July 2003
The REIT Real Estate Report is published about once a month. It is intended to serve no special or worthwhile purpose. It is just my way of telling you what is going on in the world of real estate education. My only goal is that I don’t get sued and you are entertained a bit. For an e-newsletter of merit, our next issue of Advice for the Impatient Investor will be out the first week of August.
Editors: Bernard 'Barney' Zick bernard@zick.com and Amy McIntee amy@emcii.com
In this issue I will trash a title company, remind you about an upcoming boot camp and tell you about a hot deal…a chance to make money.
Money first…I have a goal. I want a mortgage brokers license in every state and set up students to do loans. I started a mortgage company and, in the process, became a Mortgage Broker in Texas and three other states. It took about a year. Then, last month, I talked to my good friend, Mark Victor Hansen (the Chicken Soup king) who told me I could save about $70,000 and be nationwide in a month. It sounded too good to be true.
Here was my thinking…if you are “flipping” houses, you will show it to maybe 20 people. If you can place the home loan for the buyer, you could pick up about $1,200 to $600 more in profits. But, better than that, maybe 10 of the other buyers could buy a different house. That would be an additional let’s say $10,000 if all of them went through you for their home loans. Plus, you’ll have the fees on your own loans.
But, Mark’s deal is even better! If any of the people that you get to take out loans through you want to get others into the program, you will make a buck on them too. No, this is not a traditional multi-level; it is more of the type of set up you find with insurance companies, with a reward for bringing new agents into the business.
I thought there must be a catch! What about all the states with extreme requirements for becoming a loan officer? How do they get around that? Simple. This company signs you up as an employee. It has a hands-off system of applying for loans (Internet driven) so you do not break any laws by “processing” a mortgage. All you do is send folks to your web site and the processor takes it from there.
Of course, even though I trust Mark, I had to check this out. One guy I called at random told me he earned $6000 in his first 45 days. Impressive.
Why am I telling you about this? First of all, eventually you will hear about them. I’m keeping their name a secret for now. Now when you see their name on the web, you will know what they are and a little about how they work. They are a legit mortgage banker. Secondly, if you want in on something that is less than a year old and growing like stacked hot cakes at a Rotary cook off, then click on this link to learn more.
http://www.zickhomeloans.com
If you sign up, I have an “ethical bribe” for you. When you apply for your first loan, I’ll either give you a $495 home study course or $495 off of your attendance fee for our “How to become a Paper Millionaire” Boot Camp.
BZ
Now a quick paragraph about our upcoming event before we trash the title company…
At this time, we only have ONE Options Boot Camp booked for the rest of this year. This will likely change but, just in case, don’t let this one slip by you. It is in Phoenix on Saturday and Sunday, August 9th & 10th. As always, seats are limited, so call our office at 800-677-3253 to pre-register today!
Someone should close that title company down!
I was about to tell you to never do business with American Title Company. Why? I have had it with them. Most recently I had Christy King, a closing officer at American Title on Stubiner Airline in NW Houston do all she could to kill my deal. I know I can be hard to deal with when I am in a hurry, but what ever happened to the customer is always right? She worked so hard to kill the deal, you’d think she wanted to buy it for herself!
It all started out when Greg, a sharp guy and student of mine (remember, if you hear me talk, buy even one book of mine, then go out and make money, I will call you a smart student of mine!), called me on a deal. Greg had three deals going at once. The one that was a cash sale would not close and one of his buys was already 30 days past the date of closing.
The seller lived in Hawaii; his daughter and son in law occupied the home, in Houston. I don’t know if they were paying rent but they were not taking care of the property. There was a big mold problem and the insurance company had offered them $20,000 to fix it. Greg had it tied up with the $20,000 going to pay down the loan, leaving a balance of the low $80’s.
Greg called me to see if I’d pay him $2,000 for the contract. I was out of town and sent someone from the office to see the property. Monday next, I agreed to buy it and met with the kids and Greg at the title company. That is when I got a little upset.
I had all my documents needed on my laptop computer. American Title did not have a printer I could use, or one that would take my CDs so I could print what was on my computer. They did not have anyone that could help me and their fax machine was printing piles of paper the size of all the legal descriptions in Texas. So my office could not print what I needed and fax it to me. There was no phone line to use to send them the documents via email and I was writing what I needed in the lobby after hearing more details about the deal. I must admit I did make a comment about client friendly offices.
Stewart Title downtown used to do everything but give me a shoeshine when I closed there. Maybe I am spoiled.
We finally signed all the papers, moving the deal from Gregg to me. I put nearly all the money up in cash, but I told her I did not want to close today. She was upset about my delay. MY DELAY! I had heard about this four days ago, saw it today and said I’ll take it.
For some crazy reason, I did not want to close until I had a property insurance company that would give me a commitment. Call me silly. But, after a mold claim, some folks I know have lost deals because of a lack of insurance.
I gave Gregg his $2000 in the parking lot. I usually don’t pay until the deal closes, but, Greg is a student of mine.
By Thursday I had the problem solved… but there was some fun in between. Ms. King talked to the seller and suggested that he rescind the contract the daughter had signed with me because I was incompetent as a buyer and did not know what I was doing!
I certainly don’t think that is in the “How to Close Deals” manual of any title company. And, I am not incompetent. I might be loud, ego-driven, brash, impolite and much more, but with nearly two doctorate degrees, one in finance and one in real estate, I am not incompetent!
I had Greg calm down the dad and I kept the paperwork moving until I got what I needed to close. Mind you, I closed a deal in about four days, paying all cash. The APR (after repaired value) will be $129,000 to $139,000 for a quick sale and maybe $159,000 under a long term lease option. The total in it will be about $100,000 to $105,000 including all costs. I am putting one of my Platinum students in to this deal. Few people can step in and within only four days close a deal for all cash. She was biting at the wrong heels.
To add to the story, others have told me of last minute requirements that almost killed deals out of that same title company. So I was going to call this e-newsletter, “Lets Shut Down American Title.” Then Randy Stoka, a very successful student, pointed out he ALWAYS used American Title in Reno for his complicated exchanges and they were excellent.
Last month I put together a deal for a Platinum student in Australia. My main title company could not get it done. I called Quincy Long for help. He is a real estate attorney and member of our real estate investment club. He bailed me out big time. Got me the correct forms and answered questions. I told him I would love to give him all my title business even though he is on the other side of town. Turns out, his office an American Title Company office! Go figure.
Lessons learned:
- Getting a good title company, one with an officer that will stay there and knows you and what you’re doing, may be more essential than finding a good deal. If you can’t find a deal, you don’t get high blood pressure and nearly strangle someone like you do when you have a good deal and can’t close it!
- Don’t blame the whole company when you get bad service. In this case, it seems like this office is full of overworked, unhappy and less than helpful people, but the company, I have found since, overall enjoys a very good reputation.
So maybe those of you who are new to investing ought to take a title officer to lunch, one that fellow investors recommend, BEFORE you get your first deal.
Enough said.
BZ
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