No matter how long you’ve been in the real estate investment game; none if it matters if you can’t close the deal. Here are some basic tips to get you to the finish line with a paycheck in hand – smoothly.
Get The Seller Name Right:
Don’t roll your eyes at this one because it’s soooo obvious – sometimes it will take some digging and review of paperwork. When working with corporate entities make sure the entity is 1) in existence at the time of signing, and 2) the person signing has authority to act on behalf of that entity. This also applies to anyone using a POA.
Also, when buying or selling in a trust naming the proper party is a common mistake. Remember, a trust is just a piece of paper. A piece of paper cannot hold title. You must designate a legal entity to hold title on behalf of the trust. This legal entity acting on behalf of the trust is the trustee. Therefore, an example of the proper name for a Trust as a Seller would be “Investor Trustee Services, LLC as Trustee of the 123 Main Street Land Trust” – yes, the WHOLE THING.
RTR Title helps our Florida real estate investors with these little hurdles even before receiving the title order. Call us if you ever have questions about structuring your contracts.
Tell your title company if there is financing or an attorney involved:
It’s the afternoon of closing and your hard money lender sends over loan terms to the title company. Wait, What? Who? When? These are the thoughts running through your closers head. Believe or not, all those docs you sign at closing don’t just spit out of the printer with one click of a button. Each one is dependent upon the other which means adding a loan at the last-minute changes EVERYTHING. Get a general idea about how you’re going to take the deal down (cash, private money, wholesale, simultaneous closing, double closing, etc.), and let your closer in on the game plan.
It’s a favorite past time at my office for closers to stand right outside my door and make jokes about how “attorney’s kill deals”. The not so funny thing is… it’s totally true. If an attorney involved in a closing is not familiar with the in’s-and-out’s of investment real estate they WILL kill your deal. The same is true for title companies. You MUST find an investor friendly title company and investor friendly attorney. RTR Title has both under one roof so adding us to your real estate investing team simply makes life easier.
For example, we had an attorney from a very well-established title underwriter inform us that a corporate entity may not act as Trustee for land trusts. Well, that was of course news to me since I structure all of my personal real estate investment deals with an LLC acting as Trustee and have done the same for clients for almost 15 years. He eventually came to his senses, but not before everyone involved wasted more than an hour of time and the deal funded a day late. Lesson learned, let your closer know there is an attorney involved so they can get a package out early for the attorney to send a bunch of superfluous emails to justify his/her billable hours.
While we are on the topic of title companies:
Pick the right one. Don’t use a title company who closes a bunch of retail deals to handle your simultaneous closing, double closing or closing on a rental property taken subject to an existing mortgage. You’ll be delayed, the round robin of emails will be exhausting and that’s after they accidently slip up and release the name of your end buyer to the A side of the closing. This also applies to everyone else on your team – your realtor, roof guy, attorney, lender, etc. Find team members like RTR Title – ones that understand the needs of investors and their how to keep deals moving.
Stop going to seminars:
It’s one thing to go to some introductory seminars to get a basic understanding of real estate and to “learn the lingo”; just don’t become a professional seminar attendee. They’re expensive and usually offer nothing new. Let’s face it – investing in real estate is not a new concept. With the exception of some real estate crisis like we had a few years ago there is nothing that hasn’t been done. Even considering that last crisis, it’s all been figured out. If someone is selling the new and improved way to invest – BEWARE.
Instead, heed my last comment. Get the right team of people, and you will learn far more than any seminar is going to teach you. Also, you can save all that money you would have spent on seminars to actually buy an investment property.
At RTR Title, we’ve closed 1,000’s and 1,000’s of investor deals. Our clients trust us so much that we even offer “courtesy closings” for clients being forced to close somewhere else. It’s just easier for us to clean up their mistakes before they happen and simultaneously save the deal on their exit closing. If you’ve been looking for an investor friendly title company, or if you’re current one seems to be dropping the ball, call RTR Title or send over a contract to give a shot. You’ll soon learn what it really means to close with an investor friendly title company.