Run to the Bank Notary Close Title Insurance Afterward (LA 1063)
Steven Butala’: Steve and Jill here.
Jill DeWit: Happy Friday.
Steven Butala’: Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit: And I am Jill DeWit, broadcasting from gorgeous, sunny southern California.
Steven Butala’: Today, Jill and I talk about a run to the bank, notary close, and then going to get title insurance afterward, after the property’s in your name.
Jill DeWit: This sounds so weird, but you can do this.
Steven Butala’: And it’s not-
Jill DeWit: It’s okay.
Steven Butala’: Yeah, it’s not complicated.
Jill DeWit: Right.
Steven Butala’: It’s just a step-by-step process, and it accomplishes one of the most important things in a real estate transaction that you could ever hope for, which is speed.
Jill DeWit: Yup. Also, just getting it done.
Steven Butala’: Time kills deals.
Jill DeWit: Yes, it does. Sometimes you have to be scrappy.
Steven Butala’: Especially with certain personality types. Certain personality types, meaning sellers, really need to get things done quickly. They need money and there’s a lot of different reasons, but it’s a such a good property. It needs title insurance.
Jill DeWit: Right.
Steven Butala’: This is a little product that Jill and I together devised. I’m not afraid to say it over a pretty nice bottle of wine.
Jill DeWit: Thanks.
Steven Butala’: Before we get into it. Let’s take a question posted by one of our members on the landinvestors.com online community. It’s free.
Jill DeWit: About that bottle of wine, by the way, just pause, I’m not so into wine anymore. But you know what? I’m developing a good taste for this tequila.
Steven Butala’: Oh my gosh, Jill.
Jill DeWit: I’m not kidding. I never-
Steven Butala’: You’re my dream girl.
Jill DeWit: Oh really? But I’ve been learning. We have a new neighbor who has a strong affection for good tequila. And I thought all tequila was bad, because we all have bad experiences and bad hangovers and bad party situations and doing stupid shots of tequila. Well, I didn’t know until recently you don’t have to drink all tequila that way. I didn’t know you could put a nice ice in a nice glass, pour tequila in there and just enjoy it and sip it.
Steven Butala’: Yeah.
Jill DeWit: And I like the caramel-y ones. I’m here to tell you I’m not a smokey tequila one. I’m learning that too. How funny and why I love that. This is my version of being … I can’t be a wine snob, but I can like tequila.
Steven Butala’: Here’s the new name of this show.
Jill DeWit: Uh-oh (negative)
Steven Butala’: Jill goes to a tequila tasting.
Jill DeWit: That’s right. That is the new name of the show.
Steven Butala’: Gets carried home.
Jill DeWit: Thank you.
Steven Butala’: Steve carries her home.
Jill DeWit: That was good. Okay. Alright, so back to the question. Robert wrote, “I purchase a parcel in the Joshua Tree area last year. The previous owner had purchased a parcel from a tax deed sale. I sold the parcel double what I bought it for a short while later.”
Steven Butala’: We do this all the time. Exactly this situation.
Jill DeWit: Yep. A few months later after the sale, the person who bought the parcel from me asked if he could have the previous owner sign a notarized affidavit so that he can get title insurance. The question is, do I need do this? I would prefer not to bother with the previous owner, but I would if you all agree I should.” And that looks like some of our members … I know we’re going to have our own opinion here in a second, but-
Steven Butala’: Kevin nails it here.
Jill DeWit: Kevin-
Steven Butala’: Kevin our moderator.
Jill DeWit: Our moderator already re-wrote in and gave him a really good answer. Kevin wrote, “Rob, this happens sometimes in the property that we self close as resold. The title company can request the affidavit, and I let them handle it. I think it looks more official, et cetera, when it comes straight from the title company.” I agree. “I would avoid doing their legwork for them.” There’s another good reason. “Provide them the contact information and let them do the rest. Good luck on this.” And that’s perfect. That’s exactly right. That’s how we do it.
Steven Butala’: Somebody buys a property at a tax sale, they sell it to you, good for them, mark it up a little bits, resell it for twice what you paid. Good for you. The person you sell it to, even better. Sell it to somebody else for probably retail value and that person expects title insurance, which I understand. The title agent, if they’re good, is going to send you a tiny little packet, probably requires two, maybe three signatures, that just says, essentially if you really read it because we get these probably once a month … You can imagine on almost 16,000 properties we get stuff from 2004.
Jill DeWit: All the time, right.
Steven Butala’: And if you really read the fine print, and I have, what it says is you are signing this affidavit agreeing that you own the property and that you own this company that owns the property during this time. So, I’m not a big sign without reading person at all. I read everything, and that is well within my risk threshold to sign.
Jill DeWit: Just I promise I owned it from the day to this date, and that’s me done.
Steven Butala’: As you’ll see in a second this, this question is very tied to this topic. Today’s topic, run to the bank, notary close, and then get title insurance afterward. This is the meat of the show. Big smile on her face when I read her this title and what I really thought it meant. Jill, like this going on right now, you want to fill us in?
Jill DeWit: Yeah. So, basically long story short, have a seller come to me. And she needs the cash. And I looked up the property, and we agreed on the price and everything’s good to go. So, I’m doing my due diligence and bless her heart, I found out she owns two properties she didn’t even know. And again, she needs the cash. So normal circumstances, she’s in a hurry, her husband passed on, I’ll tell you right now. And she’s actually ill herself, and I really want to help her out. That’s why she’s reaching out because of the service we’re providing. And I will follow through and I will pay her cash and I’ll get it to her quickly cause she really needs it. So, I looked at the property, did all my homework. It was like several calls of the county too just to confirm. I need to make sure because on the deed … I’ll get into deed … Well, let me give you the big picture, then I’ll get into the details.
Jill DeWit: So anyway, she needs a close. I found the other property. I called her, let her know that I’m happy to buy both. I’ll double the price, because that’s who I am. She’s like bless you, child kind of thing. That’s really kind of it, because she’s really elderly. And I said, “All right, we’re going to do it on Friday.” By the time it airs it’s like today, and we’re going to get it done right away. Pay her the cash. Now, behind the scenes, what’s really going on is I want to title insurance, because these are really good properties that I would normally want to run them through escrow and spend the time and get title insurance. So when I go to sell them, I’m good to go.
Jill DeWit: But you know what? I made a commitment to her, and she really needs the money. So I’m following through with what I am doing, and it’s taken a little more time, a little more work and it’s going to cost me more in the end. But I’m falling through, again, with my commitment to her and making it easy. So, we’re doing our own self close on these properties. Then, I’m going to go … Once it’s all done, I’ll go back and open up a official title, escrow, and get a policy issued on both properties.
Steven Butala’: And so what will end up probably happening is that when we seek this title policy out, the affidavit that we were talking about earlier in the question there, that will get sent to this to our seller, and she’ll sign it.
Jill DeWit: Sign one more time.
Steven Butala’: And because Jill’s being so nice about this … You know, you have a choice when you get these affidavits. You can put them in the shredder. You can say, “I sold the property.” It’s what we were talking about yesterday. There’s crooks all around you. You don’t have to … You can choose to be not a stand up guy and shove that stuff in the shredder. You already made your money. You doubled your money on a piece of property. That’s extraordinary. And you only put yourself at slightly more risk by signing this thing, so everything that you would ever really truly be taught in Wall Street Business School is you have nothing to gain to sign this document except doing the right thing and being a good standup person. And so she will sign this because probably Jill’s established her trust to the point where Jill’s asked her to do it, and she’s got a cashier’s check.
Jill DeWit: Right. What’s interesting that people don’t realize is that you can do it this way. And this is one of the reasons that you would. Maybe it’s like run to the bank situation too. She needs her money more than I need to acquire the property. She’s not going anywhere. There’s some special circumstances. I had to jump figure out some of the title issues and make some extra calls. There’s some special things that I’ve got to do that I know how to do. So, it’s not problem for us to do it this way. But a lot of people, they might like go, “Holy cow.” You get these calls, and then I need to go buy this property right now before this guy changes his mind.
Steven Butala’: Yeah.
Jill DeWit: That would be a reason that you do this too. You know it’s a property that you would do all your dull and due diligence. You feel really good about the ownership. You don’t think there’s anything unusual going on. You can verify it all. So, you might really quickly do your own self close and then go back. That’s what a lot of people do. And then get tile insurance later on. The thing about the title insurance is these two particular properties, they are set up to be built on someday. Do I think that my buyer is going to be that kind of a person right out of the gate? I do not. Most of my buyers, we still do primarily wholesale, so most of my buyers are not the end user. I price them that way. I want them to make even more money. It’s great. But it will make the property more valuable, when I’m all done when I put it out there for sale, it has title insurance. That’s the reason why.
Steven Butala’: Oh, way, way, way more valuable. Probably twice as much, twice as valuable.
Jill DeWit: Right.
Steven Butala’: I would say close to that.
Jill DeWit: Exactly. So, I’m buying these two properties. I’ll tell you my numbers right now. I’m buying each total for $4,000. So, I will probably sell them for probably $10-12,000 each. You think lower? Eight?
Steven Butala’: No, I think they’re … One property in particular is worth $80,000 wholesale.
Jill DeWit: Well, my 10 to 12 is pretty good then.
Steven Butala’: No, it’s 80,000 wholesale.
Jill DeWit: I don’t know about that. Okay. Okay. I didn’t like that. If you think so, I get it.
Steven Butala’: Yeah, I’ll support that if you’d like.
Jill DeWit: Okay. Anyway-
Steven Butala’: I have to ask you, how did you come up with that number?
Jill DeWit: My offer price?
Steven Butala’: No, I came up with the offer price number.
Jill DeWit: Well, I backed it into your … the way you usually price things.
Steven Butala’: Yeah. I was just jumping up and down and when these came in.
Jill DeWit: Oh, okay. I was just jumping up and down to sell them for …Ii knew 10 to 12 easy, because I know the area.
Steven Butala’: 10 to 12 each?
Jill DeWit: Yes.
Steven Butala’: All right, so … All right, so-
Jill DeWit: We’ll talk.
Steven Butala’: I think we’re good.
Jill DeWit: Excuse me while we have a business discussion.
Steven Butala’: We got to wholesale these out to our existing group, I think, and net 30-40,000 and feel great about the fact that they’re easily worth 80, probably wholesale on top of that. And I’d walk away happy.
Jill DeWit: Okay. You know what? This should be a show.
Steven Butala’: This is a show.
Jill DeWit: No, seriously. It is a show. I’m just saying, here’s what we should do another time for a show. You and I should both sit down together and look at a property and talk about it, about what we think we are going do with it, what we’re going to sell it for, why, justify it, look at our numbers. That’s a show.
Steven Butala’: I’m taking notes right now.
Jill DeWit: I think that would fun.
Steven Butala’: Once these are purchased, we should do it in this venue.
Jill DeWit: That would be good.
Steven Butala’: Hey, we know your time is valuable. Thanks for spending some of it with us today anyway. Join us next time for another interesting episode.
Jill DeWit: And we answer your questions posted on our online community found at land investors.com. It is free.
Steven Butala’: You are not alone in your real estate ambition.
Jill DeWit: We could do that.
Steven Butala’: Every time a mailer goes out that’s a regular mailer for this, for what we do for this type of product, which was a regular mailer for this, I expect a tremendous amount of anger and hate. And then I expect someone who says, “You know what? I got to close this deal today.” And couple of people, not one, but maybe three to five people that are in this situation where they’re like, “Yeah, your timing is perfect. I just want to get out [inaudible 00:12:07]. Just let me know.” And then there’s a few negotiation deals. It’s really consistent. And this mailer’s been … we hit our numbers perfectly.
Jill DeWit: Yep. It is-
Steven Butala’: Are you happy with it?
Jill DeWit: I’m very happy. Wherever you’re watching or wherever you are listening, please subscribe and rate us there.
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Steven Butala’: To buy undervalued property.
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