Early in my career I had three of my very first deals that were coming to close. On the very first of these deals, I was just 3 days from the closing, and incidentally also 3 days from the approval letter expiring. That deal was going to bring me a very badly needed $12,000 paycheck. That paycheck meant the difference between my family eating the following month or not. Needless to say, I didn’t just WANT that deal to close, I NEEDED that deal to close. I felt pretty good about it because I had met with my attorney three separate times to explain how I intended on closing the deal and how I utilized land trusts in the transaction. She assured me she could close the deal. Again, she ASSURED me that she could close the deal. Well, apparently there was something missing in either my explanation, or her understanding, because that fateful day (just three days prior to closing, and three days prior to the approval letter expiring), I got a call from my attorney telling me she could not close the deal. I was shocked. I was confused. I was scared and stressing out because I NEEDED that deal to close, along with the two other deals to follow! What would I do?!?!?

Here’s what I learned, and what you can learn from my mistake. Simply put, you can’t just ask your title company if they do double closings. You can’t just ask your title company if they’ll work with land trusts or options. If you’re going to do this business, and you’re going to do it right, you will have a very specialized closing that will take place, and you need to go over it step by step with your title company to make sure they will do it correctly, so when the time comes to collect a large paycheck, you can actually do it. You need to review with the attorney how many HUDs will be generated, where each of the HUDs will be sent, as well as who the buyer and seller will be for each of the transactions. Go over every single detail of the transaction, every single detail.

Even after doing this, you should still expect something to come up. Every deal seems to have something come up. A road bump of some sort. Expect it, and work your way over it. Then collect the paycheck. This is the reason why it is best to try and close your deal while you still have two or more weeks prior to the approval letter expiring.

So what happened with those three deals? I got all three of them closed, but it was very painful and very stressful. I did not like the way my attorney operated or how she handled the transactions, so I fired her after those three transactions closed. I found myself a new attorney and have been using her ever since.

Please use my lesson above to make your first few closings less stressful. The first couple closings are critical. I hope what I just shared with you will help.

Marty Schulting

In this post I’m going to discuss some laws that may apply to you regarding foreclosure investing in your state.  My home state as well as at least 11 others are implementing new legislation this coming week will effect everybody from homeowners to investors to real estate agents and brokers. I’m sure that many people out there (not you of course!) will remain ignorant to the new laws, thereby putting themselves in a dangerous position by continuing to do business in the same way that they always have, which may now be against the law. I’m writing this post simply as a reminder that whether you are a real estate agent, a real estate investor, or in any business dealing with real estate and home owners, you should be very well aware of your current local laws, and you should make it a point to be in contact with someone that can always keep you updated on any new laws. This will not only help ensure the longevity of your business, it can also keep you from getting into a lot of trouble.

You should always have a good real estate attorney as a member of your business team. Someone that you can go to on a regular basis, and know that they are providing you with current, accurate information. Our attorneys are currently in the process of modifying all of our documentation and disclosures to ensure that we comply with this new legislation. I’m very confident with this, because I know that our team of attorneys are very good at what they do.

That was the main point of this post; always get competent legal advice before implementing any new paperwork or strategies in your real estate business. Never, never rely on some paper work that you’ve gotten from a course before having it reviewed by a professional in your area. Also make sure that you understand your local laws and are also abreast of any new legislation.

Happy investing,

David Corbaley

Today I’m going to cover the topic of building your dream team.  In order for you to build a successful short sale business, we need to develop a team of professionals that can help.  I’m going to discuss each team player and their purpose.  One of the most important people on the team should be a real estate agent.  A real estate agent can perform many functions, including, providing comps on the property, allowing access to the MLS, dealing with the homeowner, marketing and selling the property, and if you train them correctly, many are even willing to manage a clean out and cleanup of the property prior to marketing it for sale – definitely one of the most valuable team members you can have.

Next is a title company. When you start working with the property, one of the most important things you can know is all of the information regarding the title.  Having a relationship with a title company can allow you to receive free preliminary title reports, and understand any issues that may be associated with the property. The title company can also help you resolve these issues and give you valuable tips in doing so. Once you have a relationship established with a title company you can expect prompt service and as many free preliminary reports as you need.

An escrow agent or closer that understands your business is invaluable. They can fix last-minute issues that arise, and they also have relationships with many title companies,  other real estate agents and brokers and even some underwriting lenders.

Many people underestimate the need for a mortgage broker. When you have a good mortgage broker on your side you can understand the current lending trends and what your buyer can and can’t do based on the current market. For instance if you know that it’s very difficult to get 100% loan, and your buyer submits an offer that states they are getting a 100% loan, you certainly know that you need to question this offer. Additionally there may be times when your buyer’s mortgage broker can’t find the correct financing to finance your type of transaction.  Many times you can refer your buyer or your buyer’s mortgage broker to your mortgage broker who can smooth out the transaction and make things happen. Don’t underestimate the value of a good mortgage broker on your team.

The paperwork and forms that we use in this business are crucial, not only for getting a deal done correctly, but for protection as well. A knowledgeable real estate attorney that understands your transactions is an incredible resource. Make sure you develop a relationship with an attorney that you trust, and pay whatever it takes to have them review documents before you use them. Make sure that you never, never use some boilerplate documents out of a course, or something that you downloaded from the Internet until you have your attorney review them to make sure that they’re applicable in your area.

Don’t forget a competent tax professional. When you’re dealing with buying and selling real estate there are potentially some very large tax implications that you need to be aware of. Having a relationship with a qualified tax professional will help you to be prepared should you need to pay excessive taxes because you’ve made large amounts of money. Don’t get caught short on this one, start early.

We’ll discuss more about correctly using all of these team members in later posts.

David Corbaley