Explaining “How to Collect Your Government-Backed Real Estate Tax Rebate Checks”

Checking out Ian Wyatt's latest High Yield Wealth teaser

By Travis Johnson, Stock Gumshoe, August 18, 2014

This pitch has been around for more than a year now, but apparently it’s in heavy rotation again so I took another look today.

And yes, you guessed it, the ad is almost completely unchanged from what ran in the Spring of 2013… the same pitch for REIT dividends being “Real Estate Tax Rebates,” the same spiel about the same teaser pick. So we’re re-sharing our article below (if they can’t be bothered to update their ad, well, we’ll take a half-vacation as well).

The updates? Not a lot, actually, the company teased is still a small commercial REIT, it still pays a monthly dividend (yes, the next “ex div” date is today, August 18, so you’ve already missed this month’s payout… but don’t worry, it was only 12.5 cents and the dividend has not changed since 2008 so there will be, in all likelihood, another one coming next month. The stock was around $20 when he teased it, in the midst of the runup of REITs in the Spring of 2013, but like most of those REITs it spiked and then fell back again and has more recently been pretty flat (it’s been between $17-$19 for most of the past year)… what you would expect from a fairly high-yield stock that doesn’t raise its dividend. It has been more stable than most REITs I follow, but is, like all of them, influenced heavily (probably too heavily) by interest rate expectations (I hold several REITs, though not the one teased here by Wyatt, and last wrote about REITs and interest rates in any detail over the Winter for the Irregulars, just FYI).

So we’ve got the same company being teased, a slightly cheaper price, and it’s still very misleading to call the dividends they pay “Tax Rebate Checks” … for more detail, what follows is our original article on this from May 14, 2013. The original comments and discussion are also included at the bottom, feel free to add on if you have thoughts to share:

——–from 5/13/13———

Ian Wyatt is no stranger to the misleading teaser ad — I say this not to pick on him specifically (there are dozens of others with similar-seeming ads), but because his pitches seem to catch the attention of gumshoe readers with their misleading references to “rebate checks” and “savings accounts.”

And this new pitch about “Real Estate Tax Rebate Checks” is no different — it sounds, in fact, quite a bit like his “gas rebate checks” pitch a few months ago. That one followed the same leap of logic we’re looking at here — he said you could earn enough from owning a particularly refinery stock that it would be like getting a rebate on the gas you buy … but judging from the comments these articles generate, and the response from readers, the ads give enough of a misleading big picture to make folks skim right through and just look for where they can input their name and address to start gettin’ those free checks.

I do so hate to burst any bubbles but no, there aren’t really “real estate tax rebate checks”, any more than there were “gas rebate checks.” (Though frankly, since property taxes are typically deductible you kind of do get a rebate on your taxes — though that’s obviously too boring and real to be teased or hyped.) So what is Wyatt talking about with these “checks” you get as a way of offsetting your real estate taxes?

Here’s a bit of the ad to get you all jazzed up before we begin:

“How to Collect Your Real Estate Tax Rebate on May 16th, 2013

“While the rest of the country is getting gouged by federal, state, and local taxes… a handful of everyday Americans are using a little-known rebate program to completely pay off their real estate taxes.

“This program is available to ALL U.S. citizens… regardless of income or employment status…

“Anyone can collect a share of the more than $171 million to be paid out in Real Estate Tax Rebates this year.

“The best part: These refund checks are mandated by the U.S. Government… meaning you’re guaranteed to collect!”

Man, I don’t know who Wyatt’s lawyer is … but I’d be sweating that “guaranteed to collect!” bit. The initial assumption I’m working with here is that he’s touting some sort of tax-advantaged real estate play, most likely a Real Estate Investment Trust (REIT), which means the government does mandate that they send their income to shareholders. But the government sure doesn’t mandate that they make any income, or that they make a certain specific amount of income … and if they don’t make anything they don’t have to send you anything, so be careful how you define “guaranteed” in your head as you read along. Almost all REITs pay out more in dividends than they the government mandates them to pay — it’s the lust of investors for dividends, not the government rules, that keeps payouts increasing for successful REITs.

But moving on … we do want to find out specifically which investment he’s touting for these “rebate checks,” so how about some more clues?

“According to Kiplinger’s… ‘If you’re an investor looking for income, [Real Estate Tax Rebate Checks] are a great way to go.’

“In fact, you could be eligible to start collecting payments of up to $6,175.50 on Thursday, May 16th! ….

“Thanks to the unique nature of this program, you’re eligible to start collecting your rebate right away…

“You see, these rebates don’t pay out annually… they pay out monthly!

“When you enroll today, you’ll start receiving checks every 30 days….”

Still not specific enough … how about some more background to make sure we’re sniffing around the right area?

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