Foreclosure Deals Coach Podcast

Unveiling the secret to finding investor title companies for your deals

August 31, 2023 Chris Lawler Season 15 Episode 3
Foreclosure Deals Coach Podcast
Unveiling the secret to finding investor title companies for your deals
Show Notes Transcript

Are you looking for investor title companies to help you finance your deals? In this video, I'll unveil the secret to finding title companies that are perfect for your needs.

Donny Coram is the Foreclosure Deals Coach and he's here to help you find title companies that are right for your deals. He'll show you how to find the right company and how to negotiate the best terms for your investment. This video is a must-see if you're looking to finance your Real Estate deals using investor title companies!

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Welcome back deal hunters. In this episode, we're going to discuss how to find an investor friendly title company to do your deals. Stay tuned. Welcome to the foreclosure deals, coach podcast. The real estate market is shifting. The time is now the foreclosure deals. Coach podcast is your home for the mindset tactics and tools needed to break through your limiting beliefs and find freedom by investing in foreclosure deals. Right now and now your host, the foreclosure deals coach, Donnie Corum. Hello. Hello. Hello. And welcome back to the foreclosure deals coach podcast. I am your host and foreclosure deals coach, Donnie Corum. And in this episode, we're going to discuss finding and the importance of an investor friendly title company to help you do your foreclosure deals. As we get started, as always, we're going to do our mindset piece, because if you're not thinking about how approaching real estate investing is going to work for you in a positive light. You're not likely to receive this information. Well, let's hop in with a little bit of mindset stuff. And this quote comes to us from Steve jobs, where he said, great things in business are never done by one person. They're done by a team of people. Now think about that. Can you think of any world class organization? Whether you're talking about sports teams, I'm a big fan of the New York Yankees, but that's not a team that can be played by one person, right? Then you look in the business space. Steve jobs, a great example, a corporation with thousands, hundreds of thousands of employees all across the world, working in tandem, create this incredible organization. Now you're getting started as a first time or maybe repeat flipper and looking to build a structure or a flipping organization. Well, you're going to need a powerful team to get that done. We're going to get into how title companies affect this in just a little bit, but part of my team, just to give you an idea, I've got my five F strategy, right? And the first step in the five Fs is finding great deals. So for that, I've got an acquisitions manager who makes sure that we're finding the best deals in the market. From there, we have. Figuring the deal out, right? And in the figure stage or analysis stage, I still do a lot of that myself because I love the analysis phase. I can do that from anywhere in the country. So I generally handle that. From there, we have our funding or how to pay for the properties. And I've got a dedicated funding manager, Mike with Traction Capital that handles all my funding for myself and my clients. Then we have our fixing stage where I have a project manager and an operations manager on the team there. Finally, we end up on the flip stage where we get the property sold and where we bring in the title company for the last 15 years in the game, I have used the same closer in my closings and it's Angela who works at Rocky mountain SoCo title. So for all of my local clients, people who are buying in Colorado Springs, we go through Angela. However, you may be located anywhere in the country watching this show and trying to figure out how to find a title company. That's quote unquote. Investor friendly. So we're going to jump in and talk about building a team with an investor friendly title company, because without a good title escrow agency, you're going to do all the work to get a deal started through the process funded. Set up for quotes to get the construction done, just to end up at the closing table, and I can't tell you how many deals I've seen blown up by ineffective or inept titled closing agents. It's not their fault. Not every title company is created the same way. If you don't have experience in the wide world of real estate investing, you are probably not very well equipped to handle an investment transaction. That makes sense, right? But if you're a title company, you tend to approach real estate closing is all the same. You get the title work done. You do a title search. The lender brings the money in. You file the paperwork for the loan. You close on it, bada bing, bada boom, you're closing. Most transactions in the retail world are pretty easy to predict because they all work basically the same. However, in the investment world, the reason we make money because we're operating in a dynamic where most people are not looking to invest. In real estate, they're mostly buying a home. They're going to live in with their family for them. It's a very exciting day. Not that I don't still get excited when I buy a property as an investor, but for me, it really is doing it by the numbers. And when I send my files to the title company to be closed, I'm really impressed by the fact that I'm very rarely involved in that transaction until I get to the closing table and have to sign. Okay. Getting there takes time. Obviously, I've been with my same closer for a long time because Angela knows my process inside, outside, and backwards. And as a result, I don't have to give it much thought. If you find yourself continually being involved in the title part of the transaction, it's because you do not Have the right title company yet. If you're just getting started, you're probably wondering what a good title company looks like. So on this episode, we're going to go into some detail about how to find a good title company. Now, right before we dive into that, I want to explain where this desire to talk about this came from. Okay. Obviously I've been in the game for quite some time. I've been working with my title company for quite some time, but recently. There was a pilot program introduced by Fannie Mae to eliminate the title company from the transaction. The idea was to make it a little more cost effective because title companies do add, you know, a thousand to 2, 000 on every transaction and for the consumer. Doing hundreds of thousands of transactions all across the country, millions of transactions, right? That's a huge cost item when you add it all up. So Fannie Mae proposed in this housing wire article, I'm going to show you here. Now they propose accepting what they call the attorney opinion. Letter in lieu of doing title insurance. Now, there were some people who were for it because we're going to save some money. There were others who were completely against it. It didn't last long because they realized that the title escrow process is so complicated and so much can go wrong with finding liens on title or finding issues with title that justice accepting an attorney's opinion on it was not going to be sufficient enough to protect either the buyer. Or the lender in that transaction. So they opted out of that pilot program. We're going to continue with title insurance for the foreseeable future. And being honest with you, I like my process the way it is. So I'm kind of happy they did not go with this. Let's go to attorney opinion letters. Although the temptation would have been to save the cost. I can tell you that there's a lot more complication to doing title work well. Then just getting the closing gun. The reason they brought it up though, is this is a 3. 37 billion industry. Okay. While they only paid out 162 million in claims. So if you look down on the surface, like all of insurance. It kind of, it reeks of scam a little bit, right? It looks like a lot of money is coming into the title insurance world and not a lot of money's going out. Well, the reason that is is because of title insurance has done well, or title research has done well, there should be very little claims against that. Right. Should it be as expensive as it is? Should title insurers, these are discussions for another time, but the bottom line is title is here to stay. And you as an investor are going to need a good title company on your team. If you're going to do a consistent amount of deals, keep this in mind, the title company, the first time you interact with them is when you're acquiring the deal. And like we say all the time, we make our money when we buy. Okay. So you're purchasing this home. Like I said, research goes into that. Time goes into that. You have a seller who is generally not as experienced in the transaction as we are, right? You've got a lender who wants to make sure that their interests are being protected. And then you've got you who wants to make sure that you're being protected, that there are no additional liens on the property. And that when you go to sell, you're going to have equitable title in that property. So you were also getting a great deal on the home. When you combine all of these features, you start to understand why it is a super important to make sure that you get the right title company involved in your transaction early on, and that you build a relationship with that title company. So you were continually doing business with a company that you know, and trust and can get deals to the closing table and close consistently. Cause when you sell the property, that's when you're getting your paycheck. That's when you're realizing your gains. And if you've got a good title company, it's going to be very easy to get to that paycheck, rinse and repeat and get onto your next deal. Whereas if you've got a bad title company, it's very easy to find yourself at a jam. I can't tell you how many times I've talked to real estate investors who were just getting started out, who thought all title companies were created equally. I ended up going with a title company that couldn't get the deal closed and ultimately cost them that paycheck. Maybe even the deal entirely that you go find another buyer and start over. You don't want to be in that spot. So here's three things to look for when you are finding your investor friendly title company. The first one is the age of the company. Listen, guys, experience absolutely positively counts in this game. Okay. And if you get a title company, it doesn't have a ton of experience. And I'll tell you, this is one of those industries. Once again, look in the stats that billions of dollars were brought in and 160 million was paid out. Okay, this is a very lucrative industry for the right people. And so title companies start and close all the time because the sophisticated title companies make this look easy. I can tell you I've never done. Like title research or things of that nature. But for what I know about it, it is extremely complicated. And as data gets older, it's harder to find that data. Now, things like blockchain and other steps are taking to make that process easier to find real estate data. But if you're buying a property that was turn of the century and here in Colorado Springs, we have a lot of properties that were built in the 1890s and 1900s, you could find yourself in a jam if that title work is not available. Like if you can't find all the stuff going back to the beginning, or if somebody is just not experienced enough to do that, so you really want to make sure that you have a title come and it's been around the block a little bit. Now I didn't quite follow that advice on this one, but I did follow my closer. So recently, Angela, my title closer moved from one title company. Uh, that she was with for a very long time of where I met her to a startup title company for more opportunity equity. I don't know the story. It doesn't matter, but because I have a lot of experience and confidence in Angela, I was happy to follow her to this newer title company. And as I expected, I've been super happy because Angela really is the key. Your closure is the key. So you want to check out how long the title company has been around. What kind of experience that they have and if you can work with them and that takes some time, if they throw events, go to that, you can all, most title companies offer training, but sometimes just stopping by the office and potentially talking to the closer that's going to be working on your file to make all the difference in the world. Take the time out to really learn about the history of the title company you're working with, because I promise you down the road, that information could be valuable to getting a deal done in a timely matter. And let me tell you. These deals are stressful enough as is not having a good title company. So your startup, they just started up last week or a ton of title companies are popping up virtually, right? They're sending out virtual closing reps and things like that. I am not against anything virtual. I'm saying that generally those are startups. Those are new title companies have been a brick and mortar operation for a very long time. So if you're dealing with a purely. Uh, virtual title company, best advice I can give you is beware. Okay, if they're just getting started up, there's a lot of things that have changed that are constantly changing in title and my advice to go with a local brick and mortar title company, your mileage may vary, but take the time to do the research and determine who you're working with before you get started in that space. Okay. The second thing. It's having experience with dealing with investors. Once again, not all title companies are created equally. Some title companies just do retail transactions. That's their bread and butter. They've been doing it for a while. They're good at it, right? They don't necessarily want to change because they don't have to. When you bring in an off market, weird deal that could be going subject to, or has crazy liens on it because the seller's in trouble or is facing foreclosure. You're really going to want to make sure that the title company has experienced dealing with investors like yourself. Where do you find these investor friendly title companies? Well, for me, I go online to Facebook groups. I was doing a deal in Florida and I don't have as much experience on doing deals in Florida. So I went to real estate investment groups in there and I asked around about investor friendly title companies, got a couple of recommendations. And that's how I selected which title company I wanted to work with. Now, generally on the acquisition side, the agent or what was representing If it's listed, they've already selected a title company, you don't necessarily have to go with that. Okay. It's up to you as the buyer to determine if that's the title company that you want to use. But my advice is have your own recommendation on a title company you want to work with. Okay. If you can't find any end user investors to recommend, contact me. A title Estro company to you ask private money lenders or hard money lenders in the area. Certainly if you're getting a loan from a hard money lender, they're going to know who they prefer to work with as a title company, where things have gone through, but ask other investors, people who are in the industry and find an investor friendly title company as you're getting started and make sure that's a critical part of your team because you're going to be working with them a lot. Do not wait to do this after you have a deal under contract. Nothing can be worse than trying to find your escrow agent. After you have a deal, you want somebody who can do the title search for you early on, can help you with the process from the very beginning, not after you're already negotiating with a motivated seller, because I can tell you, if you don't know, if you don't look like, you know what you're doing, because you're scrambling to find this investor friendly title company, after you've already gotten your contract or you're working on a house, you're going to lose the confidence of the seller. And you're going to have a harder time putting that deal together. Okay. So really work at this in the early stages, as you're building your team, you're gonna get much better results that way and end up with a better title company in the longterm. The last stage, when you're selecting your investor friendly title company is to ask about hold. Open policies. Now I'm pretty sure most, if not all title companies offer, hold open policies. If you don't know what a hold open policy is very briefly, it's a title insurance policy that is held open for generally up to a year while you're waiting to sell the property. Now, this is a great cost saving mechanism because you don't want to have to buy title insurance twice. Generally, you're spending 800 to 1, 500 on the title insurance the first time by getting a hold open policy, which adds 10% typically, depending on the length of time that you're holding it open. You're about 10% adding on. Now you can use the same. Title insurance to sell the property as you used when you bought the property. This not only saves you money, but if you mentioned hold open policy to your title company, and they look at you confused or uncertain what that means. There's a good shot. They don't work with a lot of investors and they may not be the right fit for you as an investor. Okay, so ask about hold open policies, make sure they do hold open policies, make sure they're familiar with the term hold open policies. You're spending a little bit more up front when you get that hold open policy, but not only have you established that the title company can work with investors, you're going to save about a thousand to twelve hundred dollars per transaction. On your flip by holding that policy open and making it available for when you sell that house on the back end within a year. Remember we're owning these properties for a short period of time. The target is 90 to 120 days of total ownership from acquisition to sale. So you want to make sure you can cut all of your costs along the way in that short period of time. It's much different than a retail home buyer. Who's going to live in that house for three to 10 years, right? You are looking to get in and get out. And by using a hold open policy, your title company knows you're an investor. They will work with you as an investor and the process should go a lot smoother all the way through. The key here guys is knowing how to locate this use real estate investing groups on Facebook and otherwise to do that for me, I was blessed early on. I got a coach very early on in my career. He recommended the title company and an agent that I still use to this date. So I didn't have to think about this process much. And I'm so thankful that I had him to set me in the right path with lending and title and et cetera. And now that's what I do for my coaching clients as well. But if you're out there on your own, Trying to get established. You want to ask around a real estate investment groups, ask about who gets, where they get their hold open policies from, et cetera. Talk to flippers, not necessarily wholesalers. Wholesalers are often in the same spot where they're trying to scramble to find a title companies are getting started. We don't want that. We want to know that the relationship is established prior. And ideally the person recommending your title company has done a couple of deals with that company, at least so they can tell you which closure you could use, uh, which title company is the best fit for investors in the area, et cetera. By adding this person to your team early on, you're going to save a ton of time in the back end. Working on deals that are good deals. You don't want to have to find this team in real time. My team already consists of the best players in the game. So I'm confident when I find a deal that I can get it to the finish line profitably and quickly. And by establishing your title company contact early on, you'll be able to do the same as well. Guys, title company is just one of those very critical components that most people overlook until they're in the middle of a deal. Don't do that. Take the right steps early on to know who your title closing rep is going to be, which title company you'll be working with and get those relationships established early so you don't have to worry about that later. And that's the show for today, guys. If you like the content today, if I've been helpful to you, I would really appreciate it. If you'd hit that subscribe button below and become a part of the conversation, you can also join the Facebook group foreclosure deals, coach, just search for us there. And if you're ready to get started, click the link below, let's schedule a coaching call where we'll determine if coaching is the right fit for you to get you started in your real estate investing journey. But for now, that's my show. Thanks for tuning in. I really appreciate it. And remember don't buy a house by a deal. Thank you for tuning in to the foreclosure deals, coach podcast. If you like what you heard here today, remember new episodes are uploaded weekly subscribe, wherever you listen to your podcast, do you want more of the foreclosure deals coach? Are you ready to learn the mindset tactics? And tools required to be a successful real estate investor. If so click the link below to schedule a one on one coaching call today with Donnie Gorham, the foreclosure deals coach to determine if coaching is right for you. And remember don't buy a house, buy a deal.