Real Estate Training "How to Make Sure Everybody Wins – Especially You!"

In their desire to create a Win/Win transaction for everyone, well meaning Creative Real Estate® Investors sometimes allow themselves to be taken advantage of. Don’t let this happen to you!

Remember “Win/Win” also includes “You.” Remember that you are trying to not only run a business, but also to stay in business. When it comes to working with others, make sure you know all the limits – yours and theirs - and set boundaries for yourself.

The problem often begins with the structure of your team. The professionals you choose for your team may be your best business decision – or your worst! In fact, some of the most incompetent people you may encounter may be other licensed professionals in the business. Many of them will not understand your plan, or they may even be intimidated by your ideas.

Incompetent professionals are a dime a dozen, so never settle for less than the best. Especially be careful with the mortgage brokers you work with. It is easy for an unscrupulous mortgage broker to your deal with unnecessary fees, and the worst of them will cost you even more money by giving you a loan with a higher interest rate than you deserve. Even as little as half a point can mean more money for the mortgage broker, but a lot more interest for you!

You already know that any documentation you use for your Creative Real Estate transactions should be carefully examined. Make sure that you include any settlement statement on loans you acquire. By law, every time a mortgage broker puts together a settlement statement they must go over the documents with you carefully, clarifying the amounts of and the reasons for, any fees. During this process you may catch fees that may seem legitimate, but which, upon careful examination, are not necessary.

There are some steps you can take to make sure that you stay in a Win/Win transaction:

Stay in control of your transactions from start to finish.

Sometimes, out of ignorance, a real estate agent will tell you that what you’re doing is illegal. Remember many real estate agents will not have dealt with a Creative Real Estate® investor before, and some may even feel threatened by you. The fact is, any time you put an option on a property, you are representing that property as a “principle buyer” so it makes it perfectly legal for you to “transfer” or “assign” the property to someone else. You are not acting as a broker.

File your notice of interest to protect your interest in specific properties.

Any time you put an option on a property it is extremely important for you to go down to your County Recorder’s office and file that notice. First have your notice of option notarized, and then take it down to your County Recorder’s office for filing. This process only costs about $10.00 and is well worth the small cost. You can also file through your title officer who can notarize and file the notice of option for you. Filing protects your interest in that property and the property can not be closed on until you release your option. It will also protect you if someone tries to file other liens on that property, because legally you must be first notified. By filing, you are basically clouding the title, and nothing can be done as long with that property as long as the notice is in force. So whether you’re doing lease purchase or pure options make sure you protect your interest!

 Thoroughly research your titles and warranty deeds.

Be sure to do your due diligence thoroughly. You may receive a title or a warranty deed but until you know for a fact that they have been recorded, you will be vulnerable. The real estate business is one that attracts frauds, so to protect yourself, research your titles properly. You should get social security numbers from your sellers, because it can take up to thirty days for the IRS to place a lien on a property. With your seller’s social security number your title officer can do some research to see if any IRS liens are pending for that title.

Do due diligence on your tenant/buyers.

It is always wise to get social security numbers on your tenant/buyers. If they damage your property and leave with rent due, a social security number may be your only way to locate them. You can find anyone, as long as you have his or her social security number. When doing your due diligence, make sure you include these steps:

• Meet with them at their current address, to verify that the information is correct.
• Verify at least the previous two years of employment and salary. A letter from their employer(s) is an excellent way of doing this.
• Verify their residence information for at least the previous two years. Again, a letter from their landlord(s) is an excellent way of doing this.
• Check their criminal record. You can do this online at www.tenantsafe.com or ww.ntnonline.com.  Maintain a positive attitude.

The greatest predictor of your success is your own self-talk. If you are hearing that little voice inside (and it’s basically beating you up!) well, you’re going to need to put a stop to it! A good technique to change your attitude is to write down all the negative self- feedback and change it to positive. For example, change “I am so stupid!” to “I am so smart…I am a learning machine!” Once you have changed your thought, rip up the negative note, and paste the positive note somewhere obvious, like your bathroom mirror. Review it everyday. Get sticky notes and stick them all over your house. You’ll need to do this consistently for at least 2 weeks to see the effects. After all, think of how long you have been telling yourself all those negative things! You’ll need some time to let the positive thoughts push those old negative ones out.

And last but not least…know where your wallet is at all times!

by Editor