.

Other counties have hardly any. And so some counties have got a recording office with dozens of staff people or more. And then in other places, it’s like, Dolores, who’s been there for 20 years, and she does the deeds, and you can just walk right in her office or something.

[Mattias]
Yeah, like not everywhere you can access deed records online even. It’s not necessarily a super tech savvy space.

[George McCleary]
It’s not, it’s not. And so that was basically how I came up with that solution. And the messaging that I give to real estate agents when it comes to this is, again, once again, like what we were talking about before, like you are the resource.

You are the person that your clients are gonna ask, are gonna ask when it comes to like, what’s this new law? What’s this new threat? And I always say, get versed on what deed fraud is so when the day comes when your client asks you about it, you know what they’re talking about.

And if you don’t have anybody asking you about it right now, they might be wondering about it, or especially if they’re elderly or at risk, if they have a paid off property that puts them at additional risk, reach out to them, because we’re all looking for reasons to reach out to our sphere and start a conversation and demonstrate value. Show them that this is a thing, and it’s pretty easy to protect yourself if you feel like it, but here’s what can happen. And I think there’s something like $31 trillion of home equity within the United States, which makes it like far and away the biggest single source of wealth, like more than like what’s in people’s bank accounts or what their cars are worth or whatever.

It’s home equity. And properties have gone up a lot in the past several years, and it’s higher than it ever has been before. And there’s a famous bank robber who said, why do I rob banks?

That’s where the money is, right? And so that’s changed. The money is still in the banks, but it’s also in home equity.

And if you can steal it, then people are gonna do it. Yeah, that’s very true.

[Mattias]
I’m curious about the angle with the, I stole this house, the original thing that you got. So were you just talking about squatting in general or tell me more about that.

[George McCleary]
So I started off the video, and this is probably why I got banned from Tech Talk. It said, this is how I stole a house in Portland, Oregon and got away with it. So I impersonated the squatter and basically did a play-by-play of what the squatters are doing, which is they find a vacant house, they get in there, and they basically establish themselves with roommates and furniture and putting the utilities in their name.

And then a lot of times they’ll forge a lease. They’ll take a lease, print it off the internet and just fill it out. So then by the time the owner gets there, which is, if they’ve had time to get established, wave to the neighbors, get a moving truck, hang out there for a while, their dogs are tied up in the yard or whatever, they actually have some credibility when law enforcement shows up.

So if the owner shows up and says like, hey, what the heck are you doing here? They can say, well, as you can see, officer, I’ve got this lease and the utilities are in my name, so I don’t know who this guy is. And then so suddenly the officer has kind of got like a judgment call to make.

He’s like, okay, who’s telling the truth, who’s lying? And most law enforcement officers are not gonna stick their neck out to remove somebody who may have a lawful claim to the property, just tearing them out of the house and then arresting them because if they’re wrong, then they could get in big trouble. So they say like, okay, this is a civil matter.

I don’t know who’s supposed to be occupying this house, but you guys need to go fight it out in court. And especially in more liberal jurisdictions, it can be really, really difficult to evict somebody. And essentially at that point, you’re evicting them as a tenant, which is completely bizarre because they’re not really a tenant, but essentially you’ve, by taking them to court like that, you’ve given them the bundle of rights that a tenant has.

And so that was the video was essentially like, was explaining like the scam. And so a lot of people didn’t get it. They’re like, okay, let’s hunt this guy down.

And then other people say like, yo, go to his profile. He’s a real estate investor. And then other people said like, well, yeah, well, like we should go after real estate investors.

So we should get him for that reason. And so it really, I think that’s one reason why it ended up getting so much engagement is because everybody’s fighting in the comments. We got people on the left, we got people on the right and they’re all going at it with each other.

And so I think that’s what kind of what drove the engagement. That’s funny.

[Mattias]
You know, like, let’s put politics aside. Like if somebody’s living in a house for free, that’s pretty much something we can all agree on, right? Come on.

Yeah, I mean, that’s crazy. That’s it is wild. I mean, we have some plans and goals of living overseas for a year and I was talking with a couple that were living in Portugal and we were looking at Spain and they’re like, don’t do Spain.

And it was essentially the same reason. Yeah, it’s essentially the same reason. Yeah, I mean, like if so, if you were to buy property there and then wanna travel at all and there’s a really hard to remove from squatters in Spain apparently.

Really? Oh, wow. Okay, today I learned.

That’s good to know. I know, right? I know.

And I don’t really know if we’d be thinking about buying, but it’s certainly something in the back of my mind now. So yeah, apparently Portugal’s better.

[George McCleary]
Oh, wow, that is good to know. I mean, yeah, maybe you get yourself like a house sitter or something, something to.

[Mattias]
I actually think they said that people will. Yeah, they’ll pay people to stay in their house when they leave for that reason.

[George McCleary]
That’s one thing you can do. So another thing that spurred from this whole experience was I created an online course all devoted to squatter prevention, detection and ejection. So Title Fraud Defender, that’s the one where you’d protect against deed fraud, but Squatter Defender, it’s basically, it’s an online course, several hours long, about everything you can do to prevent squatters and then if you do have them, what you can do about them.

And I don’t wanna spoil it, but it’s the unconventional methods are the ones that have gotten the most attention in airtime and the short answer is like, yeah, you don’t always call the cops. Okay. I actually made it sound much more sinister.

It’s not going in there and shooting them. It’s just getting a little clever. In fact, we advise against like.

[Mattias]
Shooting people?

[George McCleary]
Yes, there’s a lot of people in the comments from those videos that were like, yeah, you should just shoot the guy.

[Mattias]
It’s your property.

[George McCleary]
It’s your property, so you should just go light him up. And I’m like, all right. The reality is, so like I said, when people were contacting me with all their squatter stories, I also got sent a lot of articles and there’s a lot of instances where either the homeowner or the squatter were unalived by a conflict between the two of them.

Oh my gosh. So if the squatter bites the dust, like yeah, everybody’s gonna be like, oh yeah, well, they got what they deserved or whatever, but there’s a lot of those where like the homeowner was murdered and it’s not what you want. We’re here to make money investing in real estate.

We’re not here to be GI Joe. There’s people for this. And it maybe isn’t the police, but if you look up Flash Shelton, he basically came up with probably the best method of getting rid of squatters, which is squatting on the squatter, where you or a friend or somebody that you hire, which I really recommend hiring somebody like a professional contractor who specializes in this, moves in with the squatter and is just a really bad roommate.

And then it’s a whole lot easier, man, to move in somebody into your property than it is to kick someone out. So you move them in.

[Mattias]
Oh my gosh, this is insane.

[George McCleary]
They live together and play house and a lot of times the guy that you hire is a really, really bad roommate. Let’s just, we can leave it at that.

[Mattias]
That’s funny, George. I actually, one time I went to, there’s a promotion at a local ski resort that the first like 10 people in line or something got a free season pass. And I went the day before and got in line.

There was already a line and they made a raffle basically to see who would be in the spot, but they had to stay there all night. And so there’s people that were just like on the cusp of getting in and I swear they were just trying to annoy the crap out of people so they would just get up and leave. Sounds like that’s a tactic.

[George McCleary]
That is the tactic, man, because people just want the path of least resistance. They want the person that’s gonna walk up and be like, oh my God, squatters. And like, you know, you’re gonna be hearing for my attorney and then just like walk away because the squatter is thinking to himself, okay, perfect, great.

Like I might have to show up to court and start making some stuff up in like a few weeks, but then there’s taxpayer funded advocacy groups that will like get you a free attorney, delay the court date, delay it again, try and get extended on a technicality. So like, yeah, so they’re styling. But if you’ve got a guy who’s willing to kind of go the extra mile, not full blown take the law into his own hands, but really like, you know, handle the problem personally.

And that’s when they know like, okay, I’m not really on easy street here. And then they’re gonna try it someplace else or maybe just give it up. Oh, that’s awesome.

Yeah, man.

[Mattias]
This has been a wild journey, this conversation so far.

[George McCleary]
I know, yeah. No, we used to talk about real estate investment and then suddenly something crazy happens to you, which really kind of personifies like what happened to me last year. I was just chugging along being a real estate investor that went viral and then made this thing.

It’s, you know, it’s storytelling, you know, sometimes things happen and your life gets turned upside down. Yeah, that’s amazing.

[Mattias]
George, if you had any golden nuggets you thought you could give to people, you know, either beginners in the real estate investing space, et cetera, do you have anything that comes to mind?

[George McCleary]
I’d say if I had to give any advice to like a newbie real estate investor, because I get this a lot, is how do I get started in real estate investing? I don’t have a whole lot of capital, don’t have a whole lot of this or that. I always just say figure out a way to house hack.

You know, get an FHA loan, buy some place where you can afford it, where you’ve got more than one bedroom, ideally like three or four, and house hack. There’s always a place that you can afford somewhere, especially if you’re an agent. You can figure it out, and that is the way to get started.

That’s what I did, that’s what a ton of my colleagues did, and if you can figure out a way to make it like a value add, if it’s like a, if you can add an ADU, if there’s a way that you can get your hands dirty, that’s what I did. I was doing drywall and cabinets and doing all this stuff as a 23-year-old kid, and I didn’t know what the heck I was doing. I was scared out of my mind.

And I had to kick tenants out. But it was really, it was a real, it was very humbling. But you gotta start somewhere, and you might get kicked in the teeth, you might get punched in the face, but you’re gonna learn from it.

But the nugget is do a house hack and just do it, even if it means not living exactly where you wanna live and living with who you wanna live. I had some wacko Craigslist roommates at my first property, and I don’t know what they’re doing these days, but if it’s still doing cocaine on my coffee table while I was trying to get some work done at midnight, then I still wish them the best. But it was a rough start.

But I got it done, and it worked out great.

[Mattias]
Yeah, and honestly, it can be a lot of different things. I had a friend, he may not even still know what house hacking is, but he’s still doing it, the term, that is. His parents had him, as soon as he started working, they were matching or something, and in a Roth IRA, they’re just maxing it out every single year.

So he graduates college, and he might have had a job for a little bit, then he went into grad school, et cetera, but they were like, hey, it’s a good time to buy. This was maybe 2013 or so. This is a good time to buy.

You should probably just buy a house. And so he was able to with that Roth IRA money, and he had his, back then again, it was a pretty good mortgage, but yeah, he had his rooms rented out constantly, so he basically never paid his mortgage in 12 years. And he still owns it, he bought another house just recently, and now it’s just a full-on rental.

And he might have had to split the utilities a little bit, but it was such an awesome, awesome situation. And there might have been one weird person that lived in there in that whole time. There’s always one, but give it enough time.

For the most part, it was like friends that he had, and it wasn’t that bad. He could have probably moved on sooner and just kept that as a rental sooner, but it just worked well for him. So yeah, he was happy with it.

[George McCleary]
I like, I love it, man. Yeah, I’ve heard that story, stories like that many times, and it’s usually with people that have ended up being very successful.

[Mattias]
Yeah, yeah, that’s awesome.

[George McCleary]
Do you have a favorite book you’d recommend? You know, I’ve got one, and it’s a little bit less conventional, but I’m gonna hit you with it anyway. And it’s not just for men, but the book is called The Way of the Superior Man.

And it’s all about sort of embracing and harnessing your masculinity and your purpose in life to just live the best life that you can. And a lot of times, masculinity gets conflated with toxic masculinity. They’re two very, very different things.

But I think, especially if you’re a guy and you’re kind of seeking your purpose, and professionally, personally, kind of finding your center and kind of what it all means to be a man and to protect, provide, and do the stuff that we’re supposed to do as men, the things that we feel innately inside of ourselves. We want to go out and conquer the world and accomplish and help our communities, help ourselves. This book kind of helped us kind of serve as a compass.

Like, what does it all mean? What does it mean to be a man? How can I be the best that I can be?

So give it a read. The Way of the Superior Man.

[Mattias]
Yeah, it’s interesting because I think it could be especially confusing right now where if you’re a white man in a liberal area especially, I think that it can be a little bit like, am I supposed to not be okay with myself?

[George McCleary]
Yeah, yeah.

[Mattias]
Again, not to get too political, but I think there’s a good balance there to be had where you can really dive into and explore being the best person you can be, right?

[George McCleary]
Exactly, and it’s not just for men, I think that’s, or for straight men for that matter. It’s the dichotomy between the masculine and the feminine is something that really drives us as people. It’s in our biology.

No matter whether you’re gay, straight, what race you are, there’s a lot to be learned from how we can be driven and how our lives are conducted as masculine and feminine forces. And so that’s why I invite everybody to give it a read because it’s got some good takes in there.

[Mattias]
Awesome, yeah. So are there any places that people could reach out to you or follow you for more? You’ve mentioned a couple of websites for the deed defender, or say that one more.

[George McCleary]
Yeah, so titlefrauddefender.com, that’s where you can get deed protection in there. And I’m actually gonna give you guys a discount code so your listeners can enter the promo code REIPODCAST and you guys can get 20% off any subscription. And that same thing goes with Squatter Defender.

That’s squatterdefender.com. So if you go to either one of those websites, enter in that promo code REIPODCAST, and yeah, that’ll get you 20% off. And then I’m super easy to find.

If you Google my name, George McCleary or McCleary Realty, you’ll find my Instagram, TikTok, Facebook. Contact me on all the platforms. Not always great about checking my messages, but I do my best.

So send me a friend request and I’d love to hear from you.

[Mattias]
Awesome. Well, George, this has been a great conversation. It’s been a wild one.

[George McCleary]
Yeah, man, yeah, it always is.

[Mattias]
So much fun though, so thanks so much. I love, we’ve covered so many great things for people to take home, take with them. So I really appreciate that.

Awesome, man, great to be here. Thanks again.

[Erica]
Thanks for listening to the REI Agent.

[Mattias]
If you enjoyed this episode, hit subscribe to catch new shows every week.

[Erica]
Visit REIAgent.com for more content.

[Mattias]
Until next time, keep building the life you want.

[Erica]
All content in this show is not investment advice or mental health therapy. It is intended for entertainment purposes only.