(···1.0s) Other CI circumstances may be that, let's say that a homeowner (···0.9s) is,
they lose their job and their mortgage payment is a thousand dollars a month. Well, they
obviously can't make their mortgage payment because they don't have job income.
What are they gonna do if they call their lender? (···1.2s) Let's say that three months
later they get a job. Well, now they can start paying their thousand dollars a month
mortgage again, but they don't have the $3,000 to catch up on the payments that they
missed.
(···0.6s) So a forbearance agreement might be that the lender would either attach it to
the end or they might have the homeowner pay back 1,250 or a year to catch up those
payments and then they'd be back to normal. And the, um, end of the mortgage date
would remain the same. So either it gets attached to the end or you pay more over time,
which (···0.5s) more than likely it's going to be at the end. (···1.4s) If you've ever heard
(···0.6s) any of these lenders, if you've called them and they'll say, if you're a victim of
Hurricane Charlie or you're a victim of Hurricane Katrina, what have you, (···0.6s) they'll
say it on their recording, press this number.
And I like to think, you know, that's great. I think, I think it's wonderful that they're
helping people in times of a natural disaster, what have you. It's great marketing. And so
(···0.5s) in oh four I was hit by Hurricane Charlie and I live on the beach here. So my
property had three and a half feet of water under the house, but I owned a multi-unit and
there was three and a half feet of water in the house.
It was a four unit. So two of the downstairs units got flooded. (···1.0s) And I said, you
know what? I always hear on the mortgage companies, if you've been a victim of, you
know, this natural disaster, what have you, then (···0.8s) press three. So I called the
lender (···0.6s) and I said, you know, I I, I (···0.8s) listened to the recording and I
decided to find out what my options are for payment. Obviously my tenants couldn't live
in the property, right? And they said, oh yes, we can suspend payments for 90 days.
And I said, great, you know, we're, we're rehabbing out of pocket right until we get our
insurance. And I said, well then what happens after the three months? And she said,
well, then you have to pay. I (···0.6s) said, (···0.7s) pay like now. (···0.7s) So their idea,
it sounds good, right? Good PR on the recording. If you've been a victim, press this
number and we'll help you. Well, their way of helping was we'll suspend payments for
three months, but then it's all due. That doesn't really help.
I obviously just continued making the monthly payments because I didn't wanna have a
bigger payment at the end, right? So (···0.5s) sometimes that sounds good, but I can
tell you that lenders currently are more working with more homeowners for the
forbearance agreements. And I wouldn't, I would guess that there might also be
circumstances that will be covid related as it relates to foreclosures, just like after the
crash. And I told you that with the deficiency amount that Bush created an act that for a
certain amount of time those homeowners didn't have to pay the tax on the amount that
they were short on their mortgage.
There might be other things that come out of the covid disaster where it may affect
foreclosures as it relates to that, not necessarily from a tax perspective, but who knows
might be that it doesn't impact their credit. Whatever the circumstances are. (···1.6s)
Foreclosures, (···1.6s) hopefully, you know what a foreclosure is, right? It's basically
when somebody doesn't pay their mortgage and the lender is going to take action to
take back the home, or potentially an investor buys it.
But there's two types of foreclosures. (···1.9s) Most states there's a primary way, but it
could be both ways. (···0.7s) Excuse me, judicial foreclosure, what does that sound like,
judge? Right. So this goes through the court process. So Florida is a judicial foreclosure
state, and I told you that we were one of the states that had a large amount of
foreclosures. Well, (···0.9s) throughout that process, every other (···0.6s) lawsuit
basically was taking that much longer time.
And I remember I (···0.7s) don't always have as direct contact with my tenants or my
properties, but back then I was filing a notice, um, an eviction notice, and I was at the
county to file the notice. And there was this long line and (···0.6s) I commented to the
person behind the counter, I said, I've never seen so many people here. And she said,
honey, everybody's suing everybody.
There's more divorces. People are trying to sue each other for money, blah, blah, blah.
So it literally bogged down the system. And what Florida did, they called it a rocket
docket, and I don't know if it was in every county, but it likely was. Um, they basically
hired, (···0.5s) you know, contracted with former judges to all day long. What they did
was they heard foreclosure cases and they were just trying to clear out the calendar.
The legal calendar is called a docket.
So they had this little technical term, which was a rocket docket where they were trying
to basically get all of the foreclosures caught up because it was bogging down the entire
system. So going through the judicial process, the court system generally takes a longer
time than a non-judicial foreclosure. So typically there, there's language written into the
mortgage or, um, the documentation that will allow the lender (···1.1s) upon the
happening of certain events or timeframes that then they are able to go ahead and
foreclose on the property without having to take it through the court system, which takes
extra time.
(···0.8s) So judicial or non-judicial, (···2.3s) Liz Penance, (···0.5s) that is the legal
notice. And it's actually Latin for litigation pending and it relates to real property. So Liz
Penance is the legal notice (···0.7s) mortgage. I think everybody knows what a
mortgage mortgages that's basically, um, (···0.6s) Allows the lender to sell the property,
right?
If you don't pay defaults on the provision. So defaulting on the mortgage, that's the
amount that's owed. And then the note itself is your promise to pay. It's typically called a
promissory note. (···1.0s) Notice of default in many states, this is a document that starts
the process of foreclosure. So they're filing a (···0.7s) notice that the homeowner has
defaulted on the loan and it's also referred to as an N O D for short notice of default
(···4.0s) Redemption.
So I talked about that. There are states that have redemptive rights, which will basically
cancel out the auction. It's a rewind. Um, this also happens as it relates to property tax
sales. For instance, in um, Texas, they have the mortgage foreclosures.
It's the first Tuesday of the month (···0.8s) they have the mortgage foreclosures in part
of the, I've been on the courthouse steps, but I haven't been to every county in Texas.
But they have the mortgage foreclosures in one area and the tax sales in another area.
But then (···0.8s) there will be a time period where a homeowner has the right to
redeem or a redemption or a redemptive, right? And the redemptive right, that they
have, um, is referred to as their redemptive, right? Sometimes investors can buy
properties (···0.6s) or buy the redemptive rights from the homeowner.
Doesn't happen everywhere. But that would mean that you wouldn't have to wait until
the redemptive right expired. And we'll talk about that little bit more, but it may give, um,
investors an edge in that regard. (···1.3s) R e o is real estate owned by the bank. We
talked about that. Or bank owned (···0.9s) and a short sale. So that's where we talked
about $150,000 (···1.4s) was owed. The property value is a hundred.
We buy the property for 80. (···0.7s) So we are shorting the note is why it's called a
short sale. So we're shorting the amount that is owed to the lender, (···0.6s) so
effectively they're forgiving or trying to collect by other means. (···4.0s) Is this a good
stopping point, Bradley? (···2.5s) Yeah, I think, uh, we're about 30 minutes in, so let's
come back and then we'll go live online and we'll check out some of these different sites
to start talking about our foreclosure laws.
(···0.6s) Perfect. See you in a minute. (···2.5s)
(···3.1s) Welcome back everybody. I had mentioned to you that in addition to the
standard real estate things that you need to know specifically as it relates to
foreclosures, there are foreclosure laws that apply. They are typically, they differ from
state to state. And I'm gonna show you some of those examples. But it is absolutely
important that you are aware of how you must conduct yourself as it relates to people
distressed homeowners.
They're often called that are, um, that you're conducting yourself a appropriately. And
one of the reasons, well, I think this is why they created these foreclosure laws, is that
homeowners were getting misled by other investors. (···1.3s) Excuse me. So an
investor might have said, (···0.6s) oh, you know what? I love your house and I, (···0.6s)
I would love to raise my children here. And you know, this seems like such a great
neighborhood.
Well then the investor bought the property, fixed it up and sold it. And so one of the
things that you typically need to disclose is that you are an investor (···0.6s) and that
you expect to make a profit. Um, so that's one of the biggies is that typically you will
have to disclose to a homeowner that you are an investor, that you're not buying the
property to live in it and raise your family. So that's one of the biggies. The other thing is
that investors would say, oh, sign here. I promise I can help you.
I, I guarantee I can fix this for you. (···0.6s) You can't guarantee, because when you're
also dealing with the bank, you can't guarantee how the bank is going to react or
behave or what their rules are, et cetera. So you don't wanna promise or guarantee, and
then you also don't want to charge for your services. So those are some of the biggies
that are kind of, um, standard across the board. But the biggie I would say is really that
you do want to disclose that you're an investor. I mentored a student one time and they
had a friend and she had taken my class and forgot this part, (···0.5s) but she had
charged a homeowner for helping her with her short sale, which (···1.1s) I don't think
there's any state that will allow that.
So you don't want to go that realm. Of course, I'm not an attorney, (···1.5s) but how
could you find out about the laws? Well attorneys, right? Real estate attorneys know the
laws for sure, and they'll know occasionally it may be slightly different within the county,
but generally speaking it's going to be state laws and the attorneys are absolutely going
to know that piece of it.
So if you wanna get it directly from the horse's mouth, I would absolutely get it from an
attorney. (···0.7s) Sometimes too, if you're interviewing an attorney, you can pose it by
saying, if I were to do an owner financing for a homeowner, how would I, if they didn't
pay me, how would I go about getting my money back? Okay, so that's basically the
foreclosure process.
And so they could explain it to you in those terms, or you could say that you do wanna
work with homeowners who are distressed and there might be disclosures, et cetera.
(···0.6s) So attorneys number one, I'd rather you not have to pay for their time for that.
But also at the Rio, the Real Estate Investor Association, hopefully all of you have
(···0.5s) done this research and you know, if there are any real estate investor meetings
in your area, most of you will find them. If you're in a big city, you'll find several of them.
But they can be a great resource of information. And what I would hope you might have
the opportunity to do, and you could even um, suggest this to Theria, is to have a
foreclosure attorney come in, real estate attorney and talk about foreclosures at Theria.
That's a great way for everyone to learn without having to pay an attorney for that
knowledge. And then basically the attorney would say, if you need an attorney while
you're working with a homeowner who's in foreclosure, (···0.5s) I can help you.
So that's kind of the business. What's in it for them? I call it with them, what's in it for
me? What, why should the attorney share that information? Well, hopefully he's going to
get clients from that. Okay, so an attorney specifically at the ria, (···0.6s) and keep in
mind, no one other than an attorney should be telling you specific laws, but people at
the RIAA might tell, tell you general processes or those types of things. (···1.1s)
Foreclosure law do.org is a website that you can check out specifically for your state.
Another one is Realty Track. That'll give you the overview for all of the states. And we're
gonna go through that with Bradley. And then there's another, um, website called Nolo. I
don't even know what that stands for, but it's basically, um, legal jargon that they share.
So Bradley, why don't we go through Realty Track? So if you were to Google Realty,
track (···0.6s) and track, there's, I didn't spell it wrong, by the way. It is track with a C.
So it's realty track and if you search for laws, uh, foreclosure laws by state.
So obviously, um, Bradley did this before so that we have the information handy.
There's no way to make that larger. Is there Bradley? (···1.5s) The students can
obviously, um, look it up themselves as we go through it, but obviously the first column
there is the state and they're in alphabetical order. (···0.6s) And I had mentioned to you
that many states have more than one way that they process foreclosure. So it could be
judicial, meaning it goes through the court process (···0.6s) or it could be non-judicial.
So you see that some states will have both, many, many more seem to have judicial at
a glance, right? (···0.6s) And then is there, the common is that (···0.7s) even though it's
both, which one is more popular? So in Alabama you see that non-judicial is more
popular than the judicial (···0.6s) and the process period. So it's generally speaking,
how long will the foreclosure process take?
(···0.6s) This is just a suggestion. (···0.9s) So if any of you have been to Naples, Italy, I
refer to their stop signs and their stoplights as mere suggestions because no one seems
to pay attention to them. So this is a mere suggestion of how long the process basically,
it's generally more of a minimum that it'll take. (···0.5s) I actually spoke to a homeowner
and if I had not spoken to them, I won't, don't wanna say that I wouldn't have believed
my student, but I probably wouldn't have believed my student (···1.3s) nine years.
He had not paid his mortgage (···0.8s) nine years. I don't see under here for a process
period anywhere that says nine years, even in New York, it is saying now that the
process time is 400 plus days for New York. But basically (···0.7s) that gentleman was
working the system. (···0.5s) And so (···0.7s) not only had he paid an attorney, he then
ended up filing bankruptcy. And so my student had had my class and so she was
marketing to um, foreclosure people in foreclosure and then I mentored her.
And so he had replied to her marketing (···0.6s) and she said she didn't understand the
whole process because he was scheduled for auction like in February or March (···0.6s)
and it got canceled or postponed and that happens. (···0.7s) And then it was
rescheduled for June or July. And she said she didn't understand why it got postponed.
And my guess was that he had filed bankruptcy, which will stall the process, which is
exactly what happened.
But then the lender files to have it removed from the bankruptcy case so they can
proceed with the foreclosure. And so that's why it was rescheduled for that June or July,
what have you. (···0.7s) I know people in Florida that after the crash five years, they had
lived in their house and the lender had not even filed paperwork to start the foreclosure.
Again, that defies logic. Why would a lender not, okay?
I don't necessarily know all those ins and outs unfortunately, but a lender may do it
within a certain process period, but when they decide they're going to do it is up to
them. (···0.7s) You know, if you guys have ever been driving for dollars and which is
one of my favorite things to do from a real estate perspective. By the way, Bradley, do
you like to drive for dollars? (···0.9s) Yeah, absolutely. You can. You learn so much,
right? There's only certain things that you could find out that way.
(···0.7s) And so driving for dollars, if you see a vacant house (···0.7s) and then you look
up to see who the owner is and it's bank owned, (···0.8s) literally when you go to the
county records, it says that Bank of America owns that property. Excuse me. So you're
wondering, well if it's bank owned, what, what are they gonna do with it? The problem is
you can't exactly call Bank of America and say, Hey, I wanna buy 1, 2, 3 Main Street.
You'd never get to the right person. But Bank of America decides when they're going to
list that property on the M l s (···0.6s) and they may have different timeframes for
different reasons.
I can tell you again, after the crash, (···0.5s) many lenders didn't put their properties on
the m l s for sale because who were they competing against themselves? Because
there were so many foreclosures, right? So they were only hurting themselves in the
market. I have thought about that too. If I ever decide to sell all my properties, I'm not
gonna do it all at the same time because who am I (···0.5s) competing against myself,
right?
So I wouldn't wanna sell all of them at once. I once had seven properties on one street.
Can you, that's really competing against yourself, right? (···0.9s) So the process period
is a mere suggestion. It doesn't mean it's going to take that long. Texas, can you scroll
down a little bit? Bradley usually Texas and I think Rhode Island are two states where
it's really quick. So Texas is 27 states. Oh, look at you with your fanciness. Very good.
So 27 days.
I know Texas is one of the quicker states and Rhode Island, there it is. 62. I know those
two stand out. There's another one though. Missouri is 60, (···0.5s) New Hampshire is
59, Washington, DC Virginia. So those are some of the quicker states. Texas is kind of
the one that, um, everybody talks about being the quickest process. But again, that's a
mere suggestion and it will very much be lender dependent who decides, you know,
how quickly they go through the process will be the lender.
(···0.5s) So, (···1.6s) you know, a lender may have their standard that after 120 days
we're going to file and start the foreclosure process, but others may say six months, you
know, depending on state law and then also depending on what it is exactly that the
lender wants to do. So that's the typical timeframe there. And what's the next column at
the top, Bradley? (···1.7s) The next one is publish the sale.
So the sale, I'm actually gonna show you how to find what Bradley and I are gonna
show you how to find where the auctions are held and those have to get published in
the newspaper. And so that's going to be, um, an interesting tool for you hopefully. And
it'll tell you how many times typically or how much in advance that the sale notice needs
to be published. And so you see there that some it's as high as 90 days. Do you see
anything higher than 90?
I don't 120 Indiana. (···3.8s) That's it. I think that's the longest one. Okay, so how long
does the sale have to be published? I will tell you that in Connecticut, what's their
timeframe? (···1.3s) There isn't one. Huh? So you know what? They don't publish it. Let
me tell you about Connecticut. (···1.3s) I've mentored there more than once (···0.7s)
and (···1.2s) their sales, their auctions are held on Saturdays and an attorney conducts
the auction and it's held at the property.
(···0.8s) So (···1.2s) I'm not exaggerating. I had a student check it one time. (···0.5s)
And what they do is they post a big sign at the property. It's like the size of a sheet of
um, flip chart paper and what is that? Like two, two feet by three feet.
It's this huge sign in the front yard that announces when the sale is. So it's not
published, but it is very public. You know, think about it, it's tough enough to go through
foreclosure for these homeowners, let alone for it to be announced to the entire
neighborhood, right? (···0.6s) So my student and I had attended an auction Saturday
morning and it was at the property, it was actually a multi-unit. The tenants were still
there. They came out to, you know, see what was happening with the sale. But then
later we were driving around for dollars and we saw another property with that big sign
in the front yard announcing when the auction was being held.
So public, I, no other state is quite that bad. Occasionally they'll publish, um, or post a
notice on the front door or something like that. It generally is in the newspaper, but a lot
of people don't look in the newspaper, especially now. But that big huge sign in
Connecticut is crazy to me. Um, and then the redemptive period. So you'll see that a lot
of them, um, usually the maximum is a year, but many of your states don't have a
redemptive period, (···1.1s) excuse me.
And so with the redemptive period, you might, if your state has a redemptive period,
(···0.7s) the homeowner might stay in the house longer than the foreclosure auction
allows them to because of that redemptive, right? And we'll talk about that a little bit
more, but is there a redemptive period? Generally the max is going to be 365 days, so a
max of a year.
(···0.9s) And then what type of sale is it? So is it a trustee sale? Those that have deeds
of trust, it often is called a trustee sale. If you look at Connecticut there, it goes through
the court. Um, Delaware is a sheriff sale is Illinois, New Jersey also have sheriff's sales,
believe it or not, in New Jersey, or excuse me, in Chicago. They have three foreclosure
sales a day in Cook County, um, which is in Chicago.
So you'll see that it goes through the court. They'll call it a sheriff sale or trustee sale.
Generally, we kind of refer to them (···0.5s) as foreclosure auctions. (···0.6s) And when
we're looking through the records, other than Connecticut, and I don't know every state,
I've not been to an auction, nor am I familiar with every state's process. But other than
Connecticut that I'm aware of, you typically will attend the foreclosure auctions Monday
to Friday. They're generally during held during business hours.
So if you see that there is an auction being held on a Saturday other than Connecticut, it
might not be (···0.7s) the foreclosure process. Auction, which is what we're talking
about. It may be another type of auction, which we'll talk about. But generally speaking,
these auctions are going to be held Monday through Friday and typically to, they're
going to be held at the courthouse, although not always, but they'll go through the court,
they're called trustee sales (···0.6s) or they're called foreclosure auctions or sheriff
sales.
Sometimes the sheriff sales are actually held at the sheriff's office. Um, so they're held,
held in different places, but that's a general way of how the process is for the different
states. So I want you to see how it does vary by state. And then Bradley, if you'll please
go to (···0.6s) Nolo, N (···1.4s) O L O, which also when you're Googling it, um, students,
it's going to be, um, Nolo, n o l (···0.7s) foreclosure laws by state also.
And I think if you scroll down, Bradley, do we have an option for, there we go. So you
can actually click on the states. You had clicked on Pennsylvania before. You can do
that again. (···10.4s) And so here it tells you, um, (···4.4s) That you'll get the preforeclosure
notices, right?
And that it's public. It says in a foreclosure, you'll get the right to that loss mitigation,
which is basically a workout with the lender participating in a foreclosure conciliation. So
you have the opportunity to try to work with the lender, (···0.8s) get the notice of
foreclosure, receive special protection if you're in the military, get current on the overdue
amounts to stop the sale.
What happens with foreclosures is that once a homeowner gets X amount behind, and
that's depending on how long the lender sets their parameters, but they may say after,
let's say six months that you can't pay just one month and then remain constantly six
months behind. At some point they're going to say, stop. (···0.5s)You have to pay
everything that is owed in order to stop the foreclosure. So somebody might be two or
three months behind and then they could make a monthly payment and the foreclosure
would just continue to get stalled.
But at some point, usually based on a length of time, the lender's going to say, uh, you
owe us everything in order to stop it. You can't continually stay behind, okay? But this'll
tell you exactly how it works for your particular state. And so I would recommend
checking for your state on each of these, um, little guides here. So what else does it say
there, Bradley?
What is pre foreclosure, right? We said basically when anybody misses a payment, um,
fees and then servicing laws and foreclosure protection. So all of that is specific as it
relates to Pennsylvania. (···0.5s) Why don't you go to Illinois? Actually, let's go to, yeah,
let's go to Illinois. (···0.7s) So look, when can foreclosure start? This is pretty detailed.
There was a lot of information there. (···2.1s) Illinois, what do we have in Illinois?
(···1.3s) Summary of Illinois foreclosure laws. (···0.9s) And then you see there's other
tabs there too. Laws and procedures. (···3.7s) The most common type is Judi, um, type
(···0.8s) judicial or non-judicial. So the most common is both. (···0.6s) How much time
you have to respond, your rights and protections, what happens afterwards. That's the
deficiency judgment. We talked about that, right? (···0.8s) And so then, yeah, the
bottom line there, it says, check into the Illinois foreclosure laws and procedures.
So that'll be, go ahead and click on that. Let's see what that says. That'll be more
detailed information for you as well. (···3.1s) Here we go again. So receive a preforeclosure
notice, apply for loss mitigation, which is to work out the loan. Um,
participate in mediation, get notice, and a chance to respond in court military protection.
The same. Um, pay off the loan, redeem the property after sale.
We talked about they may have redemptive rights, right? (···0.6s) And then get any
money after a foreclosure sale. We'll actually talk about that. (···0.7s) So there's a lot of
specific information as it relates to your state. So I would suggest all three of those
sites. And the last one, Bradley, is foreclosure law.org. We'll compare that one (···3.4s)
foreclosure law.org. Very good. Let's click on New Jersey for that one.
(···0.8s) So at the, you can either click on the state or I say if you're geographically
challenged, you can click on the names at the bottom, (···0.7s) not referring that you
were Bradley. (···2.3s) So here we talk about for New Jersey judicial foreclosure, um,
they don't have non judicials, meaning they all go through the court system. They have
a mortgage. The timeline is normally 90 days. They have a right of redemption, and they
also allow for that deficiency judgment.
So like in California, the lender cannot go after the homeowner for that amount of
deficiency. In New Jersey, they can. (···1.0s) So judicial, it says that it goes through the
court process. And then it also says there's, um, more information on New Jersey
foreclosure laws. So I would suggest it truly can vary greatly by state. I mentioned that
(···1.7s) mostly it's state law, but like in Louisiana, Louisiana doesn't have, um,
counties, they have what they call parishes, which is the same thing as a county.
But you know, the rest of the United States is primarily on old English law. But Louisiana
is old French law. So they have parishes instead of counties. And believe it or not, each
parish is conducted like it's its own state. So literally it will vary from one county to the
other. Just like California is different from New Jersey. So literally the counties are
different. Um, so the parishes are different in each parish in New Orleans, or excuse
me, in Louisiana.
Otherwise, like I said, it's primarily gonna be state law. (···0.7s) Okay? (···0.7s) That
gives you an idea. Very important that you research that if you have the opportunity to
speak to an attorney, again, I don't want you to have to pay to get that knowledge. Make
sure though that you are gathering information from a reliable source. So I was at a
foreclosure auction one time. It was in, um, where was I? Ohio. (···0.7s) And the auction
was held in a courtroom (···0.6s) and my student was so intimidated.
And so when I, when we go to the auction together, I'm gonna do the talking, right? I'm
gonna, you know, try to talk to the other investors or what have you. And so we were
sitting, it was kind of like a pew but a row, you know, it wasn't a chair, it was a wooden
pew. We were sitting next to each other and there was a gentleman in front of us who
kind of turned around, you know, and started talking to us. And I said, do you mind if I
ask you a couple questions?
(···0.6s) And I (···0.6s) was, you know, just trying to find out some insight, insight
information on how exactly it would work in that location. And as I started talking to him,
I could feel my student kind of retreating. She was getting like very intimidated by him.
(···0.6s) And I didn't wanna say that he was full of it, but he was (···0.8s) like sharing the
knowledge almost to make himself (···0.8s) seem kind of like a know-it-all. (···0.6s) And,
but my student was getting very intimidated by it and I could just feel it.
And I said, do you mind if ask you a question? How many properties have you bought
here? And he said, oh no, I haven't bid on anything yet. And I could just tell that he was
all talk. And here my student was getting intimidated by him, but I knew that he didn't
necessarily, he may have known what was going on, but they're not always quite so
chatty and quite so helpful. I think this was part of his social hour quite honestly. And
you know, you can go a couple of times. I do recommend that you go, but you certainly,
um, don't have to go every week if you're not gonna be bidding, right?
You just wanna go periodically. But, um, anyway, so that was one of the experiences
that I had at an auction in Ohio. Okay, what do we have next, Bradley? I think think we
have the foreclosure process. (···1.6s) We can go through this, right? (···1.5s) Okay,
good. So the foreclosure process, here's the way it works. (···1.7s) We now know a new
word which is pre foreclosure instead of just, they're not just in foreclosure now, it's at
what stage, right?
So pre-foreclosure, basically when somebody is (···0.6s) behind on their mortgage,
they're technically in pre-foreclosure. And that's what it's called. Now (···1.6s) we'll talk
about marketing and how you can find out. Um, when you hear about a homeowner
who is behind on their mortgage, how do you learn about that? We'll talk about that in
how to find foreclosures, which will be next. But when somebody's behind on a pre, in a
pre foreclosure, (···0.8s) once we're made aware of it, we can start marketing to that
person (···0.9s) and basically the homeowner is behind.
Okay? (···0.7s) And so if they don't make their mortgage payment, the lender's going to
send them a letter that says something along the lines of, I'm sorry, this must have been

an oversight on your part. However, we didn't receive your mortgage payment LA last
month. And they'll attach a fee, a late payment fee or something. (···0.5s) And so then if
they don't pay that, the letters start getting more frequent and more harsh, and then the
phone starts ringing.
And then at some point in time, the (···0.8s) lender is going to take action against the
homeowner. That's when it becomes public. (···0.6s) Prior to that, how do we know that
a homeowner isn't (···0.8s) current on their mortgage? We'll talk about that in, um, the
marketing piece, but in pre-foreclosure it becomes public. Once (···0.8s) the lender
takes action against the homeowner, is that going to be 90 days, 120 days, (···0.6s) 365
days?
It's whenever the lender decides, right? (···0.6s) So they are technically in pre
foreclosure, is the house listed? (···0.6s) Could be. Doesn't have to be. (···0.5s) Is it for
sale by owner? Could be. Doesn't have to be. (···0.7s)Do they have equity? (···0.6s) Is
it worth a hundred and they owe 40,000? Excuse me. Is it upside down on value, which
would be a short sale?
So they owe one 50 and it's worth a hundred, okay? (···1.5s) It may not be listed, it may
not be a for sale by owner. They may have equity, they may not have equity, (···0.6s)
but (···1.3s) they may respond to us from marketing (···0.6s) and that that's how we find
them. So sometimes they're listed, sometimes they're not. (···0.7s) Could be for sale
that the homeowner has taken, you know, proactive action and trying to sell the house
on their own. It can be at many different scenarios, but they are all technically in preforeclosure.
Okay? (···0.5s) Now I mentioned the lender will file paperwork to start the foreclosure
process if the homeowner doesn't contact the lender and try to work something out, if
they don't contact an attorney to file bankruptcy to stall the process, what have you,
then at some point the lender is going to move forward and take the property to auction,
schedule it for auction. Generally they are in, um, public buildings.
I said, you know, it could also be at the house, Massachusetts, it's at the house also,
(···0.5s) most of the time it's gonna be at the county office, although not always.
(···0.5s) I'll talk about how you can find out where they're held. So (···0.8s) if the
homeowner doesn't work out something with the lender, they're going to have an
attorney, um, process it and it gets scheduled for sale at foreclosure auction. (···0.6s)
So at foreclosure auction, generally the minimum bid is what is owed on the property in
Ohio, it's based on the assessed value, but generally speaking, it's going to be what is
owed on the property is where they start the bidding.
(···0.5s) And so at the auction, you're going to have investors like Bradley and either
Bradley buys (···22.3s) an r e o or real estate owned by the bank.
(···0.8s) Now the other piece to that too is that if there is a redemptive, right? (···0.8s)
So if a homeowner has a redemptive, right, the (···1.2s) lender will typically take that
property back (···0.8s) and they don't list it on the r e o, excuse me, list it on the m l Ss
as in r e o (···0.8s) until (···1.8s) the homeowner's redemptive right?
Has expired. So you saw in Alabama, I think they have one year, which is 365 days.
(···0.6s) You can see that the homeowner gets to stay in that property a whole nother
year before the lender's even going to list that on the M l Ss and try to get rid of it.
(···0.7s) And you know, you might think why on earth would they let the homeowner
stay there?
Well, sometimes it's better than a vacant property, right? And so if the utilities were
remaining on, there's less risk for vandalism, right? Or breaking into a property, I can
assure you. And vacant houses, you know, if if it's been broken into nothing good is
happening there, right? And just like when we're driving, we, we can tell that a property
is vacant. Other people know that property is vacant also. So sometimes it is in the
lender's best, um, interest for them to keep the homeowner in the property. (···1.9s)
How long does all of this take?
(···0.8s) Your guess, is as good as mine? Right? Um, it'll largely depend on the process
for your state. That's the quickest that lenders can pursue the foreclosure process
against a homeowner. However, it's still going to be lender dependent and what they're
gonna move at their speed. Um, you know, but again, (···0.6s) it's largely gonna be due
to volume too. How quickly can things be processed? So in Florida it's the judicial
(···0.6s) process going through the court.
How quickly can that lender get a court date and be able to pass things through quickly
enough? So generally speaking, the judicial process does take a little bit longer.
(···0.9s) And the, um, non non-judicial, which are generally trustee sales, you have a
little bit more of a timeframe that they can go quicker, but judicial generally takes longer.
So pre-foreclosure, they're behind on their mortgage. Is it listed, is it not?
Is it for sale by owner? Is it not? Do they have equity? Do they have no equity? (···0.7s)
Did they respond to our marketing? And that's how we learned about it. Um, so that's
going to be pre-foreclosure. The lender will at some point take action against them.
That's when it becomes public. (···1.0s) If the homeowner doesn't fix it by working
something out with the lender or selling it on their own, doing something, (···0.6s) then it
will go to auction. Either Bradley or investor buys it or the lender takes it back.
(···0.8s) If there are no redemptive rights, they'll list it on the r e o when it's up to the
lender. Right? If there are redemptive rights, then you're going to see that the property
typically does not get listed (···0.7s) until the redemptive rights have expired, and that's
when it gets put on the auction or on the m l s. (···0.9s) Okay. (···0.5s) I think we're
good there, Bradley. And when we come back we'll talk about finding foreclosures and
also finding the auctions.
(···0.8s) We good? (···0.8s) Perfect. (···2.1s)
(···3.0s) Welcome back everybody. We're gonna get into finding foreclosures and
finding the auctions. (···0.7s) So I talked about through the process, at some point in
time, the (···0.7s) lender or an attorney on behalf of the lender is going to take formal
action (···1.2s) to proceed and foreclose on that homeowner. That's when the
foreclosure becomes public, okay? And so our second bullet under foreclosure legal
notices how we can find them.
But prior to that notice being filed, how are we going to find somebody who is in preforeclosure?
(···0.9s) Well, the answer is marketing. (···0.8s) If you were to have signs,
we call them bandit signs. If you were to have bandit signs up that said behind on
payments or facing foreclosure call today and your phone number, it's marketing to get
those people to come to you. (···0.5s) Or if you were to look through other ways of
finding deals.
So let's say that Bradley and I were driving for dollars and we see, you know, this is a
kind of working class neighborhood houses are, you know, fairly well maintained, and
then all of a sudden we see this house that you can tell is the ugliest one on the block,
the ugly duckling. Well, that might be that they can't afford to keep up their house or
they know they're going to lose it because of foreclosure, so they're not maintaining it.
So it is some type of marketing effort, whether signs and the homeowner comes to you
or you do some other marketing, um, tactic to send to them that they're going to contact
you from that.
So (···0.6s) prior to the notice being filed, that's when it becomes public. It's important to
know that there are other ways of marketing for that homeowner to come to you. Okay?
(···0.8s) When the legal notice gets filed or posted or however it happens, (···0.5s) you
need to understand that you have competition in that arena.
So if Bradley and I are driving for dollars today, chances are there aren't, you know, a
hundred other people that are driving for dollars in that same neighborhood today,
okay? However, with foreclosures, once that notice gets filed, you aren't the only one
who knows about it. And so when that notice gets filed, it becomes public and
everybody else knows about it. So it's really important as it relates to foreclosures that
you (···0.7s) have a timely response.
(···0.5s) And that's because if you wait three weeks, well they might have already gotten
letters or they might have already, you know, had people try to call them or something
along those lines. So more so than in other strategies. When a public notice (···1.9s)
alerts people to a foreclosure case, then it's important for you to understand that you
need to move quickly through that.
The same would apply like in probate. Once a case gets filed and a case gets started,
there's more competition. So I need you to understand that you do have to act quickly
and it's better to do it. Be one of the first ones to get a jump on things, okay? If it's a
month or two later, they've already gotten a lot of information from people and that's,
you're just gonna get caught up in the masses. Okay? So prior to the notice being fi
being filed, you're going to have to take some sort of action signs driving, you know, it
could be that you market to people who are getting divorced because you know,
nowadays there's two incomes and they that might necessitate a sale.
So before they, you know, get into trouble with payments, (···0.8s) you know, then they
end up in foreclosure. It's just different types of marketing. Okay? (···0.7s) So once a
legal notice gets filed, you can see it typically in a newspaper (···1.8s) or it may be
posted at the courthouse. I'll see this a lot at the courthouse, like in um, Washington
State.
They have big fat binder clips and it's (···0.5s) the numbers one through 31 up on the
side entrance. When you walk into one of the counties, that's actually when the auctions
are being held, but it's the paperwork that gets posted there, so you get to see it. So the
filings are generally going to be at the county (···1.0s) and they will often get published
in the newspaper. (···0.6s) And sometimes the sales will obviously get posted in the
newspaper as well.
If you are looking, let's say that you're in Miami and you decide to look up, so legal
notices or public notices, usually it's legal notices are published prior to the classifieds.
So number one, not many people get the newspaper other than my 91 year old mother,
right? But the legal notices are the part that you've never looked at before. So it wasn't
classified, it wasn't jobs, it wasn't cars, it was the section that we never even considered
looking at. But let's say that you pick up the Miami Herald and you look at Thursday's
newspaper and you say, Catherine was wrong.
Nothing's posted here about foreclosure auctions. (···0.5s) Well, (···0.6s) it could be that
it's a different day. Maybe they only get posted on Tuesdays, (···0.6s) or it could be a
different note, a newspaper. So if it's a large enough city, then it could be posted in a
legal newspaper. And usually those are much more expensive, by the way, than the
general, um, public newspaper. But if you can't find it in the newspaper, it may be that
there is a legal newspaper that they're published in.
But I'll, um, Riley and I are gonna show you ways that you can look up, um, how to find
those auctions as well. But the legal notices often will get published or they're posted.
(···0.7s) You also can search the county records for those particular notices that have
gotten filed. Again, keeping in mind that the dates are important, you wanna make sure
that you're one of the first people that will have contact with that homeowner. (···1.7s)
How else can you find them?
Okay, title companies or closing attorneys, whichever one it is that you use in your area.
They obviously look at a lot of different property records. So they could search for Liz
Pendens, (···0.5s) that's the litigation pending that gets filed against real property or the
notice of default, right? They could search records for you and give you a list they used
to give you, um, labels and such. Now it's more of a spreadsheet that they would share
with you.
(···0.6s) What if you wanted to target people that had hadn't paid their property taxes?
You might say, well those people, if they can't afford their taxes, they might not be able
to afford their mortgage. So maybe I wanna market to those people. Well, they might be
able to search the records for you of who hasn't paid their property taxes, they're behind
on their taxes, (···0.6s) they could search for other liens. Are there properties that have i
r s liens (···0.5s) or it could be a mechanics lien, possibly even child support.
So other types of liens (···0.5s) and then property information. So let's say that (···1.1s)
we have a market correction (···1.0s) and you want to work short sales. (···0.6s) And so
you ask a title company to search, you search for you properties that have two
mortgages. (···0.6s) So if we've had a market correction and some of the prices are
down, the likelihood of somebody having two mortgages and being upside down on
value would be greater than if they just had one mortgage.
So you might ask the title company or closing attorney to (···0.6s) search records based
on some particular criteria as it relates to the property. So could be two loans, could be
other liens, something along those lines. But they have access to those records (···1.1s)
brokers. There's three types of brokers that might be able to also help you find
foreclosures. So the first one is a real estate broker.
Could be a real estate agent, but let's say that a homeowner knows that they can't
afford their mortgage and they might be proactive. And so they might contact a real
estate agent to list their property because they know they have to sell since they can't
afford to stay there any longer. (···0.6s) So a real estate agent might be able to share
that information with you. (···0.6s) Mortgage brokers, if a homeowner couldn't afford
their mortgage, they might contact the mortgage broker to refinance, right? (···0.6s) And
so the problem is, if they can't afford their mortgage and they call the mortgage broker,
(···0.8s) it's already too late.
Because if they don't have income or there's some sort of issue, they're not going to be
able to refinance with another company. They might be able to refinance or change the
terms of their current loan, (···0.7s) but a mortgage broker might know that somebody is
facing foreclosure. (···0.5s) And then insurance people, insurance agencies, if
somebody isn't paying their insurance, I want their homeowner's insurance.
I once, um, forgot (···0.7s) in the beginning when I started, (···0.8s) I was crazy kind of
still a little crazy, but (···0.7s) I didn't always escrow all of my payments. So normally,
you know, when you make your mortgage payment, it's principal interest, taxes, and
insurance, all of those get escrowed for you. Well, sometimes on investment loans you
have the option to pay it yourself or to have it escrowed.
And so when I started I said, oh, I'll just pay it, you know, it would be easier. I'll get, you
know, credit card points or whatever, you know, and you have to pay the year's
insurance upfront anyway, so I just kind of said, well, I'm paying it upfront, I don't need
to escrow for it. Well, that becomes very cumbersome because with your homeowner's
insurance, they send you letters that'll say (···0.5s) it's coming due in 60 days, then it's
30 days and you're gonna be canceled and then a reinstatement because they receive
payment.
The other thing about insurance is it didn't always have the property address. It would
have my policy number. So I had to look up which property it was. It was a nightmare.
Anyway, I made a mistake and I missed paying my insurance. And my insurance
company called me to tell me that my insurance had lapsed. Fortunately I had a good
relationship with them and they went to bat for me and they reinstated because if you
have a gap in insurance, your rates go up. (···0.7s) So they were able to say that it was
my fault and um, it wouldn't happen again.
But they negotiated on my behalf to be able to reinstate my insurance without, um, any
sort of penalty. So insurance companies are notified when insurance isn't paid, is the
moral of that story. (···1.2s) Online county information. Bradley and I are gonna show
you how to look up on Netra online. We're not gonna do it yet, but we're gonna show
you how to access information from the counties so that you can gather this information
as it relates to foreclosures.
So years ago (···0.8s) there was a mandate, I forget what year it was, where most of the
counties were supposed to be online, but let me tell you, that is such an expensive
process for a company that is, you know, a county that is not online for them to have to
convert everything. It takes a lot of time, but it's extremely expensive. And so I've only
ever been to two places and it was within the last 10 years probably. One was in
Western Pennsylvania, Bradley Bradley's from Pennsylvania, Western Pennsylvania,
and I forget now (···0.8s)if it was Pittsburgh, I think it was outside of Pittsburgh, but they
did not have the information online.
And then it was in West Virginia was another, um, place where they did not have the
information online. (···0.6s) So it used to be that (···1.1s) if you went to the county, you
could see the information. Those counties that I'm talking about literally had information
on cards and books. It wasn't online in any, um, capacity.
Nowadays, you're going to be able from the comfort of your home to be able to look up
a lot of these records. And sometimes you may be able to look up a record and see that
a Liz Penance has been filed (···0.8s) a notice of foreclosure, but you might not be able
to see that document. Well, I can tell you in my county, if you open an account and
register, boom, all of a sudden you can see the actual documents. So (···0.5s) if you go
in just as a guest, you might not be able to access that information.
So don't say, oh, my county doesn't have it. You have to go into the county check
because you might be able to access it. Some counties too are charging you either an
annual fee or a monthly fee, something like that. I would tell you that more are free than
used to be. However, you are gonna have to pay and if you have to pay, you have to
pay. It's not gonna be 500 a month, it'll be more like 25 or $50 a month, something
along those lines. (···1.6s) But you if at all possible want to be able to access that data
online without having to go into the county.
Now, (···0.9s) if your county is not online and you have to go into the county office to be
able to research that paperwork, it's a good and bad news type thing. The good news is
you're gonna have less competition because not everyone has the time to be able to go
do that, right? That they don't have the time to be able to go to the county. The bad
news is you have to go to the county and it takes more time.
So it's a good news, bad news type of situation. However, I believe most of you will find
that you are able to access that information online. (···0.5s) And again, you wanna
make sure that you're one of the first because the easier access it is, the more
important it is that you get your marketing to them sooner rather than later. Okay? So
we'll tell you how to find that. Um, county information if you don't already know. (···0.6s)
And then when you're finding foreclosures, there are third party companies out there
that will put data together for you.
So there used to be somebody in Florida, I don't remember his name, um, but at the
Fort Lauderdale (···0.7s) foreclosure auction, he used to wear a red shirt with white
lettering. And one of the first times that I went to the auction there, you know, if you see
that people have information. So if you're walking around (···0.9s) and everybody kind
of has, you know, something similar in their hands, now be careful leaning over
somebody's shoulder at a foreclosure auction.
But if you can kind of tell, you know what, Bradley has something with that spiral binder.
Oh, Sally over there, she has something that looks similar. You can by all means ask
them and say, Hey Bradley, do you mind if I ask or we wouldn't say your name. Excuse
me, sir, would you mind, do you mind if I ask where you got that information? Oh yeah,
Harry, over there in the red shirt with the, the white lettering. He provides all this
information for all of us (···0.5s) and you have to pay for it. But it's all put together for
you. Keep in mind too, whenever you get that information, everyone else is getting it at
the same time.
(···0.8s) So the last time I saw that was in Long Island (···0.6s) and why I remember
this, I don't know, but the gentleman that I asked told me that the website was li for Long
Island profiles.com. And he showed it to me and he said, it's the source that everybody
uses. So it probably was a monthly subscription. (···0.7s) So there are third party
companies, usually they're present at the auction. (···0.6s) The best ones I've ever seen
were in Washington State (···0.6s) and there's this third party company.
They do it for many of the counties. And so in Washington State, in each county, the
auctions are held Friday morning (···0.7s) and there are two auction companies that
show up to the auction (···0.7s) in Washington State. And they put together all of this
data. They give you comparable sales information. If the property's ever been listed,
they'll show you pictures. Anything that they, any information on that property that they
can provide you, they will do that.
Well, this I think is the coolest thing ever. And if I mentor again in Washington State, I
would actually try to attend this. (···0.7s) I mentioned that the auctions are held Friday
morning. (···0.5s) This company that provides all of this data (···0.6s) has Thursday
evening meetings on what properties are going for sale up for auction on Friday
morning. And they evaluate all of them and try to determine what people's, you know,
highest offer should be.
If you can't attend the auction, they'll attend and bid on your behalf. It's the most
comprehensive third party company for foreclosures that I've ever seen. Typically, it's
just the data, but they literally are trying to educate people. I don't know their payment
system. If you get a deal and they bid on your behalf, I don't know exactly how it works.
Um, they might even have hard money access, you know, that they're a full service
provider. Anyway, that's the best one that I've ever seen.
In, um, Orlando, Florida, there used to be a company, and I don't remember the name
of that company either, but I remembered the initials, which was i r s. And so there was
a third party company that also used to gather that data. So typically if you attend the
auction, (···0.5s) they, if, if there's a third party company, they actually will often be at
the auction. You know, obviously trying to get additional subscribers to their service. So
you can get it from third party companies. They're also websites. Um, we're not gonna
go to them specifically, but foreclosures.com or foreclosures daily.com Realty track.
Sometimes people will even go to Zillow. Um, you know, there are different websites
that you can go to. I will tell you (···0.7s) ask, if you go to the auction, ask how you can
get the data on those properties, because sometimes the county may even produce it or
you might find that there's a particular website, like in Long Island, you know, it was Ally
profiles. So there might be (···1.1s) websites that are better for particular areas.
So if you say, oh, Zillow's good in my area, Bradley might say, oh, it's, it's not very
reliable in my area as it relates to foreclosures. So oftentimes regionally or by certain
areas, there'll be a website that is preferred over others. (···2.0s) Another thing that
we're going to show you is Prop Stream, which is an online tool. Bradley, how would
you describe your on mute, by the way? How would you describe Prop Stream (···1.0s)
to a student (···1.2s) soft Software?
The the cool thing with Prop Stream is it's a (···0.6s) just a place that in my opinion,
brings together a lot of data. It's a good way of putting it. And what I like about Prop
Stream is, is really that, uh, again, this is something that you, you're gonna have to pay
a fee for. Uh, however, it's collapsing timeframes. And so, you know, (···0.7s) as new
investors out there, we want to give you ways to do this business without spending a
boatload of money.
We also want to give you ways to do this business at a higher level. And as you start to
do more deals than spending money to, to increase your deals is obviously gonna make
more sense. So, uh, but yeah, prop Stream is a, is a great resource and it just brings
together a lot of county data, uh, websites. Uh, so you could look up properties in
Florida, but it's also gonna give you the, the tax information it's gonna give you, uh, if
there was a mortgage recorded, it's gonna tell you when that mortgage rec is, was
recorded.
And then it's also gonna have a, an estimated, uh, payoff 'cause that is still recorded on
that, that deeded there. So (···1.5s) you can find the owners then of the properties, their
mailing address, uh, that sort of thing. 'cause a lot of times we will see, particularly in
Florida, uh, out-of-state owners. So, uh, we may look at properties that are here. We
wanna make offers on 'em, but we need to be sending our mailers or our advertising
whatever, to uh, where the homeowner lives up north.
So they may have a, a permanent residence up there. They use something in Florida as
a secondary residence. But again, that prop stream will, will show you all that different
information and we'll go into that here shortly Yep. And kind of show that as well. But
that's a good way of saying it, is it gathers data from all different places and puts it
there. So I'm not gonna tell you that you can't get the same information elsewhere, but it
is kind of all put together for you. And so (···0.6s) mostly they're getting their data from
the counties.
So it's the same data, but they also are adding other pieces in or something along those
lines. I would, you know, tell you just to confirm it with your particular area. And one
thing when we get into it, the mortgage data I found isn't always a hundred percent
accurate, but it is what they have access to. So it's not that the prop stream, oh, prop
stream's data is wrong. No, they're getting it from a resource like the county. So it's the
data in or, and the data out. So it's not a prop stream issue, it's a data issue that's
beyond their control.
I will tell you, um, and I'm sure there are other services like Prop Stream. Prop Stream is
just the one that I know the most and I've used it for a very long time. They update it
frequently. The other thing that I've encountered is I've, um, tried to research properties
before and the address wasn't there, like it didn't exist. (···0.6s) And I called prop stream
and they said, oh, if you ever, 'cause I thought I was doing something wrong. You know
what, why can't I find it? And they said, oh no, it's not actually that. Um, but if the
property isn't there, give us the address and we'll do the research and add it to the
system.
So if they can even one off get that data for you. So I've had very good luck with their
customer service as well. I'm not selling you prop stream, but I just want you to know
that I have had good experiences with it and there might be other services out there that
are similar. I also wanna point out if your county offices charge you for (···0.7s) access
to that data, you might find that prop stream is a way to go rather than the county
because maybe it's giving you more data and it's not that much more since you have to
pay anyway.
(···0.6s) So, um, we'll give you an example and walk you through prop stream a little bit.
It's kind of fun. It can do a lot of different things. So I'll show you several pieces to it.
(···0.6s) And then how do we find the auctions? So I told you you're likely not going to
be buying from the auction as one of your first foreclosures, however I really want you to
attend. You see, Bradley was interested, even though he wasn't going to bid, he
attended an auction.
So obviously attorneys will generally know, (···0.6s) realtors will often know when the
auctions are being held. (···0.6s) Trustees. So trustees are actually (···0.8s) people who
are responsible for conducting the auction on behalf of the lender. So there are trustee
companies that are basically assisting in the trust deeded and they will conduct the
auction. That's usually going to be non-judicial, where it's spelled out in the mortgage or
the deeded of trust information, how the foreclosure is going to be processed.
And a trustee generally will handle that part of the auction. (···1.7s) Oftentimes it's just
going to be a county employee or a sheriff, but occasionally there are professional
auctioneers who (···0.8s) are responsible for conducting the foreclosure auctions. So
normally when you go to an auction, they'll say, you know, property 1, 2, 3, 4, 5, 6,
opening bid of 110,000, do I have any other bids?
(···0.8s) And then Bradley will bid 110,100, somebody else 110,200. But it's just, okay, a
hundred thousand 200, do I have any more bids? It's as flat as I'm making it sound.
(···0.5s) But when it's a professional auctioneer, I have 100,000, 100 and they, they
really get into it and it's a much more energetic, but I will say intimidating process as
well. Um, so occasionally there are professional auctioneers that will auction off a
property.
And I want you to understand when we're talking about auctions, we are talking about
as part of the foreclosure process. So I'm gonna show you a website that, remember we
talked about the homeowner being behind the lender files. A notice if the homeowner
doesn't fix it or sell it on their own, it goes to auction. That's part of the foreclosure
process. (···0.5s) You may discover other auctions that are after that process, which are
r e o auctions.
(···1.4s) So one of the ways, as I mentioned, if they're held on a Saturday, that could be
a clue, but it doesn't apply in Connecticut. But typically these foreclosure auctions take
place Monday to Friday (···0.7s) and (···0.6s) usually they're going to be at the county
offices, although not always I've attended them. I mentioned to you at a, in a courtroom,
(···0.6s) even in my county, um, in like a period of just a few years, they held it in three
different places.
Used to be on the courthouse steps, then it was upstairs by where the civil, um, cases
were filed. Then it went into a courtroom. I've been to title companies. Um, the
courthouse steps is very common. I have also been in parking lots, um, attorney's
offices. Obviously I told you two at the property itself, but the county offices will often
know that the auctions are held there. Even if it goes through a trustee, it (···0.6s) still
may take place at the county office.
So even if it doesn't go through the four, um, the court system, (···0.8s) the, it's
generally held at the county office in Denver County, Colorado. There is, um, their

So let's click on that search button. Um, yep, there we go. (···1.4s) And basically this is
going to, (···14.1s) Okay, great. So Bradley, that pulled up the Cook County Legal
notices. If you'll click on that view button for me, it's like you've been there before, you
having a deja vu or something Bradley, something along those lines a little bit.
So this is basically the legal notice that gets published in the newspaper. And so rather
than searching through all the newspapers, we can search through this site. And this is
what it brought up. (···0.5s) If we look at the, what is that? The sixth line on the left hand
side, it says 10:30 AM (···1.3s) on May 25th. (···1.0s) And where's the address? The ju
Oh, same line. Judicial Sales Corporation is who's holding the auction.
And then the address right there of where the foreclosure auction is held is one South
Wacker Drive, which those of you who might know downtown Chicago, that's one of
that's literally held downtown. And so I've been to this auction many different times
(···0.5s) and all this other information you could read through, but our purpose of
looking for this is when the auction is held. And so I looked at May 25th, that's on a
Tuesday. (···0.6s) If we start looking through some of these ads and we see another
auction is May 18th, another auction is May 11th.
You're not looking to attend this specific auction to look at this property. We're trying to
figure out when the auctions are held. And so if you'll just track, (···0.5s) you know, in
this case it's a Tuesday, Tuesday, May 25th, then we see another Tuesday, May 18th,
another Tuesday the 11th. We can now calculate, oh, okay. In Cook County, the
auctions are held on Tuesdays.
If they're all over the board, you know, they may be held five days a week, they may be
held 4, 2, 1. I (···0.9s) told you in Texas it's the first Tuesday of the month. In Georgia,
it's the first Tuesday of the month. So sometimes they're on, they're held weekly. I
mentioned in Washington State, it's the, um, it's every Friday. So they're held at different
times. But you don't have to look for this specific one. Our purpose is to figure out when
the auctions are held so that you can attend. So this tells us the date, the time and
where they're held. And as I mentioned, I've been to this pro this one many times quite
honestly.
And um, my student even had to pay like 40 some dollars to park the car while we went
to look up a couple records and attended the auction. (···0.6s) And there is a woman
there who also, um, she attends the auctions in the Wacker building and she will, um,
for a fee, she'll teach you how to do title searches and she'll bid for you at the auction.
She's not exactly a third party servicer like we talked about how they'll give you all that
information, but she could be, um, you know, physically on site for you because gosh, if
you take off work and pay for parking, it's cheaper to hire somebody to go in that case.
So this is in the Wacker building. You go in, they um, you have to register, they give you
a sticker, you fly up to the 42nd floor, whatever it is, it's um, high up there. They have a
registration area. You have to give your driver's license. They tell you no cell phones.
Um, then right next to the hall, there's a door with a glass top and it's posted, no cell
phones.
There's somebody at the door that tells you no cell phones. I mean it's crazy. They're
extremely strict. I had a student that um, I was with one time and he was kind of behind
me. There wasn't a lot of seating. I was with his spouse and he was behind us and they
stopped the auction because he got out his phone to look at it. They literally stopped the
auction. Some are extremely strict, others are very lenient here. They happen to be very
strict. And so we see now that the auction is held, then we might as well look for another
one.
Bradley, let's back out of this and go to the next one that'll show us (···1.1s) the view
and let's see if we'll see a similar date. (···1.5s) So here's May 4th (···0.5s) at 1:00 PM.
Hmm. (···1.0s) It happens to be a Tuesday again. (···0.5s) Now that one is being held.
Oh, that's auto. That doesn't help us back out. (···0.8s) Glad we saw that. (···2.6s)
What's the next one? (···1.3s) Legal notice of sale.
(···1.7s) That's an auction is the third one. Let's go to the fourth one. Yeah, US bank,
that should be another foreclosure. (···3.3s) So notice is given (···0.8s) judicial sales at
10 30 on May 18th. Well, I just happened to make up that it might be on Tuesday and lo
and behold, they might be on Tuesdays. They could also be Tuesday and Thursday.
We haven't looked at enough records to determine that, but that's what I want you to do.
And um, I've gotten pretty good at being able to spot the information. Sometimes it's in
the middle of all of this verbiage or sometimes it's at the bottom. Um, at the bottom two
it does say the judicial sales corporation. If you can see conducts foreclosure sales, it
tells you the law firm, plaintiff's attorney, sales co. You might even be able to go to their
website. And I'm gonna show you, I didn't test this one so I don't wanna do it, but I'm
gonna show you on another county how you can also go to the person conducting the
auction to find out when sales are.
But this'll help you with the public notice ads. And then let's also go to California just so
that we see this goes through the court process that it's held at a different, um, building.
It's close to the county building, but it's um, not the county building. Let's go to California
please. So we'll go back to public notice ads. Bradley, we'll click on California. So see it
says that, you know, we shouldn't have the data there, but it's there.
Popular searches. Again, we'll do foreclosures. (···6.7s) And then under the county, let's
do LA County. So Los Angeles. (···4.9s) And then we're going to hit search (···1.1s) or
go. (···2.6s) And then is that the first one that came up? City News san?
Okay, let's click view. (···2.7s) And this says, I told you in California, they're called
trustee sales. So notice of trustee sale. And they generally go by number by the way.
They don't always give you the address. Um, help me. Do you see here we see time of
sale. It's actually just left. Did you find it? Now go down. Four lines. Time of sale, 12
o'clock, (···0.7s) place of sale at the North Arrowhead Avenue entrance to the county
courthouse at 3 5 1 North Arrowhead Avenue, San Bernardino.
Um, f y i, this is probably not information you need to know, but LA has seven or nine
courthouses LA County. So you have to find, make sure that you're at the right
courthouse for that particular one. But that's what we're trying to find here. So even
though it's a trustee sale that doesn't go through the county courthouse, it goes through,
um, it's a non-judicial sale. It's still held at the courthouse. Sometimes it's outside,
sometimes it's inside.
But that's how you can find, um, the additional information as to where that is held. I
don't know if I've ever been to that one, but in California, I know I've been to them and
they are held outside. Um, but not always. (···0.6s) Okay, so that's public notice ads.
Now let's say like I, we looked at Maryland (···0.5s) and there was no data. So what
would we do in a case if we are looking for something and there's no data?
Well, let's search. (···1.0s) Let's go to a (···0.9s) Google, just a Google search. (···1.6s)
And let's say for New Jersey, we couldn't find anything from our public notice ads. So
let's Google, Newark, New Jersey newspaper please. Bradley, (···5.0s) Newark, New
Jersey newspaper. Okay, let's click on the star ledger. And (···4.2s) in the upper left
hand corner in that brown, what is it, brown or gray, right?
If you click on that, (···1.2s) it's an index. And if we scroll down, we'll see legal notices.
Oh, it's after Kentucky Derby betting. So legal notices how timely, right? So legal notices
if you'll click on that, this is what we just found in public notice ads. (···0.6s) But if it's not
available, um, through public notice ads, this is another way for you to Google it and find
it.
So I don't know that that is, that's an evaluation report. Let's scroll down. Says one of 10
(···1.4s) listings, (···1.7s) public hearing. Keep going. (···2.6s) Public hearing (···1.3s)
Governor of Pennsylvania Commonwealth know what that is. (···1.1s) Keep going. We'll
see what else we see. (···1.4s) Public meeting, no (···3.9s) public hearing (···1.7s)
request (···1.2s) for pro, which I think is like a bid (···4.9s) variances.
(···2.0s) It's one of 10. Uh, page one of 2 74. So we're not gonna search all through
there, but you would be searching for either sheriff's sale or foreclosure sale in this
particular area.
(···1.0s) Sort listings by, I (···0.9s) don't know if it'll let you, but they can play with it. Um,
or even in advance search it says maybe. (···0.5s) So this is where you could find it
though, specifically (···1.4s) for that area. Go back to the, oh, does it allow, there we go.
Search by keyword. Try that. (···4.2s) Try foreclosure. It may have to be sheriff.
(···6.0s) There we go. (···5.0s) Can you scroll up? I think I saw it on the first one. There
we go. (···0.7s) So that is foreclosure of this one happens to be a tax lien. Okay? But it'll
give you the, the information that you need. (···1.1s) And the next one (···1.4s) is
(···3.7s) say what?
That's for (···0.6s) office of foreclosure. So that one is foreclosure also. Okay. So that's
another way of finding it is to go directly to the newspaper. (···1.6s) And then I (···0.7s)
also went another way. So if you'll open another window for us, Bradley, (···0.5s) and
let's look up the Washington Post (···0.7s) legal notices. And the reason that I wanted to
share this one with you is because (···1.0s) sometimes (···0.6s) in states or districts that
have, um, a trustee sale, it could be more than one trustee.
(···0.8s) And so I wanna make sure that you (···0.7s) exhaust all your resources
(···0.7s) to know that if different people are conducting the auction, that you have every
opportunity available to you. So different people may attend auction A versus auction B
by another company. It just kind of depends.
You wanna make sure that you are looking at the accurate information. So for instance,
I was in, um, mentoring student in Spokane and it was freezing. It was in January, not
this year, but another January. And we were sitting in the car because it was so cold
and she told me that she had literally gone to the auction the day be, or the week before
to make sure that um, she had the right information and she knew where to go, what
have you. And so she, we were sitting in the car, we were a few minutes early and she
said it doesn't start until 10, so we'll just sit here.
And as I was looking, I was facing the um, entrance to the county building. I said, they're
conducting the auction now. And she said, no, no, it doesn't start until 10. And I said,
trust me, I've been to enough auctions. They're conducting the auction now. So she had
only seen one piece of it and that there was another trustee that was auctioning off at
nine or nine 30, whatever time it was. And we actually made a really good contact there
at the auction. So I'm glad that we did get out of the car even though she was freezing.
Um, but you never know.
So you wanna make sure that you exhaust all your resources. So here we have one
official notices. Can we search tri foreclosures if that'll work at all? Well it is legal notices
(···1.3s) or notice type maybe. Will that, (···1.0s) do you see it further down? Yeah.
(···1.2s) Legal notice (···0.8s) we don't want. Yeah. (···0.7s) And then see if
foreclosures will work. (···4.7s) Nope.
(···2.0s) Now I had done this before. What state? (···1.7s) Oh, (···1.0s) dc. Yep. That's
maybe why. Let's see. (···7.2s) No they don't have sheriff. And you spelled it. (···0.6s)
Yeah. One R two F. (···7.0s) Let's click search, see what comes up.
(···8.7s) How come I had done this (···1.3s) here? Oh, that's probate. We don't want
that. Probate. (···0.6s) This is also how you can find probate records (···2.2s) adoption.
(···1.0s) Um, where's this? Prince William? Is (···1.6s) that a oh (···1.8s) annulment?
Nope. (···3.9s) Adoption. (···6.7s) I had seen this. Hold on. So what did I do? I (···5.0s)
had done Washington DC, (···10.8s) Washington Post legal notices.
(···2.0s) What's the website? Bradley (···1.0s) Public Notices Washington Post. That's
what I was on. (···9.3s)And this had come up right away for me before. (···2.5s) Okay,
so let's go back (···1.0s) Bradley and just Google (···0.7s) Washington post legal
notices and tell me what you get.
(···5.7s) Washington Post public or legal notices. (···2.3s) And so (···1.2s) hold on, let
me see exactly what mine said because I have it on my computer. (···7.3s) Public
notices dot Washington post.com.
(···2.1s) Public. Okay, so this should, yep. (···0.6s) Okay, so don't click anything. And
then on the right, so if we see on the third (···0.6s) one down (···1.6s) it says trustee
sale. (···0.9s) That's the second one. One more down (···1.0s) and it's 78 or 75 13
(···0.5s) cherry drive. (···1.1s) That's what the trustee sale (···1.6s) click on that.
I guess (···2.0s) This is actually for Maryland. So this'll tell us, (···1.3s) wow, principal
amount of the original mortgage was 5 78. And here it tells us that it's being held in
Howard County. May 20th, 2021 (···0.5s) at 10:00 AM (···1.3s) So that's when that
auction is held. Does it say where there it is. Right above it is Court Avenue in Elcott
City.
(···1.1s) So what I wanted to show you too, if you can scroll down on that one, (···1.2s)
does it say who's handling the auction (···3.2s) substitute trustee? That one in particular
says William Savage. Substitute trustee. So the issue is that the trustees could be
conducting, um, at different locations and at different times. So I happen to know too for
the Washington DC area.
(···0.8s) And (···0.8s) look up for me please. (···0.6s) Auctioneer Alex Cooper. (···5.5s)
You want me to just Google that or type it into No, you can Google it because this'll tell
you who the trustee is. And this is one more way for you to find out the auctions.
(···0.5s) So Google, Alex Cooper (···0.8s) auctioneer, (···1.3s) um, it's the first one
there.
(···4.4s) And go to the website please alex cooper.com (···3.2s) and it says View real
estate auctions. (···5.4s)And there you have it. It gives you the date and the time. It'll
also give you the location. So this is another way of finding them.
This is the trustee for that particular area too. There's another gentleman who's a
professional auctioneer. They're auctioning off the properties and his name is Harvey
West. But again, you'll find these trustees in the public notice that gets published. Okay.
So lots of different ways for you to be able to find the information. So you can go directly
to their website, you can go to the newspaper, you can um, go to public notice ads. You
can also find out from the county attorneys, realtors, lots of different ways for you to find
out the information that you're looking for.
So in addition to attending the auction to see how things go, I'd like you to talk to
investors. That's part of the purpose of finding out when the auctions are being held.
Any of you, if you're looking to wholesale, my number one way of finding cash buying
investors is at (···0.7s) the auction because they generally have to pay cash. So that's a
really, really great way to go.
Um, I will tell you that sometimes they're not overly friendly if they think you're their
competition. They're not overly friendly. But I kind of generally believe you give nice, you
get nice in return. So, um, I highly encourage you to attend the auctions, but that's how
you find out both about the foreclosures themselves as well as the auctions. (···1.2s)
And then I think the last thing we have (···0.7s) is to go to prop stream. (···1.1s) How
are we looking time-wise?
Do we wanna start on prop stream or do we want to, (···2.2s) how do we wanna
proceed? I (···1.7s) didn't notice our time. (···3.0s) Bradley's deciding. (···1.4s) Let's
come back. We'll just stop for a second and then we'll jump back in. That way we can
do as much as we want. So we'll, we'll just stop now with some of that auction site stuff
and we'll come back and then we'll get into the prop stream. Perfect. Seeing the flash.
(···3.0s)
\
(···2.9s) Okay, welcome back everybody. We are going to get into Prop Stream, which was that
software program that I mentioned to you that, um, you know, gathers a lot of the data from
different sources. I (···0.5s) wanna start with, um, let's go back to that address that we were doing
from nron Online. So let's go to 1357 (···1.1s) Southwest (···1.5s) one five. One way. It (···4.1s)
was in sunrise.
(···3.7s) I wonder if there's an st there. (···3.3s) So backspace and then is there st.
(···3.0s) There we go. I got (···0.6s) it. Okay. Yep. ST. (···0.6s) And prop stream's one
of the few that you actually have to add that where most of them, less is more. So
putting 1 51 is usually better.
(···0.7s) So I want to click on that property to the right for me. 1357. So that shows you,
um, usually a picture comes up. There it is. Okay, so we clicked on that particular
property. I just wanted to compare the information here relative to what I had shown you
(···0.7s) on the um, appraiser website. So at the top, it's actually an overhead picture
that doesn't help you much, but it gives you the square footage, the year built. Um, the
property type, single family, it's not listed, it's not distressed.
Distressed would basically mean a short sale or a foreclosure of some sort. There is an
H o A, it's individually owned, owner occupied. Um, occupancy is occupied va if it was
vacant, it's vacant by the post office. Just f Y I I called and asked that one day because I
didn't know how they, what their definition of vacant was. They've owned it for 32 years
and five months. They financed it.
What county? So it gives you the value and (···1.7s) until you confirm that this value is
accurate for your area, (···0.7s) then you don't wanna take that as the gospel and we'll
talk about how to determine how to get values. (···0.6s) And then the last year, oh is
that the last year value? Now if you guys remember (···0.6s) on the county website, I
said the value had actually gone down for tax purposes and I pointed that out to Bradley
and I said I knew that wasn't accurate.
Look how here it shows that the value was 4 34 (···1.2s) and now this year it's gone up.
Bradley, that's $70,000. (···0.8s) So this is why sometimes it's good to get information
from more than one source. When I showed you how the foreclosures worked in your
area, I gave you three different websites and you can compare to confirm what is
correct for your area. So the county site was clearly wrong. Um, go back up (···1.3s)
and then it's using comps to give you data, mortgage or debt information.
That was their original mortgage (···0.6s) public record. Oh, that was the land. So that
doesn't mean that's what the land is now because it was new construction, they bought,
you know, a development or what have you not on the M L Ss (···0.6s) and it will tell
you. So the estimated equity, um, again, I have found it shows you here an opportunity.
So it's the right, right where his mouse is. Perfect. (···0.6s) I found that not to be
accurate.
So just to let you know, I wouldn't take that as the gospel. You, you can use it as a
guide, but I would not take it as gospel. So now the property details over to the left, we
see who the owners are. Again, remember the mailing address matches the
characteristics of the building. Does it give us bedrooms and bathrooms? (···1.8s)
Remember the other one did not gives us square footage (···0.8s) concrete.
That's important to know the type of construction because there's a big difference
between a concrete block, stucco house, c b s construction we call it, or a wood frame
house. (···1.6s) And I don't see bedrooms and baths (···1.1s) and it wasn't on the
county either. I think it was because of the new construction (···0.5s) that gives you the
area, (···0.5s) the land or the location. Keep scrolling up sometimes too if you wanna
know what school district it is. You know, sometimes uh, if you're trying to help
somebody who wants to buy a house, you know they wanna it to be in a certain school
district.
That is important sometimes. (···0.6s) And then the legal description, the tax
assessment information, the h o a (···1.5s) and then the last sale date, which we saw
there's only ever one been one owner. Um, so that was primarily gathered from the
county data I had shown you on the assessor site. So if we'll go back up, (···0.9s) I'll
show you other information. So, um, click on the next column, Bradley please, which is
comparables and nearby listings.
So I'm not gonna go through this now when we go through comps, I'll actually show you
how to determine value, but this is where we gather some of that data is for
comparables and nearby listings. And then the next column is tax information. (···0.8s)
So that would be for property taxes. You see that next column? (···0.6s)Nope. (···0.5s)
Yep. There tax information. So we got that, we saw that on the county as well.
Mortgage and transaction history. Let's click on that one. (···1.5s) We did see when they
bought it, they had a mortgage (···0.8s) and currently (···1.7s) does it show a date there
f h a in oh nine, is that right? (···3.0s) Correct. So they refinanced, that's the current
mortgage. They bought it in, what was it, 1998 or so? Yeah, (···2.4s) and it actually
wasn't cash.
It's showing cash. It was not a cash deal. (···1.9s) So again, be careful that mortgage
information may not be totally accurate. And then documents and reports click on that
last column (···2.5s) And there is some (···0.5s)availability of information that it can
share with you. (···0.9s) So (···1.0s) this gives you a lot of information. Something else
that I wanna share with you. So to the right under the last sale data.
So where it says tools, (···2.0s) There's a blue button there to the right (···1.1s) far right,
further, right? And there we go. (···1.0s) And that blue button says rehab calculator. I'm
not gonna go through that now. Um, but that will also calculate how much the rehab will
be. It takes you to a website that now it knows the data from the property. So when you
look at flooring, it knows the square footage. So things like that.
It also is zip code driven. So these will be prices for Fort Lauderdale, not for California.
And it'll also, um, give you choices of, you know, cheap rehab or middle of the road or
expensive. So it'll give you some sort of guide relative to how much your rehab will cost,
which is kind of interesting. (···1.5s) There's also, let's go, (···0.6s) let's x out of that for
now. Okay, (···0.6s) so we put in that address, but let's just put in some, let's put in
Miami, Florida.
(···2.7s) So if we wanna look in the city of Miami, (···2.4s) all of this data appears.
(···0.5s) So currently directly under Miami, that first button says there's 15,575
properties on the M L Ss. Currently, (···0.5s) I wouldn't, wouldn't necessarily get them
from um, prop stream, I would get that from my realtor.
(···0.7s) But the pre foreclosures, the next button is auctioned. And then after that is
bank owned. So those are three stages of foreclosures that we talked about. So if you
don't wanna get the information directly from the county, check how accurate this is for
your particular area. And you might be able to get the data here. So if you click on the
second button where it says pre-foreclosures, there's currently 2,952 homes in the
Miami area.
That's not a county by the way. That's just a city 2,952 pre-foreclosures. Now from our
earlier training, a pre-foreclosure is basically (···0.5s) when the notice has been filed,
right? That's when it becomes public. And so there are 2,952 properties that the notice
has been filed on. And so they're not foreclosed on yet, they're pre-foreclosures and you
would deal directly with the homeowner.
(···1.2s) Next button is 216 properties that are scheduled for auction. (···0.5s) And I
mentioned to you that in Miami, Miami the auctions are held online. They're not held in a
physical location, but there are the properties that have an auction date. Be careful. This
one says four 12, the auction date, the next one is 3 29. (···1.2s) So make sure you
(···0.6s) know, these should not be showing as current.
Obviously we've passed those dates, so it's important that you double check that data.
Again, they're grabbing it from the county. (···2.0s) Are there any in May? (···1.8s)
These all seem to be in the past. (···1.4s) You might be able to filter it (···3.5s) Scrolling
through though. It's probably, I don't know why it's that way. I've seen that before. Not
just for Miami, but there's 1 5, 5 5, 10. (···2.4s) Gotcha.
(···0.7s) So there are still some that are coming up. (···0.5s) Okay. So the ones that the
auction button are properties that are scheduled for auction. So they're at the next
stage, right? (···0.7s) And then the last stage there is bank owned, which again, pre
foreclosure, the lender files notice the homeowner works something with the lender or
sells the property or if none of that happens, it goes to auction. (···0.6s) If Bradley
doesn't buy it, then the bank takes it back and it becomes a bank owned property.
So those are on the m l Ss typically. And again, I would get that information from your
realtor as opposed to getting it just off of this website. I would think that that would be a
little bit better. (···0.6s) But go back to pre foreclosures for me that second button,
Bradley. (···2.9s) And then click on one of the first properties that comes up. (···4.1s) So
that address 6,400, (···1.5s) that may not be a house.
Is it (···0.9s) Commercial? Hang On. Yeah. B, based on the address, go back for me.
Let's click on the next one. 1790 Northwest fourth Street. (···2.1s) So what I wanted to
show you (···0.5s) was that (···0.9s) the information that we looked up before, so under
the picture of the house (···0.7s) down below it, property detail, so it has the owner all
that information, but then the next column actually says pre foreclosure details.
Do you see that Bradley? Yep. (···0.9s) That wasn't on the other property in sunrise that
we looked up because it wasn't in foreclosure. So when you're looking up foreclosures,
it will add another column with this extra data in there. Okay, so the recording date,
(···0.7s) this mortgage is city first and the recording date of the Liz Pends there (···0.8s)
is six 14 or eight 14, but you see how long that's been going on, right?
So that's when the notice was filed and obviously, um, COVID hasn't allowed that to
excel very quickly, but here is the attorney. The next page down or the next um,
lockdown is the attorney who's handling that? The original loan information, $40,000
2000. Is that 18 or 16? (···1.7s) 16. 2016. (···0.5s) What, what kind of property is that?
It's a single family. Oh. Oh, it says corporate owned. So this, (···1.3s) oh, it could be an
investor's property. Duplex. Wow, that's cheap. (···1.7s) $40,000. (···1.0s) They bought
it even in 18. Did you say 18 or 16? Either way it was cheap. (···1.0s) Wow. (···1.4s)
And it's says Here, it looks like what it was, they probably just did a line of credit for
40,000. This is just the loan. (···0.8s) Yeah, the original loan. (···0.7s) I'm surprised they
didn't have more though.
(···1.2s) Yeah. And then the Liz Pendens it says was filed in 2020. But I wanted you to
see that that additional information is there, um, as it relates to the foreclosure (···1.4s)
and then (···2.2s) linked properties. So this is also interesting. Go over four rows for me.
Yep. Linked properties. So if this owner (···0.7s) is linked to another property, this will
also give you that data, which I think they recently added this because I hadn't seen it
until recently.
And basically if Catherine Butler, we were looking up this one property that's in
foreclosure, but if my name was connected to another property, it would come up. So
we of course might be interested in both properties, not just the one. One could be an
owner occupied, the other may not be, it depends, but if they're in financial trouble, that
may be two opportunities for us rather than just one. (···0.6s) So that linked properties is
kind of cool.
You certainly aren't gonna get that from your county data. Right. (···2.0s) Let's go to
documents and reports. The last one, I (···0.9s) wonder if it'll show the Liz pendants. Do
you see that it has that there? (···6.6s) No, those are reports. It doesn't have any
documents apparently. (···2.2s) No. (···0.8s) Okay. (···1.0s) But it does tell us in the
pre-foreclosure details, the amount.
(···0.7s) Okay. So that's as it relates to pre-foreclosures. If you can go back up for me
(···1.6s) and I (···0.6s) wanna show them one other thing. I'm not gonna go through it,
but click on the analysis button at the top there, there we go. (···1.1s) So you can do an
analysis on this property. This analysis is for cashflow properties. It's not for flipping, but
this literally will take you through several different screens and it talks about purchase
what your mortgage is because it's income property, what the income will be, your
expenses when you resell it.
But keep in mind it also tracks from the property. So it's going to automatically input
your tax information if there's an h o a, so it'll automatically add those things in there for
you and it calculates your return. And then let's say that you put in rents of a thousand
dollars a month and you say, well what if I change it to 1100? You can go back into the
analysis, change the um, rental amount, and then it'll recalculate it for you.
And it it literally pre-populates with what the gross monthly rental income is for that area.
Again, until you find out whether or not this is accurate for your, for your area, you don't
wanna trust any of these numbers. And it doesn't mean that I'm saying that this data
isn't good. I don't know. It's good until you prove it to me that it's good. We don't know
that. But I wanted you to know there's an analysis tool in there completed. And then I,
There (···6.0s) we go.
Okay, you can get out of that one. I'll just show you another couple things in here. I
(···3.0s) like another tool. So let's do Miami and then, (···0.7s) oh, where's the, (···2.7s)
okay. Under analytics so that oh, you, yep. To the left a little bit that bubble, the
elongated bubble.
Click on analytics (···0.8s) and then click on (···0.8s) value that dropdown menu
(···1.1s) and fill in the button. Estimated value please. (···2.2s) Willa. And then you can
obviously, um, zoom in a bit. But (···1.8s) If we go back to the, I know what the colors
are. So red is the most expensive, where's red on the coast, right? That makes
complete sense. (···0.6s) And then the colors in between.
There's other criteria there. But you know, sometimes if you're looking at your area,
where are the less expensive areas? You know, maybe you don't wanna go to the light

blue, but you wanna go into the blue or the green. Chances are you're not gonna be in
the red by any stretch of the means, right? That's not where we want you to start out
investing and might not even end up investing there, but you could live there. So keep
that in mind, right? But that's one of the tools that I really like about this. And it's, it's
instantaneous. Like I said, you can zoom in, can you zoom in a little bit please, Bradley?
It will literally go down to the street level and it'll have a dot on each house. Do you see
the dots are starting to appear a little bit. I mean it's really pretty, um, pretty detailed
(···1.1s) and obviously it populates some of the properties that you know, are in pre
foreclosure. You could see specifically where they are. Look at those red ones. Bradley.
Hmm. Interesting. Huh? (···3.4s) So a lot of data there for you. It's, it's very interesting.
I like that piece of it. Now the other thing that I like about this particular property (···0.9s)
is we're gonna talk about marketing soon. And obviously I showed you now how to find
the pre-foreclosures or the properties for auction or the bank owned properties. You
want to consider going after some of these leads. And obviously you may not wanna
send out 3000 letters to pre-foreclosures, but you might be able to break it down into
your particular area. So, um, you know, Miami's a big place if you were to go to, you
know, one of the smaller cities and target that area, let's try Miami Springs and let's see
what that gives us.
It's um, right by the Miami airport, (···0.7s) but it's obviously not nearly as big (···0.7s) as
Miami. So their pre-foreclosures are 25. That's much more manageable, isn't it? Okay.
And even at a glance, you could look at that property and see the value or in the preforeclosure
details, see if you could find out, um, how much is owed on that property or
how much they're behind.
So that's more manageable subset for you. Let's say that we are going to wholesale a
property. (···0.5s) Well that property is in Miami Springs. Do you see the fifth button
over there says cash buyers. (···0.7s) We, (···0.7s)it doesn't mean they're all investors,
(···0.5s) however it means that they paid cash. So let's say if we were to scroll through
some of these, we don't have to do that. But if we were to scroll through some of these
properties and we see that the owner is an L L C, likely that's an investor in that area.
So if they already own one property, they might be interested in another. So that's a
resource for you. For cash buyers. Just understand they're not all investors 'cause
somebody could pay cash. (···0.8s) What if you wanted to look at properties with liens?
Let's click on liens. It might show on (···0.9s) the right, sometimes you'll see that it's an i
R S lien. Here's a state property lien county or city tax.
Um, some abstractive judgment, (···2.5s) state tax lien. So see if you wanted to target
people that had liens on their properties other than um, the mortgage, right? These
people, why, why have, why do they have a judgment against them? Why haven't they
paid their property taxes? What's their situation, right? So are they having a financial
issue (···0.6s) vacant, as I told you, is identified by the post office. That's not a big deal
to me. Those with high equity, right?
That gives us more negotiating room. If somebody either owns their house all right
outright or they have a lot of money in equity, then that gives us more negotiating
power. If they, if the property is worth a hundred and they know oh 95, not a lot of
negotiation there, right? But if it is worth a hundred and they only owe 10, way more
negotiation there. So higher equity properties also at the top. Let's go back to Miami and
then I'm gonna filter.
(···0.7s) So go to Miami please. (···1.0s) Going back to Miami. You don't want me to
sing, do you know that song, right? (···1.3s) Ooh, terrible. Okay. And then let's go to
filter, which is the next box over to the right (···0.7s) and look at all these things that we
can filter. So we could search through here for properties and ones that we might want
to target that have specific things that we're interested in. So do we want, if it's owner
occupied or non-owner occupied, you have the choice there.
(···0.6s) And then we also have, let's click on Yep. Property characteristics down a little
bit more. Nope, (···0.6s) down, there we go. (···0.7s) Let's say that you obviously like
the one, oh well we could, is it residential? What's gonna be the classification? Yeah, I
was gonna say single family there. You read my mind. Bradley, all classifications. Is that
gonna be residential to the left of the single family? Yep. Yep. Residential, (···0.5s) then
maybe you want a minimum of two bedrooms or you know, whatever your criteria is.
But you can put in specific search criteria as it relates to the property. The next one is
m, below is m L Ss status. (···0.7s) You know, on or off the m l s (···0.8s) I think it's
better off the m l Ss, quite honestly, (···0.5s) pre foreclosure and bank owned without
clicking on those buttons, this would gather that criteria as well. (···0.6s) Ownership
information, if you click on that it, I think it'll say owner occupied or not. (···0.8s) Yeah,
absentee owner, those kinds of things.
If somebody is owned for a long time, that property in sunrise was 32 years or whatever,
um, you know they have a lot of equity, they're also not spring chickens anymore. You
know, are they looking to downsize or you know, maybe now the property is paid off or
something along those lines. (···0.6s) And then lien bankruptcy or divorce status is the
next correct, Bradley. So if you wanted to look at properties that had owners really, um,
that had properties that had filed bankruptcy, well then that, you know, you could specify
those particular things or what type of lien is it that you're looking for and you could just
play around with these valuation and equity.
And then the last one is mortgage. There's also some quick choices. So back to the top
to the right of owner occupied, it says quick list choices. Yep, exactly that pulled down
menu. What a good assistant he is. You can read my mind. Are you clicking down?
(···1.8s) Is anything populating clicking the arrow?
(···1.1s) If you click high equity, that down arrow, is it not working? Uh, it's already on
that setting. Um, but if you click it to the right, (···0.6s) doesn't it give you a dropdown
menu? (···0.7s) No, in high equity, that little upside down, it (···1.3s) won't no to the left,
it won't give you anything. (···0.9s) I can just, just change. (···2.1s) Oh, I thought it
would give you more choices, which are quick choices.
(···0.8s) Oh, it, so maybe it doesn't show on your screen, but it shows on mine. It shows
on market vacant liens, pre-foreclosures Showing bank owned. Oh, that's not showing.
How is that not showing on my end? (···0.7s) That's what I wanted to through The
screen share. It might be in a different screen. Okay, (···0.6s) So there are other options
for you there. Go ahead and read 'em again Bradley, because now they'll know that
these are other options that you can search for just outta quickie. (···1.3s) What did they
say again Bradley? I'm sorry.
Yep. It is on market. Vacant liens, pre foreclosure auction bank owned cash buyer free
and clear bankruptcy divorce t delinquencies, flippers failed listing senior owners, the
vacant land tired landlord zombie properties pre-probate. (···1.1s) Wow. (···0.6s) So I've
not investigated the pre-probate. That's new (···0.7s) zombie properties. I just recently
heard what that is. Do you know what a zombie property is? (···1.6s) I don't know how
they classify it. I know that it's, uh, there's shows on TV that zombie flipping is always
just ones that require massive amounts of uh, rehab.
(···1.4s) I've heard that recently. I didn't know what that was. Another one that you
mentioned. Seniors, (···0.8s)that's new too. So they're constantly updating. So that's
pretty interesting. And in Florida, seniors is important (···0.7s) because I say it's God's
waiting ground. People come to Florida to die and so, you know, the older people, um,
probate is very big here as well because (···0.7s) you know, a lot of people, their family
lives out of town.
Probate too. Think about it, who dies generally An older person. An older person
typically doesn't have granite countertops or hasn't rehabbed in the last 10 years and
they didn't take out a mortgage recently either. So there's usually a lot of equity to play
with. So that's new. I have not investigated that at all. I literally hadn't seen that. So
that's brand new since the last time I had checked this. But this is all marketing data and
you can select properties and literally add them to a list and you can have the marketing
automatically sent out to these people.
You can skip trace from, um, the houses that you've sold if you want to send out
something different, if you wanna contact them a different way other than just the name
and address. So if you wanted to do text or um, ringless voicemail or something along
those lines, you can have these people skip traced as well. All of this is from this
particular platform. I mean we could literally spend hours.
In fact they have a free trial, typically Prop stream does, but they also have an overview
of all the different things that it does. And I can tell you that, you know, they're changing
it all the time. I literally didn't know about those new categories, but I just, I'm not trying
to sell you prop stream. (···0.7s) Please understand. That's definitely not I want what I'm
trying to do here at all. I just want you to know what's out there. And this is one example
that Bradley and I are aware of that a lot of people do use and specifically it's one more
way of how you can find those pre-foreclosures properties that are going to auction and
or, um, those that are already on the m l s as bank owned properties.
So I wanted you to know that these resources are out there for you. Like I said,
especially if you have to pay for your data through the county. I would, (···0.5s) I would
definitely compare prices to see, you know, how much more this is relative to that, but
also see all the, listen to some of the introductory introductory videos to see some of the
different things that it can do for you.
(···0.6s) I do like that analysis tool. Like I said, when you're holding, I like to use that. It
calculates it for us. Um, I also like that segmenting. So when I'm mentoring students, I'll
use this as a tool. You know, where do we wanna drive for dollars? Not the red areas,
right? Maybe not the light blue, but maybe darker blue heading into maybe green a little
bit. Okay. So that at a glance I'm very visual. So I think that's one of the reasons too that
I like those colors.
But you could also say, you know, search by what has increased the most in value
recently or what, where have rents gone up the highest? There's other ways that you
can search and such. So this is just a wealth of information and I just want you to know
that these tools are out there for you so you can, you know, save some of these leads
and then, you know, do searches at other times. You can market to them, you could
skip trace to be able to find them. You know, you could make a pre foreclosure list.
You could also then make a bankruptcy list and you know, a senior's list or what have
you, you can target from different angles and all of this information is literally at your
fingertips. (···0.6s) So, awesome. Okay, I think we are good there. What do you think,
Bradley? Yeah, Anything that's, Yeah, I think we're good. (···0.6s) And I, the, I guess
the only thing I'll add onto that is just kind of what we talked about earlier. It's that, you
know, we, we've went through a lot of different websites and, and shared a lot of
different potential resources (···0.8s) and uh, all of 'em are great.
Um, but it's, it again, it, it really just comes down to, in your business, what do you need
and, and how much are you going to use? That kind of stuff. (···0.6s) Catherine and I
talk about being able to, to look in the, the prop stream software and visually be able to
very quickly say, okay, let's, let's go drive for dollars here. Let's look for a deal here.
Boom. We can locate some pre foreclosures. Uh, and, and you could go dig through
newspaper articles, county data yourself, go pay for it at the, the clerk's office, that sort
of thing.
And sometimes it is just because time is everything, uh, it is more effective to to pay for
resources that you can find all that stuff in, in one place. So, uh, we hope that, hope you
were able to find ways to do things for, for free, maybe the old fashioned way, the old
school kind of way, uh, as you get started, but then also how we take it to the next level
through some of these other third parties.
So, uh, on the next video we'll be back to talk more about foreclosures. (···0.6s) Okay.
Can't wait. Okay. (···3.0s)
(···3.1s) Welcome back everybody. We're going to talk about how we can help the
homeowners. So we started out when I talked about foreclosures, that we teach you to
do the right thing. So part of that right thing is how can we help them? What's in their
best interest, not necessarily our best interest, right? So we need to think of (···0.9s)
whatever position they're in, what is it that they wanna see happen and how can we
help them? So before we start going into, we can do this, we can do that, blah, blah,
blah, before you start offering all of these different things to them, you know, in sales,
you ID your client, okay, you don't present them everything.
You kind of try to tailor it to them specifically. So the big thing with homeowners when
they're in foreclosure is do they wanna stay at the house or do they wanna leave?
Because those options are going to dictate how we're able to help them. And just
because they say they want to stay in the house doesn't mean that they can.
So if they say, well, you know, I haven't, um, I haven't been working for six months and
I'm not sure that I'm gonna be able to go back to work with this same company, well,
you know, they're not going to be able to stay in their house even if they want to. So
regardless of what it is they want, we'll try to help them accomplish that goal. However,
it doesn't mean that they're gonna be able to get what it is that they want. So basically
when a lender gets to the part where they say, okay, you know, if we're gonna try to
work with you, how much can you pay?
Well, the answer is nothing because they're not working. You know, it may be
unemployment, but they don't. Um, lenders don't value that relative to income because
it's only temporary. And for them to consider a source of income, it generally needs to
be a minimum of two years. And so obviously they aren't expecting unemployment to
last two years. So even if they wanna stay, it doesn't mean that they can, okay? But
when we're talking to them, let's, let's find out what it is they want.
And if they say they wanna stay, well, we can explain to them how they can work with
their lender to negotiate those back payments and or penalties. So you are going to see
on their statement that not only are they behind their mortgage payments, but there's
going to be late fees and penalties and eventually they'll be attorney's fees for filing the
foreclosure, et cetera, et cetera. But (···0.6s) many of those items are negotiable
because they're not necessarily fees that the lender has spent.
(···0.6s) So if they're late fees and penalties, they might waive them and we can help
the homeowner understand that that might be an option for them. Remember, our role is
kind of the ambassador. We're helping them understand what options they have, okay?
So they might be able to work with their lender to get rid of their behind payments or
pieces of them, a portion of their behind payments, but certainly the penalties, okay? So
they need to understand that all of that is negotiable.
(···0.6s) We might be able to help them repair their credit. You know, if they mention to
you, I used to have such a great credit score, now I'll never be able to buy a house
again. Well, if that's their issue, if credit is their issue, we could potentially pay for a
credit repair service for them. You know, we might be able to, um, give 'em some
research information if we've (···0.6s) researched how to help people repair their credit.
So find out again, what their issue is. Avoid a foreclosure on their record. Well, their
credit is bad, right?
Because they haven't been paying their mortgage. So we know that that's an issue.
However, it's easier to recover from poor credit without having a foreclosure on their
record with a foreclosure on their record. Lenders will not lend to them for a mortgage,
usually at least two to three years. So (···0.6s) all things being equal, their income has
to be, their credit score has to be up, their debt has to be in line, et cetera, et cetera. But
they, lenders have a strict rule.
Generally two to three years before they will lend to somebody. Again, if (···0.7s) the,
for a mortgage, if their credit is bad, they could fix their credit, but they wouldn't have
that hard line drawn the sand of a two or three year timeframe. So not having the
foreclosure on their record is better than just having bad credit, okay? (···0.6s) So the
bad credit, they can recover from quicker. (···0.7s) What they can also do as a
forbearance, and I mentioned this to you because so many people nowadays have
been because of covid, you know, the word forbearance is out there a lot more.
And it's basically that workout agreement with their lender. So the forbearance
agreement, (···1.6s) as I mentioned, is generally where they stop payments for a certain
amount of time and they get tacked onto the end of the mortgage, or they may get
broken down. If it's a very temporary situation, the lender might ask them to pay a
higher payment for a year until they're able to catch up the amount that they were
behind.
Keep in mind though, that's a little bit tougher, tougher for people because if they were
out of work, they weren't paying their mortgage, there likely were other bills that they
were getting behind on as well. So to increase their mortgage to a higher amount might
be a tougher, um, tougher pill to swallow. (···1.0s) And then a loan modification, we
haven't mentioned these terms yet, but this is a loan mod for short. Instead of
refinancing, (···0.7s) if we, you know, we don't wanna market to them that they can
refinance because their credit's bad, so they can't go out and go to a different lender,
but they might be able to change some of the terms of their loan with their same current
lender.
So it's called a loan modification (···0.6s) after the crash. Two, this was a very popular
strategy that people were charging homeowners to negotiate with their lender. When a
homeowner can do it themselves, we just as our, you know, role of ambassador, we
need to help them understand what their options are and working with their lender and
modifying the terms of their loan is an option.
So the most common term, or the most, yeah, the most common term that a loan
modification is going to modify is going to be the term or the length of the loan. So let's
say that they owe a hundred thousand dollars and they have 21 years left on their
mortgage, (···1.0s) and I'm gonna make up a payment of a thousand dollars a month
(···0.8s) if we were to refinance for 30 years.
So the term of that, right? So if they were to refinance the amount that was currently
owed (···0.6s) for instead of 21 years, refinancing it out for another 30. So extending the
term of that payment, then the payment will decrease and it makes it easier for the
homeowner to afford. So the most common (···0.8s) change or modification that a
lender will make is the term or the length of the mortgage. (···0.7s) The second one is
going to be interest rate.
So they may lower it, they may lock it into a rate and not keep it increasing, (···0.6s) but
they may work with you on the interest rate. And then last but not least, and this is like
number 100, even though I'm only giving you three options, this is way down the list.
They might actually modify the amount of the loan. So if the remaining balance is a
hundred thousand, if they're upside down on value, they may reduce the principle or the
amount on the loan.
But I've seen it happen. It's just not that common. But it is a potential option, again, only
if they're upside down on value. Okay? So that's if they wanna stay. But again, it doesn't
mean that they can, right? They may not qualify to stay. (···0.5s) And so I had mentored
a student and he was in foreclosure unfortunately, and he had a stay at home mom
wife. They had several children and he actually had three more.
(···12.5s) So had credit cards. (···0.5s) He was able to negotiate with his credit cards in
order to delay payments, reduce the interest rate, get a workout agreement with them,
that it reduced his monthly payment. While he was in this situation, he (···1.2s) had tried
with each of the three lenders and he had no luck.
(···1.0s) Any idea why he was able to negotiate with the credit cards, (···0.7s) but not
the mortgage companies? (···0.6s) Well, credit cards are unsecured debt. (···0.6s) So
they want to work with him because they aren't in a position to foreclose. The three
mortgages had liens on the house and they actually had an opportunity to, to get their
money back where an unsecured credit card wouldn't necessarily have that same
option.
So he was able to negotiate the credit cards, but was unsuccessful with the three
mortgages that he had. And the reason was he was unemployed. When they get to the
part, how much can you afford? He couldn't afford anything. (···0.6s) So even though he
wanted to stay, that may not have been an option, okay? But if they wanna leave the
house, if they've already made that decision, and sometimes you may have to spell
things out for them a little bit to help them understand, we can still try to reduce their
payments and penalties, right?
We can still try to reduce that. (···0.9s) If they're interested in repairing their credit, we
might be able to help them with that. (···0.7s) If we buy it or we're able to help them that
the house doesn't get taken from them at auction, that will avoid the foreclosure on their
record. And if you're in Connecticut, that big public hearing where they put place that flip
sized piece of paper or sign in your front yard. So avoid that foreclosure exposure as
well as being on their actual credit report. (···0.7s) So we might be able to buy their
house, right?
That would be ideal. That's what ideally we're hoping to do. We might be able to sell
their house if we don't wanna buy it. We might be able to find a buyer who's interested
as investors. Sometimes we have a database of buyers. So if we're able to cut out the
middleman as it relates to real estate commission or something along those lines, we
might be able to help them sell. And you might be thinking, why don't they just do this on
their own? But again, when somebody's in foreclosure or pre foreclosure on a scale of
one to 10, they're not at a 10, you know?
And sometimes they can't champion their own effort and they just start retreating and
retreating and retreating and instead of taking action, they're just letting, they're getting
into their own head basically. And rather than contacting the lender and finding out what
their options are, they're just retreating and they're waiting for somebody, you know, we
could be that shining light that can help them out of their situation, (···1.1s) bring the
mortgage up to date and equity share.
So I had mentioned earlier that when you do an equity share, obviously there's equity in
the property (···0.6s) and you'll have more opportunities for this currently because of the
fact so many people currently have equity in their properties. But there's an important
piece here, which is bring the mortgage up to date. (···0.6s) How do you bring
somebody's mortgage up to date by paying money out of pocket, right? Ordinarily when
we're buying a property, we put down earnest money, which locks in our contract, or it's
called consideration.
(···0.5s) But we aren't putting money out of our pocket to buy this house. We don't have
a contract to buy this house. We're putting money out of our pocket, which means that's
a little bit riskier on our part. So I'll explain how an equity share works, but I also wanna
disclose, this is one of those areas that I mentioned. There's two contracts that are
really important that you make sure you get from your attorney.
And one of them is the equity share agreement. When I go over the equity share, I will
share that agreement or share that again with you that you need to make sure you get
that document. Because you're bringing the mortgage up to date by putting money out
of your pocket is a little bit riskier. (···0.5s) And in the state of Minnesota, rather than
calling this an equity share, they call it equity stripping, meaning the investor is stripping
equity from that property. So it's not always viewed upon favorably.
So this is definitely something that you want to consult an attorney on and make sure
that you're doing it the proper way to operate within your state. But that is something we
can do. We can certainly stop the mortgage from happening if we don't bring the
mortgage up to date, they're gonna con move on down the foreclosure process and
eventually end up at auction and the homeowner won't have a choice. (···0.6s) So this
is an option, and we'll discuss how to share the equity, (···0.9s) receive money to move.
So what if they were to say to you, Catherine, I don't even have money to move. I can
move in with my family, but I can't afford to rent a truck. I I don't have the opportunity to
do that. Well, (···0.8s) we could possibly give them money to move right Now if we're
doing a short sale, remember owed is one 50, the property's worth a hundred. If the
lender is giving up that amount of money, do you think that they want the homeowner to
get any money? No. However, maybe we can buy a piece of furniture.
Maybe we can buy an appliance. So if you're going to try to give them money, you
wanna make sure that you literally provide them with a bill of sale so that it's a
transaction outside of the parameters of the short sale, okay? But again, don't start
offering all these things until you know what it is they want. Maybe they have money
because they haven't been able to pay their mortgage so they were able to save a little
bit, but they don't have enough to catch it all up. Or they know the prospect of them
being able to make the mortgage in the future is going to take a while before they get
back on their feet.
They may have some money. So you don't have to offer that unless they say that that's
one of their issues. (···2.0s) Help them find somewhere to live. Now what I say is when
you help somebody out of foreclosure, (···0.6s) especially with a short sale, you need
them to get out of the house. They can't stay in the house. (···0.7s) But also, even if
you're buying the house and there's equity, (···0.8s) you don't necessarily, I've
mentioned that I have rentals.
I don't want to put them in one of my rentals. And it's not just because they haven't had
a good payment history (···0.6s) after the crash. If I did not accept tenants that had a
foreclosure on their record, I would've had vacant units because that was my pool of
tenants, right? Everybody, not everybody, a lot of people had foreclosures on their, their
record. So it's not even a credit driven thing with me. (···0.5s) You run your business the
way you want to, but one of the reasons that you're dealing with the homeowner and
that they're dealing with you is because you two have established rapport with one
another and you are help them.
Okay? Well if you help them now with their current situation and they become your
tenant and they run into trouble again, guess what? They're going to expect you to help
them again. (···0.8s) So I personally like to break that tie and I don't want the, um, I
wanna break that relationship and not have them as my tenant. I will help them through
the foreclosure and hopefully they won't have a foreclosure on their record.
But then I like to break the tie. However, could I refer them to Bradley or to other
landlords that might have property so I might be able to help them find somewhere to
live, okay, just not in my property. (···1.1s) Help them buy another house in the future. If
you think about this for a second, I bet you could come up with what scenario this might
be. And (···0.7s) if you're thinking to yourselves, Hey, maybe a lease option.
That's exactly what I'm thinking of, right? But it certainly sounds good to help them get
into another house in the future. (···1.1s) Actually, lease options are made for (···0.6s)
foreclosure candidates, right? Because they need a little time to re um, fix their credit for
a little bit and maybe save up a little bit of money, get back on their feet. Their ideal
candidates actually for a tenant buyer that we can put into a lease option property. So
these are marketing words that you can use.
And so if you were to say, (···0.7s) help you buy another house in the future, you know,
a homeowner is reading that, how could they help me? You know, these might be
questions that could answer. Um, and from marketing pieces, that's, this is where you're
going to get a lot of the data as it relates to marketing. So we've talked how about how
important marketing is? And we'll get to that. But think about what are you gonna put in
your marketing? Well, one of the things or some of the things that you're gonna put are
the different ways that you can help the homeowner, right?
So that's what they need to hear from you with them. What's in it for me? What's in it for
them? They need to know what their options are and how you can help them. Okay?
(···0.7s) Next we have, (···3.0s) now that we know how we can help 'em, we have to
find 'em. How can we find 'em? Okay? (···0.7s) Address correction requested. So if you
are sending them a piece of marketing, (···0.9s) then (···0.8s) if you ask for the address
correction, (···1.9s) it's either a forwarding address or an address correction.
If you request that, you'll be notified of what the person's new address is. It's called an
address correction. And you can literally write it on the envelope (···0.7s) we talked
about earlier that you might be able to talk to, to the neighbors, right? Couple on either
side across the street. Chances are they will know. Now, (···0.6s) if you're talking to a
homeowner, a neighbor, and they say, you know, we just saw 'em in the yard.
We didn't actually have their phone number, but (···0.9s) maybe you could ask them
where they work. (···0.8s) If you're in Atlanta and they work for Coke or Delta, guess
what? You could find them that way in Florida. It might even be Publix. Do you know
Publix is one of the largest employers in Florida. They're a grocery store, which is funny
to me. Um, but the neighbors might remember where they work. And so that might be
another way of finding them. And as I've said too, I want you to try the least expensive
ways first, right? I don't want you to spend a lot of money trying to find somebody first,
(···1.6s) the property appraiser.
So we just went through the property appraiser or property assessor website and I
pointed out to you the property address and the homeowner mailing address. It's
possible that they changed their address with the appraiser. It's possible that they didn't.
You could also check in nearby county. So for instance, I grew up in Miami (···0.8s) and
that is, there's Miami, Fort Lauderdale and then basically Palm Beach County.

Even if you do a letter or you do a flyer or a door hanger or a trifold brochure, I (···0.8s)
would recommend that you put something handwritten (···0.8s) on your piece of paper.
So even if it's already printed, if you have a nice tri-fold brochure, (···0.7s) still write
something handwritten on it, it gets their attention more than just a completely printed
tri-fold brochure that somebody left behind or they got in the mail or whatever it was.
Okay? So handwritten on many levels. And then last, think about your website. I also,
you know, Bradley was talking about, you know, students are at different points of their
investing career. One thing I absolutely do not want you to do is say, oh, I can't market
until I get my website. Oh, I can't do any marketing until I get my company created. Oh,
you know, until I get, I don't know which phone number it is I'm going to use. I need to
get my logo. Whatever it is, don't use all of those excuses.
Don't wait until everything is perfect before you start your marketing. So to me it's kinda
like if you wait until the perfect time for you to have children or when you can afford 'em,
guess what? You know, there'd be no children on the planet, right? If you waited for that
perfect time, same thing with marketing. You can't wait until you have everything
perfect. At some point you're going to have to take the plunge in this marketing. I can't
stress it enough. This is one of the most key components.
How are you going to get your deals? It generally is going to have to be some form of
marketing. You know, I tell my students, you're not gonna wake up tomorrow with a
duplex in your driveway. It doesn't happen. You have to do something to make those
leads come your way. Okay? (···0.7s) Now I do want to address that. You can call them.
(···0.6s) So you could call the homeowner directly by doing a skip trace and getting their
phone number. (···1.0s) You can leave a ringless voicemail. I think everybody knows
what that is. Nowadays, if you sometimes, we'll all of a sudden you're looking at your
phone and there's a voicemail and you're like, the phone didn't even ring.
Well, my first thought of course is, you know, I had a bag signal, but in reality, it may be
that they didn't call, they just dispensed a ringless voicemail. (···0.7s) Also, nowadays
too, you can send out texts. You have to think of who you're targeting. So (···1.2s) if you
were doing (···2.2s) homeowners that have owned for over 30 years, you might not
wanna text them, right?
Because that might be an older person and they might not do text. My mom at 91 has
an iPhone and an Instagram account and can text and do all of that stuff. But you never
know, right? So (···0.8s) sometimes too, it's good to do different types of marketing
because you never know what's going to stick. I do wanna caution you and Bradley, if
you know any of this information, I have not researched it, but if you, um, heard it from
the marketing class or any other, um, things that have been discussed within Pit's path,
one of the things that I want to encourage students to do is you need to check into the
do not call list.
Because either ringless voicemail or text, you can't do because of the do not call list.
And I'm not sure which one of those it is and the do not call. They often have state, um,
state requirements and how you have to check that list and things like that. Sometimes
investors won't do it and they'll just say, oh, I'm sorry, you know, I didn't mean this.
Somehow this information was incorrect and I accidentally called you.
I apologize. Well obviously take them off your list right away, but if you get somebody
that's upset about it, you know, they could pursue it. And it's a fine, I believe for
violation. You know, it's a violating fine per occurrence, so you don't want to ever have
that happen, but you know, you want to find out what you can and cannot do. The other
thing, you know, we talked about foreclosure laws, but in this arena too, because the
ringless voicemail and the texts are becoming more popular marketing initiatives,
(···0.8s) I think that states are passing laws that are not allowing these things to
happen.
Do you know anything about that Bradley? Or hear did you hear anything about it in the
marketing class? (···0.9s) I just know that it's very similar, I guess in, you know, my
expertise being more short-term rentals, but it, it's kind of similar in that, uh, it's very up
in the air everywhere and it's ever changing. So all I tell any kind of students is it's, it's
mostly important to just kind of keep up with it.
And any area you want to do marketing in, uh, I would just do a quick Google search to,
to see what is the most accurate, because I'm seeing it change all over the place.
(···0.6s) Yeah, and I don't know that it's changing on a national level per se. I do think, I
mean, there may be some national legislation, but I also know it's state specific. I had
recently looked into it for Florida, and I believe that you, you either could get a list by
region or by county, and there were prices for that information, et cetera, et cetera.
And like I said, usually it's not going to be a problem. But, you know, if you're calling
somebody at dinner time and they're hung, they're hangry, right? Not just hungry or
angry, but they're hangry. You know, you might, you might catch 'em at the wrong time
and they wanna pursue it, you know, so (···0.6s) we're at least letting you know, you
know, what actions should be taken. It's your business. You do what you want, but as
long as you know, you know what the issues could be, like print in terms of signs, you
know, are you allowed to put signs up for bandit signs?
(···1.1s) No, (···1.1s) that's illegal. (···0.6s) It's against code violation. Ask me how I
know. I (···1.9s) can't tell you how many hundreds and hundreds and hundreds of signs
that I've put up or had put up (···0.6s) and oh (···0.9s) my gosh, I'm sorry, they must
have put that on the wrong house. (···0.9s) Or they must have put it in the wrong
location.
I'm sorry. They must have misunderstood me. I'll make sure that that sign gets taken
down (···0.7s) right away. (···0.6s) And you know, I, I don't have them now, but I used to
have code enforcement officers names in my phone and it said, code mike, code Larry,
code, whoever they were. So if they called, I knew not to answer. And lemme tell you, I
almost have a degree in signs. But you know, in that case, knock on wood, I have never
gotten in trouble. Well, I, I've gotten in trouble for them, but I've not gotten fined for
them.
I've had to have them taken down or whatever, but I've never gone to sign jail. But
supposedly you'll get a fine per sign. My experience is the code enforcement officer will
call you and your signs need to be taken down, (···0.6s) but they could find you, you
know, in one of my areas. Um, I have a couple rentals and the entrance to the
development, it's not a, it's a working class, it's not a fancy neighborhood, but it does
have a, just an entrance, not a gate or anything, but an entrance and that main stretch
and that main entry and exit, um, street, (···0.6s) everybody goes through and sees
that.
So the amount of marketing, the amount of people that see that sign, it only stays up
one day, but it's worth it because, so there's so much traffic in that particular area. So
sometimes they'll just take the signs. Usually they're, you know, they'll call you, well, I'm
like, usually they take them. That's my experience. Um, I've never gotten in trouble
other than, you know, to have to take the signs down.
That's my only experience. But, you know, and I don't know anybody personally that has
been fined for that, but apparently that can be an issue. (···0.8s) So be careful with your
marketing. The last one is, in addition to all these other methods, we also can talk to the
person in person, so we can talk to the homeowner in person. And we're actually going
to talk about that when we get back on our next segment. (···0.6s) Am I right?
(···1.4s) Yes. (···1.2s) We're gonna talk about door knocking. (···0.7s)
(···2.8s) Welcome back everybody. You may be thinking, are you kidding me? We're not
really going to talk about in-person and or door knocking, but guess what? (···1.3s) We
are. We absolutely are. And so one of the reasons that door knocking is so important is
you might be cringing already, right? We talked about what are some of the fears that
you may have. You may have a fear of door knocking. It can be a little intimidating, but
just like anything else, the more you do it, the easier it gets, right?
(···0.5s) And the (···0.7s) one of the most important things is that you are going to be
separating yourself from your competition. Because a lot of people won't do this. How
easy is it to send out a postcard or a piece of mail? It's easy, right? But it's not as easy
as it relates to actually door knocking on somebody's door. And I know it's intimidating.
I'm gonna give you a few tips and hopefully if you do practice it, then you'll find that it's
not as hard or not as intimidating as you actually thought.
I mentored a student one time and she had been in my class and when she put her
request for mentorship through, she said that she did not wanna knock on doors
(···0.7s) on her request. It's not a question on the request. And then her husband picked
me up from the airport, we went to lunch, she joined us, and within the first five minutes
she said, I don't wanna knock on doors. So we do want to as mentors, push you out of
your comfort zone.
But she was so intimidated by it, she didn't want to do it. And if you are that opposed to
something, it's not gonna be that natural anyway. So if, if you don't believe in it or you're
not comfortable with it, you're not gonna be able to pull it off, okay? So (···0.5s) it will
separate you from your competition. Not as many people do it. If you give it a try or if
you aren't even up to it, that's okay. But I do want you to understand that there's
technique to it and it will separate you.
Okay? So door knocking, this is in person. (···0.8s) And we had already talked about,
because foreclosures, that a notice generally gets filed. You want to make sure that you
are one of the first, right? Because once that notice is filed and it's public, then other
people are going to start marketing to these homeowners. So even as it relates to door
knocking, you wanna be one of the first, okay? First to be knocking on their door.
(···0.7s) So think for a second. When do you think might be the best time?
What day of the week? Let's start with day of the week and time. We'll do it together.
(···1.7s) So if you say after work, so during the week after work, well, if they have
children, they're trying to get dinner on the table, help the kids with the homework. Make
sure that they're, um, they are bathed and get them in bed, right? That's usually a pretty
hectic time in many households. So they might not appreciate somebody knocking on
the door.
(···1.1s) What about, okay, if we cut out the week, Monday through Friday, that's not the
best time. (···0.6s)How about Saturday? Some people might think, well, if they're
working a Monday to Friday, then Saturday might work. Well, if you work during the
week, what do you do on Saturday? The kids have sports, you're running errands.
Things that you couldn't get done during the week, right? And then on Sunday, what do
most people do in the morning? Go to church. (···0.7s) Maybe they go out to eat after.
So I'm sorry, football fans.
But the best time to door knock is Sunday afternoon because that's when a lot of people
are generally home. (···0.7s) If you are door knocking, if there is a no solicitation sign,
don't door knock. They are already telling you not to be there. It's kind of like the do not
call list, right? If there's a no solicitation sign, by all means don't, don't door knock. If you
are in an area and you don't feel comfortable, you're not gonna be door knocking Friday
night at 11:00 PM But if you're in an area and you aren't comfortable abort the mission,
okay?
Trust your instincts. If you're not comfortable, then by all means, don't go forward with it.
(···0.7s) How are you going to prepare? Well, one of the things that I like is I want you to
(···0.7s) door knock in pairs. (···0.9s) And not only is it in pairs, I like the male female
roles. So Bradley might say, look, Catherine, I'm a clean cut guy. You know, I'm, I'm
strong enough, I'm, you know, I'm okay.
I, I would be comfortable and wouldn't be concerned about knocking on somebody's
door by myself. You know, I don't need another person there. But you kind of have to
think about too, you don't wanna put yourself or Bradley, a (···0.6s) man wouldn't wanna
put themselves in a vulnerable position. You know, when you're knocking on the door, is
it a single female that invites Bradley in because he looks like Superman and he's so
handsome? No, you don't wanna be put in that situation. Not that anything would ever
happen, but Bradley doesn't wanna be accused of anything, right?
So the other reason is, let's say that, um, your door knocking and it is going to be a
female. Well, she is in foreclosure because she and her husband just got divorced
because he was cheating on her. (···0.5s) Well, she probably hates all men. So
Bradley's not gonna have a chance, right? But if there is a female partner, then by all
means we might be able to speak easier to one another. However, if Bradley and I are
door knocking, she might answer the door and say, oh my gosh, you look just like my
cousin.
You know, or something along those lines. So sometimes it's that male female, it's also
that good cop, bad cop. Of course Bradley would be bad cop. I'd be good cop. But you
do want it to be two people. And I do prefer the male female. (···0.9s) If you don't have
any other options and you feel safe to do it, okay? But I really prefer for you to have
somebody door knock with you. And it doesn't have to be your business partner.
If you're doing their this business, your own, it's okay. But you know, if Bradley and I are
friends, 'cause we're not friends by the way, but if Bradley and I were friends and I said,
Hey Bradley, I need to borrow you for an hour. Will I go talk to this homeowner? We'll
grab lunch after. Is that okay? You can have somebody come with you, okay? Doesn't
have to be your business partner. They don't have to, um, be in a position where they're
really having a conversation with the homeowner either. So just their safety in numbers,
but it's also that good cop, bad cop, male, female.
Who are they going to connect with basically? Okay. (···1.0s) And how to dress. So
(···1.7s) I don't want you to overdress and I don't want you to underdress. So if we were
getting dressed pretty much nowadays, as you know, jeans are acceptable anywhere.
We're in Florida, quite honestly, especially for men, shorts are acceptable. Ladies, we
could wear capris, but shorts are also acceptable in Florida. But you certainly don't
wanna wear a suit. (···0.6s) I don't even like men to be (···0.7s) Bradley's in a business
shirt.
It is short sleeve, which I like better than long sleeves. But that is a little bit dressier to
me. I almost prefer a, (···0.9s) like a golf shirt, you know, it can be a collar, but it's that tshirt
fabric as opposed to the button down. It just looks a little bit fancier. So I don't want
you to go after working on your property with paint on your clothes, you know, I don't
want you to dress to that extreme, but I don't want you to dress up too much. (···0.6s)
And you know, ladies, for us, we don't wanna wear our, you know, Sunday best clothes,
that sort of thing either.
So dress, you know, you're going to be talking to somebody who's in financial trouble.
So don't be rubbing your wealth, you know, in their face. You don't. You wanna be
respectful, like I said, not opinion your clothes, but you don't wanna dress up and be too
flashy. And the same applies with jewelry. You know, if ladies, especially if you have a
nice wedding ring or an engagement ring, don't bring it or turn it upside down or
something like that.
Try not to be too flashy. More men have the nicer watches. Some of us ladies do, but
you know, men can be flashy with their watches, you know, they're half the size of their
hand or something like that. And you know, that can really stand out. You're not trying,
you're trying to tone yourself down, not tone yourself up, you know, not try to be flashy
and catch attention. (···0.7s) So be respectful in your dress, but don't overdress. Same
thing with your jewelry and or watch. (···0.6s) So if Bradley and I are gonna be door
knocking, we've already decided when we're gonna have to do all of our homework.
So we want to do our research on the house. We're going to know who owns the
property, right? We're going to know exactly where it's located. We're going to look them
up on public record or on prop stream. How long have they owned the property? What
did they pay for it? Any mortgage information that we are able to obtain online. How
about comparable sales for the neighborhood? So we have some idea, we don't know
the condition, but so that we have some idea of the value of what the property could be
worth.
If in fact fact we picked it, uh, fixed it up and then resold it. We (···1.7s) wanna make
sure that we have all of our paperwork as well, but do your pre-work. And so when it
comes time for Bradley and I to leave the house, (···0.7s) we have rehearsed, so we've
roleplayed in terms of him being bad cop, we wanna make sure we're on the same page
relative to our strategy. You know, we know our numbers, the what approach are we
going to take?
(···0.8s) So we walk outside (···0.6s) and are we going to take my B M W or Bradley's
Honda or his truck? (···0.6s) We're gonna take the Honda or the truck. Right? Exactly.
Okay. So you understand my point there. (···0.6s) And then if you have signs on your
vehicle, if you have magnetic signs, I buy houses cash. Or nowadays people have even
more in the back window as opposed to the magnetic signs. You don't want that on your
vehicle because you don't want to be announcing to the neighborhood, oh look, you
know, this person is having financial trouble.
So don't use signs on your car if you have them, if they're removable or try to take the
alternate car. I used to drive, uh, in fact, I was guess I was like Bradley. Bradley used to
have a Corvette. Did you say you recently got rid of that? (···1.5s) I still have it. 1970.
Oh, 1970. Good god, you weren't even born. Mm-hmm. (···0.6s) Why did you pick that
year? I (···0.7s) just really liked it.
I thought it was the best looking one. (···0.6s) Wow. That's funny. I don't know what it
looks like, but, you know, (···0.6s) would Bradley be taking his Corvette when he's door
knocking? Absolutely not. I used to have, I've always, well, often driven sports cards in
my prior life. And (···0.9s) I bought my very first four door car two years ago. (···0.6s)
And, but I got rid of the sports car image because with my rentals too, in the very
beginning, you know, I managed my own properties and you can't be driving up in a
Corvette or any other type of sports car asking somebody for their rent.
(···0.6s) And if it's a unique car like Bradley's is as well, there aren't a million of those on
the road. And so you would definitely stand out and you don't wanna do that. I also told,
because I was a single female landlord, I used to tell my tenants I lived in another city.
Well, if they see my unusual car, you know, parked under my house, then they might
know, hey, she lied. She actually does live there. So you do wanna think about the
vehicle that you're driving, (···0.7s) and this is a little bit hokey, but we have, you know,
our game plan, we're driving to the property, we wanna start thinking about getting
ourselves in the mindset, right?
Um, you know, these people aren't able to pay their mortgage. (···0.5s) Are they? What
are they doing? Are, are they drinking? Are they doing drugs? (···0.7s) Have they eaten
today? You know, how bad is their financial situation? Have their children eaten today?
You know, put your empathetic head on and be comforting to these people and get
yourself in the right mindset.
We're there to try to help them not to see how much money we can make. (···0.8s) So I
had a friend of mine who taught grad students to knock on doors for him. (···0.9s) And
(···0.8s) this sounds so hokey to me, but it also I think is just so clever. So what he
trained them to do, depending on the type of house that you live in, when somebody
comes to your house, sometimes you can hear that door slam on the car, right?
So he trained them after they closed the door to kind of scro down and wave, like they
were looking out the window and he saw them. So he kind of waved up to the house
and then whether or not they even saw somebody looking out, somebody would be
more inclined to actually answered the door because we waved and they thought that
we saw them. So it's kind of hokey, but it's also pretty clever. It's just one little tactic
(···0.6s) I normally suggest knocking. You could do the doorbell, either one.
The problem is that, um, you know, doorbells don't always work and you may or may
not know it. So you don't wanna be standing there not knowing that the doorbell doesn't
work. The other thing is that a lot of people nowadays, Bradley, I don't know the last
time you drove for dollars, but (···0.8s) the last time I drove for dollars, I was amazed.
And I'm not driving in high income neighborhoods, by the way. I was amazed at the
number of houses that have what type of doorbell? (···0.6s) A ring camera. (···0.9s)
Honest to goodness, (···0.6s) even in these types of neighborhoods, I cannot believe
how plentiful they are.
So nowadays that's something else that you have to factor in, is you might be talking to
them through the doorbell, and obviously it's a video doorbell. So do keep that in mind.
Don't be, you know, doing anything that you shouldn't be doing. As you're standing in
front of their door, they might be able to see you. Okay? (···0.8s) So once you knock on
the door, if (···0.9s) Bradley and I were going, I suggest that I stand up front, um, as
opposed to Bradley in the front.
It's just people are usually more likely to open the door to a female, even though
Bradley doesn't look threatening by any means, but they're more likely to open to a
female than they would to a male. Or let's say that I am (···0.6s) five feet tall and
Bradley is six feet tall. Well, they certainly don't want him towering over them, by all
means. You want to put him in the back. I mentored a, um, a football player and he
played, I forget what country he played in in Europe, but he, he was slender, but I don't
know if he was six eight, I don't remember how tall he was, but he was very tall.
Not only was it height, but his arms like from one wall to the other. I mean, his armand
was frightening. And so he knew that about himself and he knew that his size could be
intimidating to people, even though he wasn't like some big brute.
He was just simply tall. Um, he knew that he needed to be the one in the back so that
no one was getting intimidated by his size. In my case, you know, we all know our
personality types and I, I get a little (···1.0s) excited, (···0.5s) so I need to kind of dial my
personality back a little bit, you know, oh, you know, the car's in the driveway, maybe
they're home, you know, and I get so excited I'm knocking on the door. That's too
overwhelming to people, right? I need to dial myself back.
And so I know that about me. I have to mentally think of that in order to dial myself back.
So you knock on the door. And then the childhood game I want you to play is mother
may I, so if you think, mother, may I take one giant step back, okay? So you don't want
to be in their face like this, right? When they open the door, if you give them space that's
going to make them feel more comfortable, (···0.7s) if there is a step and you step
down, (···0.7s) do that as well because then that puts them in a position, or at least they
think they are in a position of power, they're towering over you.
So give them that step there. Also, if you are going to (···0.6s) knock on the door and
you stand right in front of the door this way, that's a bit aggressive. (···0.8s) If you were
to maybe just shift your weight back or you were to turn to the side a little bit, doesn't
this look far less intimidating than this when they open the door, right?
So try to think of how you're being perceived and how you're looking when they first
open the door (···2.3s) to make it look official. If you have t-shirts with logo, you know
your company logo, you could wear that. I highly recommend that you bring a pad folio
or a clipboard. People always, you know, like when you knock on the door and you're
waiting for somebody and you're gonna be a little nervous when you do it, (···0.6s) what
do you do with your hands, right?
So one of the things that you don't want to do is you don't necessarily want to reach out
and shake their hand. Okay? So what do you do with your hands and why don't you
wanna shake their hand? Well, you may want to, but I don't want you to because when I
shake hands, and I'm from corporate America, so my brain is automatically programmed
that I want to shake somebody's hand. Now, you know, with covid upon us too, that's a
completely different way of thinking where we don't wanna touch people, but mine was
more from an aggressive state.
(···0.5s) When I meet somebody, my automatic reaction was to extend my hand when I
extend my hand. Not don't, I don't just, you know, I'm not a cold fish, so I don't just put
my hand right here, I lean forward and I'm in their space and I'm touching them. Those
are all no-nos. So you don't wanna go down that route. But what do you do with your
hands if you have a clipboard or portfolio?
It makes it look as though you have some official business purpose there, which is
helpful. Okay? So that's something to think about. Also, I want you to bring your
paperwork. (···0.7s) If there's a disclosure that they need to sign, you know, saying that
you are, um, an investor or whatever the state may require that you sign off on, have
the homeowner sign off on where else are you gonna put that? You might as well bring
a padfolio, make yourself look official and have a place to put your, all of your
paperwork that you might need. Okay? (···0.7s) Talked about turning your body, not
shaking hands (···0.7s) and anything else you can think of, Bradley, that I didn't cover?
I (···1.9s) think I covered everything. We're gonna now talk about if they answer the
door, what you're going to say to them. (···2.3s) Anything I forgot? Nope, we're good.
Okay. Yeah, I don't, the only thing I'll throw in just the one last thing. Oh, is I get my
assistant here jumping up in my lap, but, uh, no, it's, uh, you know, the other thing is
with the, the what you wear and, and how you look and, and that presentation, (···1.5s) I
have a shirt on like this and, and coming from where I came from in the pharmacy and
the guy covered in, you know, some other kinds of tattoos and ink and all this sort of
stuff, I would cover this up when I was going outdoor knocking because that is
something like it or not.
Uh, we're still in a, a, a day and age where that could make a difference. So I would just
say, you know, again, you don't have to be over the top.
You can, you don't have to not be yourself. But at the same time, I want people to, to
see that I have an approachable demeanor. So I would just make it, uh, in a way that
that would appear as such. So just my, That's a really good point. (···0.5s) That is a very
good point. And so (···0.6s) those that are reviewing the training might not have even
seen that if you hadn't done some sort of gesture. They might not even know that that's
an issue. Because meanwhile, (···0.5s) if they haven't seen your body, they're looking at
you and thinking, oh, what a clean cut guy, and he's obviously very bright and blah,
blah, blah.
And then you stand up with these tattoos, you know, that's a, that's a very interesting
point. And it, it, it is sad that we do judge people that way. And, um, you know, your
generation, (···0.6s) it's (···0.5s) less, um, and you're gonna run into people with tattoos
more than you're not. (···0.6s) I have a friend here that we know on the beach and he
has longer hair. It's not in a ponytail, it's not that kind of long, but it's longer.
He is not as clean cut as Bradley and he has tattoos, but he also has those gauges, if
you guys know what they are with just the hole, it's not that big, but the hole in your ear,
it's not like a pierced ear where you put a post in, it's the looks like a washer kind of of,
they're called gauges. And I think that that makes him look, I don't wanna say offensive,
but makes him look a little rougher or tougher than the tattoos do. But, you know, I don't
know which came first if he got tattoos or the gauges, but that is something that you
need to think about.
I had, um, um, student that I was recently talking to and he had this c o d long beard,
(···1.8s) you know, that can be intimidating to some. (···0.6s) Or if you are wearing, you
know, a sweatshirt, don't put the hood up. And I don't mean that in any political or any
kind of cultural type of thing, but think of how somebody is viewing you, right? You want
to be as open to them and not be putting them off in any way over matters that you can
control, you know, whether it's appearance, whether it's going to be, um, you know, my,
my excitedness, you know, my excitement.
So, you know, you have to just think of how you're being perceived from others. So it's
definitely something you want to think about. But the tattoos are a nice addition. Thank
you for that. (···0.8s) So if you are door knocking, obviously you want to greet them, but
you know, if I were to knock on the door, you want to confirm that they're the person you
wanna be speaking to because what if you know, I am (···1.1s) knocking on John
Smith's door and a gentleman answers the door and I try to start talking to him.
Maybe it's the next door neighbor, maybe it's the brother, maybe it's the son. I mean, we
have no idea who it is. You wanna make sure that you are talking to the correct person.
So you want to confirm their identity, okay? Don't just assume that because a male is in
foreclosure and a male answers the door that you're speaking to the right person.
So make sure that it is the right person. (···0.6s) Identify yourself. So this is, you know,
as it relates to marketing as well, your name and or your company name, (···0.8s) I find
that the more money I spend on asset protection, (···0.7s) the less I give out my last
name. (···0.8s) I used to be Catherine Butler and now I've shortened it more to just
Catherine, because two, if you say two names, they're less likely to remember either.
But if you only say one name, they're a little bit more likely to remember one of those
names. So I've gone to Catherine, um, as opposed to Catherine Butler, and I just don't
want my name out there as much, really. But you could also say your company name
(···0.5s) and you know, you want to explain your purpose there. We help people who
are having challenges with their mortgage company. Your mortgage company has filed
paperwork against you to start proceedings, to take back your home. (···0.7s) Has
anybody been out here yet to discuss your options?
You know, try to make it as light as you can. I also don't like to use the word foreclosure.
It's an F word, right? It's not (···0.8s) socially acceptable. Oh, that is. But it's just, it's, it
makes them more sensitive. We're trying to be, you know, respectful of them and
empathetic. We don't wanna be floating some of those words around are they having a

problem with their mortgage company? Yes. That's just a nicer way of saying it, you
know, but it'll also help you understand, you know, has anybody a anybody been out
there to talk to them?
What is the history? What have they done so far? You know, have they gotten letters or
postcards or has anybody door knocked before you, has anybody been out to discuss
your options? You know, we can help them understand what their options are. We are
the ambassador. We are not the big bag bank, right? They're getting this mail and the
phone calls and everything else, and it's all very overwhelming and intimidating that we
are just this person who can help them, help them understand what the opportunities
are.
(···0.7s) So don't expect them to invite you in for a cup of coffee regardless of the time
that you're door knocking. But your goal when you're door knocking is that you want to
schedule a time to come back to talk to them. (···1.0s) Now, (···1.4s) I want you to door
knock in pairs when you are scheduling a meeting with them. If they don't have a
partner, significant other, what have you, I (···0.6s) would encourage them to also get
somebody to come to the meeting.
Is it a neighbor, a (···0.6s) family member, a friend, somebody from work, somebody
from church, somewhere along the line. They should have somebody who could also
attend the meeting to put them more at ease. They are overwhelmed by all of this
information. And so two heads are better than one and it will just make them a little bit
more comfortable and they're able to absorb more information or the other person can
help absorb it. Maybe think of additional questions to ask what have you. (···0.8s) Now,
(···0.7s) if you're not comfortable, then by all means, I don't want you to meet at the
house.
But ideally you need to see the house. So if at all possible, I do want you to schedule
that meeting at the house. (···0.8s) When you go to the house (···1.7s) for that meeting,
do you guys know where most business or most, um, most everything really happens
inside the house. It's in the kitchen or the dining room that's adjacent to the kitchen.
That's or the kitchen table.
That's where a lot of, um, discussions are had, et cetera. It's not always in the formal
living room or anything like that, (···0.6s) you know, but if you were meeting with them,
how do win friends and influence people? So what kind of dogs do you have? Bradley?
(···1.3s) Two Shihtzu. Okay, so the Shihtzu, I wasn't sure if they're shihtzu or Bijas. So
you know, let's say that Bradley is door knocking and they have a shihtzu, you're gonna
say, oh my gosh, I have two shihtzu myself. You know, you're looking for something to
bond with them.
There's a, um, what do you call it? There's a golf bag in the corner. Oh, I love to golf
myself. Are you any good? I'm just a hacker. Whatever it is, try something in there, you
know, to be able to find some sort of commonality with them and, you know, just try to
be light in conversation starting out. But, you know, you kind of wanna start things off by
saying, you know, what would you like to see happen? And basically that means do you
wanna stay or do you wanna go, you know, what have you done so far?
Have you spoken to the lender? Have you read any of the material? Do you know what
your options are? They likely don't remember. It's the big bad bank. (···0.7s) So what I
want people to do, Bradley already said this too, you need to be yourself, okay? I don't
want you to say things like I say them, but what I want you to do is literally to sit down.
This is how I do it. If it works for you, fine. (···0.6s) I sit down and I type out I can type
better than I can write quicker. (···0.5s) And I really massage what it is that I want to
say.
So do you think when I started teaching this class that, you know, Bradley and I just,
um, showed up together here one day and that I hadn't rehearsed or looked at or
thought about what I was going to say? I'm not gonna tell you I rehearsed it, but many
years ago I did rehearse things like that. But I would do it certainly for door knocking,
but I would type out exactly what it is that I wanted to say. I would make sure that it
flowed all of the words worked for me, and then I would practice and rehearse that,
(···0.5s) that I had scripted out very well.
(···1.0s) Where do you do that? (···1.3s) In front of the mirror. It's one of the most
painful experiences when you're standing there talking to your mirror, rehearsing your
script and what it is you wanna say to these homeowners. But you need to make sure
that you get the words out and that you massage them because you might have typed a
word, but when you're saying it, that really doesn't seem to make sense or it doesn't
flow from your mouth.
You wanna make sure that you are as cohesive as you can possibly be. So make sure
you're well scripted, you're comfortable with everything that it is you want to say. And
(···0.5s) then I (···0.6s) suggest you go back and make an outline. So take it out of
script form and put it into an outline form outline so that you're not overly rehearsed,
okay? Get comfortable with what it is you wanna say, but I don't want you to sound
overly rehearsed because that's, that's not gonna come across very genuine, okay?
Um, so (···1.3s) make it your own, you know, whatever words you're comfortable with.
Like if you were to say to me, I want it to be personal, or I want it to be my company, it's
your company. You can certainly make those decisions if you say, you know, I, I don't
wanna beat around the bush and I wanna tell them that. Um, I wanna use, I know that
their lender is trying to foreclose on them. Okay? It's your business, you know, by all
means, make the words yours.
You can't use my words and I can't use your words. We have to use whatever we're
most comfortable with. (···0.6s) Now, there's another thing that people, you know, will
sometimes say you could do is to door knock and say, Hey, my realtor told me that
there might be a house for sale in this neighborhood. Do you know anybody here? I'm
looking to buy a house. Do you know anybody here who might be interested in selling?
And (···1.1s) some people might say, well, you know, that might be a little bit easier
because I'm not being as confrontational and letting them know that, you know, the
lender is foreclosing.
But you also have to think about how do you transfer that conversation to, oh, by the
way, I know that you're in foreclosure, right? (···0.6s) I don't lie. Well, I'm Irish. My face
gets pink at the thought of lying, right? Let alone actually saying a lie. I wouldn't be able
to genuinely do that because I feel misleading. But Bradley or someone else might say,
you know what, Catherine, that gives him an out and that works well for me.
I feel that, you know, it's less confrontational. They can then tell me that, Hey, I may
have to sell my house. It may end up working out whatever you're comfortable with, I
would suggest trying it, but I know that I personally couldn't pull it off. Just like some of
you might not be able to pull off some of the things that I would necessarily say. Okay.
But hopefully that gives you a few tips. I've had students in class or students that I've
mentored (···1.5s) that have given me tips, you know, people who have door knocked.
Some of the professions that I think of would be like a contractor in particular, a roofer.
So if they're in Colorado and a hailstorm comes through, (···0.7s) you know, a
contractor, a roofer might go door knocking to let homeowners know. Do you know that
insurance might cover, you know, a new roof for you based on the hail damage that we
recently had? Or you know, something along those lines. But you know, obviously too
there have been religious people that have been door knocking or you know, selling
knives or girl scout cookies or whatever it is.
But there's all these different tips out there and I've tried to put some of the tips here so
that you have some idea of how you should present yourself. And so the next one is
going to be (···0.6s) the experiences that we'll encounter. Should we do that and start
fresh on the next one with the type of experiences that they might get behind the door?
(···0.6s) Okay, so we'll end it here and when we come back, we'll talk about door
knocking. Now that we know what to say, what is the homeowner, how are they going to
react?
Okay? So we'll come back for that. (···1.6s)
(···3.7s) All righty. Now that we know what to say, what to the homeowners when we're
door knocking, how are they going to react? So we wanna talk about some of the things
that you might encounter when they are, um, when you're door knocking and how the
homeowners will react. (···0.5s) So do you think for a second that somebody might
actually slam that door on you? (···0.8s) Yes, (···1.1s) absolutely. So when you get to
the part, you know, we help people who are having trouble with their mortgage
company, they may know why you're there, and if they're not ready to listen to it, that's
okay, right?
(···0.6s) And if the door slams, don't (···0.7s) knock again or ring the doorbell or cover
the peephole, or try to stop the door from closing. Don't do any of those things. Let them
close the door. (···1.1s) If they're not ready to hear it, you don't wanna pursue that,
right? (···0.6s) So if somebody slams the door, (···0.8s) where are they?
Did they run back to the couch (···0.5s) or are they still on the other side of the door?
They're usually still on the other side of the door, right? So you still have an audience,
even though they don't want to face you and speak to you, what you can do is lower
your voice and say something similar to, (···0.6s) I'm sorry, this obviously isn't a good
time for you. However, I'm in a position where I might be able to help you and at least
help you understand what your options are. (···0.9s) I'm gonna leave behind some
information.
Please feel free to contact me when it's a better time for you. Okay? That's where we
talked about our marketing, whether it be a door hanger, a flyer, a brochure, whatever it
is. I assure you, if you leave that information behind (···0.5s) you, drive around a couple
blocks and come back by, that'll likely be gone because they would've opened the door
to get the information, okay? But do understand that you still have an audience, so it's
still an opportunity for you, okay?
(···0.9s) Do you think that they're going to say, oh no, we're we're not in foreclosure.
You know, we we're, we're not there. The lender, it was just a misunderstanding. Or
they might say, (···0.7s) no, my husband fixed that, or My wife fixed that. You know, it's
not that one person, um, pays the monthly mortgage, right? So it's not like Bradley pays
one month and Renee pays the month. It, the next month it comes out of one account.
So somebody may actually be unaware that in fact the mortgage is not being paid,
(···0.5s) or they may be in denial.
If they're in denial, just let them know. If you were to bring the documentation, so if you
brought a copy of the notice of default right in your padfolio or your clipboard, if you
brought that notice, you would be able to share it with them. They can no longer be in
denial, and it's not likely that you're going to beat them door knocking than them getting
Served. When the, um, lender files paperwork, usually the property gets served as well
as the homeowner.
So if it's a, an investor, they'll get the property will get, um, served by a process server,
the foreclosure documentation, as will the homeowner. So they try to cover all of their
bases. It's not likely that you're going to beat them, but if you have documentation with
them, you can share with them and say, (···0.6s) this is actually in the court records that
I happen to see today, so that's why I'm here. (···0.5s) They may be in denial, but if you
have the paperwork, it'll at least help them understand.
So, as I said, it could potentially be a spouse. If I were to inform a spouse (···0.5s) that
their spouse is not making the mortgage payment, they have bigger issues than a
foreclosure, quite honestly. So that likely is not something that you want to get involved
in. However, again, you can leave your information behind and they can contact you
after they've had a chance to likely yell at their spouse for not paying the mortgage or
keeping them in the loop or something along those lines.
(···0.7s) So in the script, I had also mentioned that I want you to confirm that you're
speaking to the correct person. (···0.9s) If I were to knock on a door, (···0.5s) and let's
say a gentleman answers and I say, oh, are you Mr. Smith? No, um, is, is Mr. Smith
here? (···0.7s) No. (···0.6s) Does he live here? (···0.6s) No. Do (···1.0s) you know a Mr.
Smith? (···0.7s) Who could that possibly be?
(···0.9s) Could it potentially be a tenant? (···1.0s) Right now you should have done your
pre-work and you would've known that Mr. Smith didn't live there. But in case you miss
something, again, you want to verify that you're speaking to the right person. Now, I just
said that you, (···0.5s) you know, may inform the spouse that their mortgage is not
being paid. However, you could also be informing a tenant that the mortgage is not
being paid, and they're going to say, but I've been paying my rent.
(···0.6s) Well, you know, it's not exactly kosher on the landlord's part to accept the
tenant's rent and not pay the mortgage. However, (···1.2s) you have somebody that
now has the direct contact information for that landlord, right? So you should be able to
get contact information so that you can call the landlord. But keep in mind you also have
a captive audience with that tenant where you could say, you know, the landlord hasn't
been paying the mortgage.
I may actually buy this property. Is it, you know, are you happy living here? If I buy it, I
might like to keep you in this same house and you could continue to live here. Is that
something you would be interested in? No, I went out of this property right away. Well,
guess what? I have other rentals, so I might be able to put you in one of my other
properties. So get the tenant's contact information as well, because that's a conduit for
you either to get ahold of the owner or for it to be a potential lead for you as an
occupant or a tenant, either in that particular property or another one of yours.
So you can share the information with them. (···0.7s) You may also find that somebody
is open and they, you know, may say, oh my gosh, you know, I keep getting all this
paperwork from the lender and I, I didn't even know where to start. It's also
overwhelming, you know, how, how is it that you could help me (···0.7s) have that
conversation? Do you want me to come in and sit down and we can talk about it? Or
you can schedule a time, right? But they may literally invite you in at that time.
So you wanna make sure that you are prepared, as I said, what are you gonna say to
them as well as bringing the paperwork with you. So you may also encounter that they'll
be open and accepting (···0.5s) to having a conversation with you about how you can
help them. (···0.9s) And then last is if no one's home, which (···1.2s) is that you wanna
be prepared with your marketing. So in addition to the contract and the disclosure, if you
need it, or a copy of the notice of default, bring a piece of marketing to lead behind if no
one's home so that they can contact you back (···1.5s) in a live class.
We would actually role play some of these reactions. And let me tell you, it can be
hilarious. And it's often something that students, um, will comment on after the fact
because it's amazing the reactions that people will have. Um, and it's much more
animated and it just is a way for us to deal with it and encounter certain circumstances.
So, um, if you ever have the opportunity to attend a live class, we would certainly try to
execute that. But this at least gives you a little bit of, of a heads up and kind of thinking
in advance, you know, how will they react to what it is that I'm saying? These are some
of the reactions that you'll typically get (···1.9s) next, Bradley. I think we have equity
sharing, right? I used to say equity, sch equity, but nowadays many, many, many
people have a lot of equity in their properties.
(···0.7s) So we talked about why would somebody who has equity. So if their house is
worth a hundred and they owe 40, there's 60,000 in equity there, right? Why would
somebody who has $60,000 (···0.7s) in equity risk not paying their mortgage and lose
their house? Well, life happens to them too, right? Maybe they got divorced, maybe they
lost their job, maybe they had an illness. Could be anything, right? Just as a side note
too, I've been told that the number one reason that people file for bankruptcy is medical
expenses.
(···0.8s) You've heard that as well, Bradley. Brad Bradley was in kind of the medical
field, so he might've heard that. (···0.9s) So one of the first things that you want to do
(···0.7s) is you want to have the homeowner (···0.6s) sign that equity agreement. And I
told you that I would remind you that this is one of the two most important documents
(···0.6s) that you need to make sure that your attorney has approved. Whether they're
sharing their document with you, you give them a sample and they mark it up.
But this, you wanna make sure that you're following the laws for your state, and in
particular that your equity agreement is attorney approved for your state. (···0.6s) What
it really is, is a control document. So you are not contracting with them to buy the house.
That's not what, it's not a contract, but you need to have some sort of control document.
So let's say that the house is worth 80, excuse me, the house is worth a hundred
(···0.7s) and we decide to list it for 95.
Well, if it's not selling, I need to have the control to (···0.6s) therefore change the price,
lower the price. You might put things in the document that say that the homeowner has
to cooperate in the showing of the property. They have to keep it in good enough
condition, right? They have to make themselves or their house available to show to
potential buyers. So there are agreements that you wanna make sure that you (···1.1s)
discuss and agree to with the homeowner.
So if you come out of pocket (···0.9s) by bringing the mortgage, um, up to date, you are
out money. And so you want this to happen quickly. You want to be able to have this
equity share sale go through quickly and it might, um, lead to you making some
changes that you need to do. And this equity document, the share equity share
agreement, allows you the control to make those changes. (···0.8s) So the way that
inequity share works is that you're bringing a homeowner's mortgage up to date.
Ordinarily when you buy a house, there's um, earnest money, or sometimes it'll be
called escrow money, but you are basically making the contract legal by providing
consideration, which is earnest money. (···0.5s) If the deal doesn't go through, you get
your earnest money back (···0.5s) in inequity share, you are putting money out of your
pocket to stop the foreclosure.
That's how we're able to make this deal work. So we have to pay, remember how I told
you, (···0.6s) you know, once there's several months behind, oftentimes the lender will
say, you have to pay in full in order to stop the foreclosure. (···0.7s) So let's say that
they are five months behind and the mortgage is a thousand dollars a month. Well, we
have to come out of pocket $5,000. We (···1.6s) wanna make sure that that homeowner
doesn't turn around and sell the house to Bradley out from under us, right?
Because we're out money. (···0.8s) So there's something that you can file. They also
use this as it relates to lease options, (···1.5s) but there's something called a
memorandum of option. It's not exactly a lien on a property, but it's more what we call a
cloud, (···0.8s) which basically says, (···0.7s) I may have an interest in this property.
(···1.0s) I'm not telling you for sure that I do, but somebody should not be able to get
clear title without contacting you.
So it's basically that you have an interest or that it may be a financial interest in this
property. And in order to clear that document, they should actually contact you directly.
So if you are afraid that somebody, the homeowner might try to sell that property or go
behind your back in some way, a (···0.6s) way of getting a little bit of insurance is to file
a memorandum of option, which is where all of the documents get recorded at the
county, and it's not very difficult to file.
Or a title company could even, or closing attorney could even file for you. (···1.2s) So
you bring the homeowner's mortgage up to date, (···0.5s) and then (···1.1s) you
continue making the monthly payments until the house sells. So you're out money to
stop the foreclosure, but then you also need to continue paying so that they don't go into
foreclosure again, right? So you bring them up to date, and then you might have to pay
for a couple of months until the house sells and closes.
(···2.1s) Once you (···0.6s) go to closing and the house is going to sell, you are a cost
of getting that deal done. (···0.6s) So you are essentially a closing cost. So you get paid
your money back, you are an expense to the transaction. The money that you put out of
your pocket is not part of your profit. That's part of getting the deal done. You're going to
split the profit after all of the expenses are taken care of.
And that would be 50 50, right? (···0.9s) It depends. It doesn't have to be 50 50. I could
do 40, 60. I (···0.7s) couldn't do any less than that, quite honestly. But (···1.6s) you're
splitting the profit after expenses. Okay? (···0.7s) So the next one there, next slide.
(···3.3s) So here's an example for you. The homeowner hasn't made a mortgage
payment in four months.
So they're four months behind. (···0.7s) The mortgage is a thousand dollars a month.
So how much are they behind? $4,000, (···0.6s) right? (···1.0s) The fair market value of
the property is a hundred thousand. And you guys don't think, I don't know in California,
that your houses are higher in Florida, they're higher almost everywhere than a hundred
thousand dollars. But I try to use little numbers because I'm not teaching you math, I'm
just trying to teach you the example. So understand that's why I'm usually using smaller
numbers. (···0.6s) But their mortgage is a thousand dollars a month, and the value is a
hundred.
(···0.6s) The mortgage balance is $40,000. So how much equity is there? $60,000,
right? So you are going to put (···3.4s) out $4,000 to (···0.7s) stop the foreclosure,
$4,000 out of your pocket, Okay? (···0.7s) Then it might take three months to get that
property sold and actually close. So you must make an additional three months worth of
mortgage payments.
So, so far we're out $7,000, okay? (···0.7s) If the property is valued at a hundred,
(···0.5s) but we sell it for 95, if it's worth a hundred, why wouldn't you sell it for nine? Or
why wouldn't you sell it for a hundred? Well, maybe you wanna get it sold quickly, right?
So you discount the property a bit. So we agreed to sell it for 95,000. (···0.9s) You get
reimbursed the money that you put out of pocket, which is the 4,000 to stop it, and the
$3,000 in payments that they were behind.
(···0.9s) Then there could be additional closing costs, right? (···0.8s) Pay off the
$40,000 (···0.8s) that was owed. What that leaves is profit of 44,000 that we will now
split. (···0.5s) Again, (···0.7s) profit is calculated after you receive the money that you
invested back, that's not your profit or a part of your profit, you get your expenses. So
you get reimbursed. And then the true profit after the mortgage and closing costs are
accounted for.
You split the profit with the homeowner. Okay? We mentioned that you may wanna file
that memorandum of option. Here's where we run into trouble. (···1.0s) So let's say that
(···1.6s) I am the homeowner (···0.7s) and I'm talking to my brother and I say, yeah, you
know, since I lost my job, I got behind on my mortgage and you know, I (···1.2s) have
already paid $60,000 (···0.8s) down of my mortgage.
I only owe 40, and I know it's worth a hundred, but you know what, this Bradley guy
came by and helped me and I'm gonna end up getting $22,000 (···0.6s) of that. (···1.4s)
And the homeowner's brother is saying, wait a minute, you said you (···0.7s) had
$60,000 that you've already paid off and now you're ending up with 22. How is that
good? That's what I mean by it may not translate. Well, well let's break it down. (···0.5s)
So if they hadn't have sold the property to Bradley, they might not have even had the
opportunity to sell it, because they actually might have gone to auction.
Bradley put out the $4,000 to stop the foreclosure. We might not even be having this
conversation if he hadn't have done that, right? Then he continued to make additional
payments, additional sold it at a discount so that it happened quickly. (···1.0s) And there
are closing costs in addition to that, right? (···0.8s) The other thing is, you know,
homeowners might say, well, why doesn't the, or excuse me, students might say, why
doesn't the homeowner just list the property?
Well, then you have to pay real estate commission on top of that. And keep in mind too,
that homeowners aren't always in the best place psychologically. So on a scale of one
to 10, they might not be strong enough to take this effort on. They're, you know,
retreating and there are other bills that aren't getting paid and the situation is not getting
easier, and they may just not be able to take charge of their own circumstances and
they need somebody to help with that.
(···2.1s) Why wouldn't we as an investor just buy the property? (···0.6s) Why would we
do this equity sharing? Well, number one, buying a house for 95 that's worth a hundred.
I don't get over excited about that, right? There's no profit in there. To me, that's not a
big enough discount for me to buy the property. But let's say that it was, (···1.3s) well,
do I have 20 or 25% down to put on a property to get financing?
Do I have that money down? Can I even qualify for financing? I don't know, right? But
that would certainly be way more money out of my pocket. (···0.8s) Now why wouldn't
(···1.0s) the homeowner just list it, right? We talked about the fact that they aren't
necessarily up for that, but I lost my train of thought. (···4.0s) Oh, so in this scenario, we
only have $7,000 out of pocket.
We get all of our money back, (···0.6s) and then we end up splitting the 44,000. So let's
say we split it 50 50, the homeowner gets 22, we get 22. (···0.6s) What's the return on
my investment of $7,000 versus (···2.3s) what my return would be if I put 20 or 25%
down, et cetera, et cetera, right? So the return on your investment, because you have
such a small amount out of pocket, is generally going to be much greater than it is if you
were to buy it outright.
Like I said, in this scenario, it's not a big discount, but if it was, you know, you might not
be in a position to do that. But the whole key here is return on your investment. The less
you have out of pocket, the greater your return. So who wants to do this deal and put
20% down and make $22,000? Or who wants to put $7,000 down and make 22,000? I
want the seven. How about you, Bradley? Absolutely. So you will have more
opportunities for equity sharing than you've had in the past, because like I said,
repeatedly, homeowners nowadays do have more equity in their properties.
Okay? And next we're going to talk about, we'll end it here on the equity sharing, but the
next topic that we're going to talk about is the opposite, which is short sales. So that's
where somebody doesn't have any equity or they're upside down on their equity. So
we'll come back after break and talk about short sales.
(···3.3s)
(···2.6s) Welcome back everybody. So we just talked about equity shares or equity
sales and equity splits. (···0.5s) What is the opposite of that? As I said, it's short sales,
right? That's when they don't have any equity. So it's really little to know. Equity, I tend
to say when the homeowner is upside down, meaning they owe more than the value of
the property. So we've been using the numbers. If they owe one 50, but now the
property value is at 100, they're upside down on value, right?
So that's what a short sale is, (···0.7s) and it's kind of an anomaly. We say they're short
sales because we're shorting the note, so we're shorting the mortgage to the lender, but
they take a long time. So it's kind of our little play on words. They're, they're not
technically called long sales, but they do take a long time. (···0.6s) So in the short sale,
basically what you're doing is you have to present paperwork and documentation to the
lender so that you're painting a picture as to why they should sell this property to you for
less than what is owed.
Okay? And so all of this documentation that we're going to be covering is what the
lender requires. So it's usually standard. When you are going to speak to a lender,
(···0.6s) you are going to ask what they require to do a short sale, and they'll send you a
list of the information that they want. And this is very similar to what it is that they're
going to require from you. (···0.5s) And if you, when you send the information in it's
pages and pages and pages and pages, they may look at part of it, they may look at all
of it, they may look at very little of it, it just kind of depends.
But if that's their requirement, that's exactly what it is. We have to return to them. Okay?
(···0.6s) So in a short sale, the documentation that one of the first pieces you're going to
need is a standard contract. There's not a short sale contract. It's a regular purchase
and sales agreement. So short sales come in prior to auction, right? So the homeowner
still owns the home.
If we look them up in public record, you will see the homeowner's name. They still own it
(···0.6s) when you put it under contract. We don't know the amount yet because we
haven't decided on an offer price. (···0.6s) And all we need is for the homeowner to sign
that contract, which basically means they're willing to sell it to us. The price is to be
determined. The reason the price is to be determined is because who's taking the loss?
The lender. (···0.6s) So that's who we're negotiating with is the lender.
So the homeowner owns it, but the deal we make is with the lender. So the contract is in
the homeowner's name, but we don't have a price because that's with our negotiation
with the lender, okay? So it's a standard purchase and sales agreement that the
homeowner will sign, but we don't have a price that's T b D to be determined. Now,
attached to that (···0.7s) is going to be an addendum and addendum Supersede
contract. So this will overrule any language that's already in the contract, but basically

we often are minorities in that element. So it can be tough to walk into an auction where
there's already 20, 40, 60 (···1.0s) people there, right?
It's tough to walk up to a group like that. It's a lot better if you are one of the first ones
there and then people come up and you could approach them. (···0.8s) And literally, I
have had, um, in Maryland, in PG County, prince George's County, if I mentor in
northern Virginia, Washington DC or Maryland, they're often working in that county
because it's one of the less expensive counties in that general area.
So I've been to that auction so many times I've been recognized. We're literally, I'm
walking up and one of the investors has said, I know you and it's because I am, you
know, not formally dressed. I call them mentor clothes, which would be business casual,
but I'm there with one or two students, you know? And so it's just, we stand out basically
because we, they know everybody else mostly who's going to attend the auction and
bids because I told you it's their happy hour. They see each other a couple times a
week, once a week, whatever it is.
So it's easier if you get there early to be able to approach someone as they are coming
in as opposed to, you know, if there's five guys talking to together, it's tough to walk into
that group and start talking to people, right? And you know, it's their old cronies or what
have you. They may not want to be as friendly as they would be if they, if you approach
them just by themselves. (···0.6s) So (···0.8s) if you have that opportunity, get there
early, and you can always start by saying, I mean, what do you say to them?
Are you here for the auction? Okay, right? That's your bar pickup line. Are you here for
the auction? Right? What's your sign? No, um, but are you here for the auction? That's
how you can start the conversation. And then you could say, my name's Catherine, you
are Harry. Um, I'm actually here from out of town and we're here to meet other investors
like you. We're not going to be bidding at the auction. (···0.8s) Well, now they're ready
to talk to us, right? Okay. So you could, if you're a wholesaler and you want to start
building an investor database, that's my number one recommendation for you because
they're cash buyers at the auction.
(···0.7s) Also, I entered students in Oregon (···0.5s) that they were in a very small
county, very small. (···0.6s)And the day that they picked me up to mentor, they, there
was an auction being held that day and they were likely going to place a bid on a
property, but they wanted me to go buy the property before the auction started.
So we were rushing, rushing, rushing. And of course I asked enough questions that they
changed their mind and decided not to bid, um, on that property. But they had made a
contact at the auction and it was an older gentleman. And so he had agreed to place the
bid for them if in fact they decided, um, to do so. (···0.6s) Well, they had already bought
a property prior to my arrival. It was a single family house. (···0.6s) And guess who lent
them money to buy that house that they bought at auction?
The guy, the older guy that they met at the auction. So instead of coming in there like,
oh, you know, they were cousins. So two gentlemen, you know, instead of coming in,
they're like, oh, we're gonna be the two new kings, you know, of the auction instead.
They were really nice guys, unlike Bradley, and they were really nice and they, you
know, (···0.8s) went up to the gentleman after the sale and said, you know,
congratulations on your purchase. That's another line that I like to use. Congratulations
on your purchase. Um, you know, it's obvious that, you know, the way that things work
at these auctions we're new, you know, would you mind if we asked you a couple
questions?
(···0.5s) And he ended up being their hard money lender. So if you play your cards
right, it can be a great area for contacts. I will tell you, that was the hard money lender.
A question that I ask a lot when I attend auctions and I, I, I (···1.3s) don't usually get a
favorable response, but I still try, I will often ask, do you know where some of the
investors get their money or get their financing?
Oh, they have their money. Al almost no one will ever tell you, oh, (···0.7s) Bradley is
my private money lender. You know, they don't wanna give up their money source. And
usually banks don't lend on auction properties because there's not a contract. They
can't see the property first, you know, things like that. They don't know what the winning
bid is going to be. There are other options for financing them, but banks don't
necessarily give you a regular loan like they would on a regular property that you're
buying that wasn't at auction.
(···0.5s) So (···0.5s) that's a question that I often don't get answers to, but if you attend
the auction, you can kind of see what price points properties are going for. (···0.8s) And
let's say that Bradley won a bid (···0.6s) and then he left the auction and I didn't get the
chance to talk to him and I wanted to, well, if you look at the case number, you can find
out the address of that property and once you find out the length of time that it takes
before Bradley actually owns that property, you could start driving by the property
periodically.
And if you can't get ahold of Bradley, you're gonna get ahold of his rehab team who of
course can give you contact information for Bradley. You know, and if I'm driving for
dollars and I tell a property is being rehabbed, I'll stop and talk to them and you know,
hi, are you the homeowner? No, no, I work for Bradley. Oh, do you have Bradley's
contact information? You know, does he, um, does he flip the houses? Is he just gonna
resell it or does he hold them for rentals?
So you'll find out too what other people are doing in the area. So you do have the
address, you know what it is, they paid for it. You could also track it. You won't know
exactly, you know, in terms of rehab dollars, what they're spending. But you can also
see then do they flip it later? What did they flip it for? You know, so it'll help you get a
little bit of the lay of the land as well. (···1.6s) So what to say to other investors, you
could say, you know, I'm looking to meet other investors. I'm doing some marketing
efforts of my own and you know, I know that I'm not gonna be able to do all the deals.
Are you interested in doing more? Or, (···0.7s) I mentioned about the, um, student that I
attended in Spokane, Washington, and I could tell that the auction was going on, even
though she told, you know, said it was 10 o'clock, but I could tell it was taking place. We
made a contact there and I said, do (···0.7s) you ever get extra properties? If my
student is wholesaling, I'm not gonna ask if they usually, if they have extra properties,
but if they, if my student's in a position to buy, and she was, I said, do you guy, do you
ever end up with extra properties that you know, maybe you have too many to handle
right now, but you can't pass up a good deal?
You know, we would pay you a fee for it, but do you ever end up with extra properties?
And the guy that we met called my student and we ended up going to look at another
property. It was too far for her. She didn't want to go out that far, um, to manage a rehab
because she wanted to obviously spend time there not doing the work, but managing
the project. And so she chose not to do the deal.
But that led to something. (···0.7s) I had a student in Maryland that, um, we went to the
auction and before the auction we drove by one of the properties that was scheduled for
auction. And I got outta the car and I told you, you know, I kind of have to dial myself
back. I tend to get a little excited. So we stopped at one of these properties and as I was
approaching the property, this guy comes out from behind the house and I said, are you
doing here? What I think you're doing here? Meaning are you looking at the house
before auction?
Well, we had a great conversation with him. His son was with him. They were both
realtors (···0.8s) and you know, we talked about the market, what have you, went to the
sale. My student didn't buy, he didn't buy, but my student called me several weeks later
(···0.5s) and was asking me a question, I forget what it was, but I said, you know, I
always wanna know where you, how'd you get the property? That's the hardest part,
right? Where'd you get your deal? And he said, remember that guy that we met at the
house before we went to the auction? So he ended up buying a property from that guy.
So he bought it at auction and then wholesaled it to my student. So you never know
what contacts you're going to make at the auctions. Some are looky-loos, believe it or
not, this actually breaks my heart, but sometimes the homeowner will even be there. I've
been approached because if, you know, I'm talking to my student and kind of explaining.
(···7.1s) So he told me that, you know, it was the gentleman that we met who was
walking out behind that house that we went to before we went the auction, to the
auction together that day.
So even if you don't find a deal right away, the contacts that you can make at the
auctions, think about it. I mean, those are your (···0.8s) active investors. They're there
typically to buy and they're cash fires. That's the whole key. (···0.6s) So (···1.8s) keep
their name and number. I will also tell you that oftentimes they don't have business
cards. You know, one of the things that we teach you when you're setting up your
business is, you know, you need to have business cards.
When you go to the real estate investor group, you need to, you know, it's very
commonplace for you to swap business cards. I will tell you, nine out of 10 times or
more, investors don't have business cards. So don't expect them to give you something.
You can give them yours, but be prepared to write down their name and phone number.
I've, I've had people that wouldn't give me their name. He gave me his boss's name and
phone number, but he wouldn't even give me his name.
Um, it takes all kinds, you know, and I just, I don't let it ruin my day. You, you know, give
nice, hopefully you get nice in return, but that's their issue, not mine. You know, I don't
know what he thought I was gonna do. That particular guy too, it was in Maryland and
he won the first, he was the first one to win a bid at the auction. And so of course I took
the high road and I said, congratulations on your purchase, you know, after the auction
was over, the little stinker is what I wanted to say. But I didn't go that far. But I, I took the
high road.
Um, so lots and lots of different experiences. Where are they held? I've, I've been
everywhere. I think I even mentioned title companies in the parking lot. Um, on the
courthouse steps. That's generally what you'll hear about the auction. And even if a
trustee, you know, if it's not going through the court process, they'll often still be held at
the courthouse. Um, sometimes inside, more often than not outside. I've been to the
property, as I mentioned, Rhode Island, Massachusetts, I think Connecticut.
Oh, Connecticut. Yes, Connecticut as well. There. The auctions take place at the
properties. Um, all different locations. All different locations. But a good starting point is
generally going to be at the county offices. Okay? Um, the sale rules. So you should be
able to find them and they'll typically tell you that X amount must be paid upfront. You
know, oftentimes it's 10% down and then the balance is due by the end of the day or
within 24 hours, maybe a week or 10 days.
Generally it's going to be rather quickly. So you don't necessarily have time to go get
financing. You need to have your financing lined up or have access to that money. So
where I talked about the lenders, you know, a bank won't, especially like a Wells Fargo
would never, you know, give you the money on a house that they haven't seen.
However, at a community bank, and when we get into financing, I'll explain some of the
differences between the big banks and the community banks.
A community bank. If Bradley has developed a relationship with them and he's done,
you know, half a dozen deals or what have you, and the bank has endorsed them,
there's been absolutely no issue. They've gotten to know Bradley, they know the
criteria, what he is looking for, what he's capable of, blah, blah, blah, blah, blah. They
might extend Bradley a line of credit, (···0.6s) they'll attach it to that property, but that
gives him a little bit more freedom than having to get that deal approved.
Which time is of the essence, the banks can't work quickly enough for you to get
general bank financing on a potential foreclosure. A line of credit, yes. The big banks
don't give lines of credit on investment property. So it would have to be, um, at the
community bank. So find out what the rules are. I have seen people pay cash, which to
me is crazy. Um, you know, in that the last auction that I went to in Long Island and the
on Long Island, there aren't cheap houses either.
I mean, this is several hundred thousand dollars and you know, there's (···0.6s) the
auctioneer is at the front and there's usually some, you know, administrative people
handling the paperwork or what have you. And then there was this side table with like
five or six people standing around it. And this guy obviously brought cash. Were they,
you know, counting it then I guess, I don't know exactly the way it works, but I'm sure
some places won't even accept cash. (···0.5s) So here's the, the deal.
When you are bidding at an auction, you may or may not know what the opening bid is.
They may announce it at the time, they may, um, have a website where you can check
what the opening bid is prior to arrival. But you may not know. You certainly don't know
what your winning bid will be. Well, how do you have 10% money (···0.7s) or a cashier's
check? It generally needs to be certified funds. How do you have that money? Well,
(···0.7s) they have different denominations.
So they may have, you know, a $50,000, um, cashier's check and a 20,000 and a
10,000 and 5,000 and several 1000, you know, so that they'll be able to come close
enough to that 10% that the lender, or excuse me, the auction will accept payment that
way. It generally has to be certified funds. You can't do credit cards and it'll either be
made payable to the company holding the sale or to the county or whoever it is.
They tell you sometimes, um, you can make it payable to yourself and then just sign it
over to them. So it just kind of depends. But you do need to find out the rules. I will tell
you though, typically it's going to be (···0.6s) that the money, (···0.6s) sometimes it's
cash on the spot, not cash, it's full payment at on the spot. You may not be able to put a
percentage down. So find out what it is that you need to do to adhere to all of that.
Okay? Find out what the rules are. Nowadays, so much is available online.
Oftentimes on their website, they'll tell you the parameters (···1.7s) of how the process
works (···0.6s) and then also they'll talk about payment parameters. So in Florida, I
mentioned almost every county is (···0.8s) online. And so there's an online bidding
process. (···0.7s) Usually if you find a foreclosure sale online, it's generally an r e O
property. So it's a listed property that they're auctioning off. But in Florida, I don't know
of any other states that have online auctions as part of the foreclosure process.
But you have to register and you get a registration number and your funds have to be in
the account prior to the sale. So if you don't have money in your account, (···0.8s) you
aren't able to bid. (···0.6s) So sometimes I've seen them too, where you have to show
proof of funds in order to place a bid. So if I'm the crier at the auction and I know
Bradley's there every week or every, you know, twice a week, whatever it is, I may not
ask Bradley to show me his funds because you know, he's bought 10 houses so far this
year.
I know that he has his money and his ducks lined up. But if you're a new investor, you
may have to register in order to bid. You don't have to register to view. Anybody can
view, but you may have to register to bid and you may have to show proof of funds
(···1.0s) in Cook County. It's the only place I've ever seen it. They literally fill envelopes.
There's like a brown manila envelope of the property that they're auctioning off.
And when you enter the room, you have to tell them which properties you're going to be
um, bidding on. It's kind of odd. But then they do ask, are there any other bids? You
know? So even though they've asked, you know, those that have registered, they still
open. It seems very redundant to me, but (···1.1s) Cook County, I've just been there a
lot. It, it's just odd, you know? And sometimes it's just, it's the rules that they have, it's
the way they've always done it, right? You know, they aren't going to accept Venmo
because they haven't done it that way, you know, or PayPal or what have you.
So, you know, whatever archaic ways that they've done things is likely the way that it
still is. And that's why you hear, you know, oftentimes it's the auction on the courthouse
steps because that's the way it's been done. Um, so find out what the rules are just so
that you know, uh, when the auction is scheduled. So let's say that (···0.6s) there, when
you started watching the auction, let's say we're in Georgia and the first Tuesday of the
month, is that (···0.6s) today?
Huh? That's today? No. (···0.6s) Yes. (···1.3s) We'll say that would be today. So let's
say you've been watching the auction. We missed it 'cause it would've been in the
morning. But let's say you were watching the auction and they listed all of the properties
and maybe there were a hundred at the time when you started watching. Well, you'll see
some of the properties drop off (···0.7s) and you're thinking, (···0.7s) why? You know,
did somebody buy them before I had the chance?
What happened? Well, it could have been that somebody bought it in pre-foreclosure,
but you know, somebody may have a contract on a property. It may be that they are
trying to work out something with the lender. It may be that they filed bankruptcy.
(···0.7s) And so when you go to the auction, maybe now you know, there's 80 properties
that are updated on the list, but they will announce additional cancellations and
postponements and I mentioned sometimes they're getting information right up to the
second I've seen auctions delayed because they didn't know what the opening bid was.
They were waiting to hear from the lender what the bid was. Usually it is what is owed.
But I told you there's, you know, like I know Ohio, it's based on assessed value.
Typically you're going to find it is basically what's owed on the property is where they
start bidding. (···0.6s) So they announce the postponements and the cancellations.
They may or may not announce that opening bid. Sometimes you can see it online,
sometimes you may have to ask. And so sometimes you'll hear them say a dollar.
So if Bradley opens the auction at, (···0.7s) you know, $99,486, (···1.2s) somebody may
say a dollar and you're thinking, did they buy that property for a dollar? Why didn't I get
that property? It's a dollar over the minimum bid. Or sometimes they'll bid a hundred
and so it's a hundred dollars over the minimum bid. And the reason that they actually do
it that way is that you have to pay fees on the amount that's purchased.
And so (···0.8s) that's a way of getting around it is just to bid over the amount or that's
how they keep track of it. You may have, I said that opened at 99,000, you'll often see
that it's in a hundred dollars increments. (···0.6s) But (···0.6s) the crier at the auction, if
they know their market and that that property's gonna be bid up to, let's say it's a
$500,000 property, (···1.3s) they may, you know, open it at 99,000 and Bradley will say
a hundred over, or he'll say 99,800, whatever he says, the auctioneer may end up
saying, can I get 200?
You know, then he may does end get two 50. You know, they may very well go up in
price quickly if they're not gonna go a hundred dollars increments from $99,000 opening
bid to (···0.8s) a $500,000 valued property. So sometimes they'll go up in that
increment. It's also funny, you'll be (···0.7s) looking at the list and why didn't anybody
bid on that property? So now we're down to 80 before we get to the auction, there's 20
postponements or cancellations.
Now we're down to 60 Bradley's there and then he, he listens to all the properties and
he leaves. Why didn't he bid? Why did he go, doesn't he have anything better to do with
his time? Well, he might not have known what the opening bid was, right? Sometimes
you don't know until you get there. (···0.6s) So that may be why he didn't bid. Or you'll
find that, you know, a property goes at auction, no one bids on it, the lender takes it
back and that happens for eight properties.
And you're like, (···0.7s) why are they here? Why aren't they bidding? Right? You're
looking around, well that's not the good deal. So then the ninth property that they
auction off, everybody starts bidding and you're thinking, (···1.0s) what's, you know,
they should have bid on the other properties when there was no competition. Why are
they bidding on this one? They're just bidding against themselves and everybody else.
Well, that's where the good deal is. So that's why you'll see that most people bid on the
same properties because that's the good deal.
Um, you know, and then you may have, like, let's say Bradley and I are at the auction
and we keep going back and forth, you know, um, 101,000, then he says 102,000. I say
102 five. And he says 102,600. And then if I kind of back down, they'll say, going once,
going twice. And then Sally may end up entering the ring, you know, so you don't
always know who's going to be coming in after they may let Bradley and I battle it out
and then they'll come swooping in, you know, after the fact.
So you didn't even know that Sally was interested in the property. It's all just such
interesting dynamics to see there. Um, stick to your numbers, right? You need to do
your homework. We're gonna talk about liens next, but you need to know what the
comparable sales are for the neighborhood. It is difficult, as I said, to know the
condition. Um, you do need to know the liens. We talked about doing a title search, but
I'll also get into liens a little bit.
So here's what happens to one of the problems with auction. So let's say that you run
your numbers (···0.8s) and you are at the auction. And let's say your max bid is
110,000. (···0.8s) Bradley bids that property up to 115 or let's say 117. And you're like,
how, how, how can, how can he make any money if he's (···0.9s) gonna pay 117 for
that property? (···0.6s) I ran the numbers. I can't go above one 10.
(···1.2s) The problem is, when you're at auction, especially if you're new, how many
deals are you gonna do starting out? Are you gonna do, oh shoot, sorry, (···0.9s) I
usually put my phone on silent. Sorry about that. Um, you are going to (···1.4s) do a
property maybe twice a year. Maybe your first rehab is gonna take you five or six
months 'cause you're learning everything. Hopefully it won't take you that long. But you
may only do one or two, maybe three a year.
(···0.6s) Here's the problem. You're, and because you're new, you run your numbers
tight and you have to make sure that this is a good deal. (···0.6s) You can't afford to
lose money. You're bidding against Bradley. (···0.5s) Bradley does that many in a week
or a month. (···0.9s) And so if this, if he's one of the players, that's what I call them. If
Bradley's one of the players at the auction, that's who you're bidding against. And so
Bradley is likely a contractor, general contractor.
So can he do things cheaper than we can? Yes. (···0.5s) You know, he has discounts
on material. What? Leftover stuff from jobs, what have you. Well what about the fact
that he's doing more (···0.5s) so he doesn't have to make as much money as we do if
we're only doing a couple a year. (···0.6s) So that's the problem. You're bidding against
Bradley. Let's say that our minimum is $20,000. Bradley can afford to make 10 because
he is doing two rehabs this week. (···0.9s) So when you are looking at other investors
who are buying a lot, Bradley's gonna walk into a property and say, oh man, the pipes
are gone.
(···0.6s) So that's gonna cost him more than he had planned. But then he is gonna walk
into the next one and say, the appliances are still here. So he has more odds, you
know, and as long as he ends up ahead of the game, it's okay if he has some losses.
So he has less to lose because of the volume that he's doing. And that's sometimes
what you'll see. The reason you have competition and you can't match their numbers is
because of that you're bidding against somebody that, um, does a lot more volume and
can do the deals cheaper.
I had a maintenance man for over eight years, full-time maintenance man. And the year
he left me, I was not, I say that we weren't married, but he was my maintenance man
and I felt like he left me. Um, his father-in-law died and his wife wanted to go back to,
um, where they were from to be with her mom. And so they, (···1.4s)the year he left, I
wasn't really building my business.
That was, was after the crash and I kept him after the crash. But you know, until the
market was stabilized, I didn't really wanna buy too much 'cause I didn't know what was
happening. And financing had changed. But I bought three properties before he left in
April. And the reason I did was because I wanted to make sure that I kept him and didn't
have Bradley steal him from me. So sometimes you'll see these Bradley's at the
auction, they have their crews, not that they don't wanna make any money, but they
also have to keep their crews busy so they can afford to make less than you or I, um, be
careful of the Bradleys, we're gonna call 'em the Bradleys instead of the players.
Be careful of the Bradleys. Um, and then occupied or vacant, this is actually (···0.9s)
kind of crazy. Um, it's different in every state. And I think it was oh nine that they
actually, um, enacted legislation that gave tenants rights, um, that I believe expired in
2013.
But you, you also have to, there's parameters. So even for you to say, well, if the
owner's in it, then this, well sometimes it depends on, um, what type of mortgage they
had or the tenant. Well, a tenant is allowed to stay, you know, this long. Well, it might
depend on whether or not they have a valid lease. It might depend on if they're paying
market rent. So it will vary greatly. I will tell you that, um, you know, when I've asked
people at the auction for deals in Maryland, I've immediately been asked, will you take
an occupied property that leads me to believe in Maryland?
There's a problem getting the people out of the house. So I will caution you there, you
may not, you wanna check into what their rules and laws are regarding an occupied
property that you buy at auction? Um, so I have haven't bought in Maryland, so I have
not, um, actually research that matter, but that is something that you definitely do wanna
know about because I have a feeling it's a red flag.
Oftentimes, basically when the you win the auction, you're getting final judgment, you
know, and you take it to the court and then it's really a simple eviction through the
eviction process. It takes time to process, but then you're basically awarded final
judgment and then the homeowner gets, you know, taken out by the sheriff or notified
by the sheriff. They have to be out in 24 hours. So in some states it'll be that quickly that
you can get the homeowner out, sometimes not, um, are they willing to leave or not, you
know, that kind of depends.
You could pay them not to get out, but you could pay them once they're out and the
property is left in good condition. Right? Or you could start working on the outside of the
building if they're still there or what have you. But make sure that that's a whole nother
avenue that you need to explore as it relates to auctions for occupied or vacant.
(···0.9s) Okay, we're gonna stop here and then we're going to get into liens.
Another complicated topic, (···5.2s)
(···3.5s) All righty. So we're getting into liens. (···0.7s) And liens, just like so many other
things are very specific to your state. (···0.5s) So you need to find out, I'm gonna be
able to give you a general guide, but I don't, um, I don't work for a title company or a
closing attorney, and I likely am not in your state to explain exactly the way things work.
They are different by state (···0.6s) and they can change, and I'll give you some, um,
examples as to how that may happen.
So basically, when we think of a lien against a property, we think about a mortgage,
right? That's what most of us might have on a property. And so that's considered a
voluntary lien, but an involuntary lien might be (···0.5s) that you're behind on taxes. And
so somebody has a tax lien against you and it varies who has what's called priority. So
even though you might say, well, the mortgage was filed, you know, back in 2010 and
the (···0.6s) property tax lien was in 2015, they often go in chronological order.
So you might think that (···0.5s) the mortgage is the one who would be paid first. When
actuality, the state and county have what is called super priority, meaning they can
trump, excuse the pun, they can trump the first mortgage. (···0.8s) And then not
surprisingly, who do we think has greatest priority?
The I r S. (···0.6s) So I'm gonna give you a general guide of how things work. However,
(···0.8s) your title company and or closing attorney would be the ones that would be
able to tell you. A real estate attorney as well would be able to tell you exactly how the
liens work in your area. And it's important for you to know that, (···0.5s) as you know,
typically they are going to, when you go through a normal closing, a title company or
closing attorney is going to do a title search, which includes liens.
So you don't even have to worry about it. The issue is, if you are going to bid at auction,
you need to understand how liens work. Because let's say that it shows, you know, a
first mortgage is owed a hundred thousand dollars, well what if there's a tax lien on top
of that that has greater priority? So you need to understand kind of the way that it works
there. But this is most important as it relates to liens at auction, (···0.6s) not quite as
important through the regular process.
(···0.5s) Another way that you can understand the way that liens work, by searching the
clerk records, let's say that there are a hundred properties that we're going to be looking
at this week. Um, a hundred foreclosure notices have been filed in your county this
week. (···0.9s) Well, you have a hun, a list of a hundred. How do we narrow that down?
Who are we going to market to?
(···0.7s) Well, (···0.9s) let's say we have a hundred leads (···1.3s) and 20 are in the war
zone, we don't wanna invest in the war zone. So now we have 80 leads, (···0.6s) maybe
another 20 are up on the hill or on the water or the mountain or (···0.6s) whatever,
right? They're on the coast. So those are out of our price range also. (···0.7s) Then
we're left with 60 leads so far, (···0.6s) and now that we're down to 60, you can start
looking, oh, you know what, these are, these are newer construction (···0.5s) and
there's likely not gonna be any equity in those properties.
So I'm gonna take away these 10. (···0.6s) Well, now you've dropped your marketing
leads to 50 (···1.0s) of those 50, how do you decide how to market to them? (···1.2s)
When we talked about marketing, what is the most, um, time consuming (···0.6s) piece

of marketing? It would be door knocking, right? Because you're doing that in person,
(···0.6s) but it might be worth it if you could search the liens.
And sometimes literally they'll show the transaction on the county site where the deeded
was filed and sold, and then the next transaction is the mortgage. (···0.5s) And so you
might be able to easily find within your county, at least to start with the mortgage
information. And so that'll give you a guide or on prop stream. It also tells you what the
mortgage would've been. So you might at least, you won't necessarily know exactly
what is due at that point in time, but you would likely know if somebody has a lot of
equity or just a little bit of equity, those that have a lot of equity (···1.2s) might be the
properties that you wanna door knock on and spend a little bit more time.
And you advantage is going to be that you have less competition in the door knocking,
because less people will do that. Okay? So that's another reason for us to understand
liens, but it's not necessarily, um, it's not as important as it is at auction.
And what I also will often tell students to do is, why don't you, let's say that you're
looking at a property (···1.0s) and you buy it and you come to agreement, you have a
contract, you're gonna go to a um, title company, they're gonna do the title search work.
Why don't you research that property yourself (···0.8s) and then see how good you are
at being able to research the liens and see if you're accurate, okay?
You don't wanna pay the title company to do the search for you (···2.0s) just because
you wanna check yourself. So if it's already a property that you're buying, by all means
go ahead and, you know, try it yourself and see if you're any good at it. That's one way
to do a checks and balances, especially if it's complicated. They won't all be
complicated, but if they are, that's a good way to go. (···1.4s) And like I said, your title
company and closing attorneys, they have all of this memorized and they'll know exactly
the way that it works for your area.
(···0.7s) So we all understand the mortgage portions, but there's two (···0.6s) other
facets that have greater priority than the mortgage. And so of course the first is the I R
Ss, (···0.6s) and here's the way it works with the I R s. When you are doing title
searches, you will often see a search on a person. You'll see an I R S lien, and it's
actually, um, it has a, it's called an F T L, which is a federal tax lien. But to us, we call it
an I R SS lien, but federal tax lien has a tax lien number on the document that gets filed.
It'll usually have the I r s phone number. No, you may not borrow my phone number to
call the I R S, but you could use your own phone. Um, but you could call the I R S and
ask whether or not they're going to exercise their right to buy this property. 99.9% of the
time, they're not going to (···0.6s) just like I used to say, banks aren't in the real estate
business currently, the I r s is not in the real estate business, so they aren't interested in
taking anybody's property.
But the way that it works is this, (···0.7s) let's say you have a small business owner, not,
doesn't even have to be small. You have a business owner (···1.0s) and maybe,
(···0.7s) you know, maybe it's covid, maybe it's something else, but they, they don't
have a great financial year in their business and so they got behind on paying their
taxes to the government, okay, to the I R (···0.9s) S. And (···1.1s) when I see i r s liens,
I, I can't tell you it's (···0.6s) statistically significant, but it's just my experience.
There's often two. (···0.6s) And what that says to me is that there is a business owner
that got into trouble with their business, you know, things were slow or they had a
hiccup somewhere along the way, you know, some unordinary expense that they had to
deal with, and it took them more than a year to recover from that bad year. So they will
often have two i r s liens. (···0.5s) And what the I R S does is they try to take whatever
liquid you have.
And by liquid I don't mean fluid, I mean liquid as in funds. So if you have money in the
bank, they can freeze your account, okay? So they're going to try to find any liquid
assets that you might find or you might have (···0.8s) if you don't have them or there's
not enough to cover what you're owed, (···0.6s) then they will leann properties, they'll
leann assets that you have.
So let's say that you are an investor and the homeowner is not you. This wouldn't be
you in foreclosure. So if it is, if they have, this investor has two properties (···0.7s) and
they have two i r s liens totaling $50,000, (···0.7s)they will lien property A for $50,000
and they will lien property B (···1.0s) for $50,000. And so, wait a minute, you don't owe
a hundred, they only owe 50. Yes. So they're going to lien it for that amount, which
basically means that that owner can't refinance and they can't sell.
(···0.6s) So they can't sell that property or even take cash out in the mortgage with,
they're not able to get clear title because the i r s has (···0.6s) leaned it so that they
can't get clear title. So (···0.5s) in that case, (···1.0s) the I r S is going to get paid either
if they need to refinance or if and when they sell, and that includes at the auction.
Okay? Now, at auction, what happens is that the, (···0.9s) if you win the bid for the
mortgage, but then find out that there is an I R S lien, and you should know this before
your bidding, that's why we're going over it. And so they have greater priority if Bradley
wins the bid for a hundred thousand dollars, the i r s can come knocking on Bradley's
door. Chances are it'd be a letter. And so they are going to come to Bradley and say,
Hey, I want that property and I'm gonna take it from you for a hundred thousand.
So they'll reimburse him what he paid for it. They basically have first right of refusal.
(···0.8s) And so 99.9% of the time, they're not going to come knocking on Bradley's
door to get the property, but they don't want the homeowner to be able to sell it or
refinance it. And that's why they lean it. They don't want the property, but they want the
liquid asset, which would be from the sale or also from the mortgage. So that's why they
lien the property. And the um, i r s lien, I think it's 90 days generally that they have to
exercise their right.
And so if they don't, then the lien expires generally 90 to 120 days, the lien will expire.
And then, um, Bradley obviously gets to keep the property from that point. Here's part of
the problem. If there's an I R S lien on the property, do you wanna start rehabbing day
number one when you don't know whether or not the I R Ss is gonna come knocking on
your door?
No, you don't wanna put any money on out of pocket. They're not gonna pay you for the
rehab that you did. They're only going to pay you for the amount that you purchased it at
auction. (···0.5s) So oftentimes there's a holding period, or that's, that may be why you
try to (···0.7s) contact the I R S and find out whether or not they'll be exercising their
option. I don't even know of one that has, um, exercise their option. It would have to be
something where Bradley bought the house for a hundred thousand and it's worth
500,000. That might pique their interest, you know?
But if he buys it for a hundred, he's gonna have to put rehab money in it and then sell it
for 200. It's not worth their time. Okay? They're not in real estate yet. Who knows, right?
What the future holds. So the i r s has greatest priority, but it's really not a big threat. So
you have to do the research to know what liens are on these properties. If you're bidding
at auction (···0.7s) title companies or closing attorneys, generally you're gonna charge
150 to $250. (···0.9s) You obviously can't pay that and not end up getting the bid, right?
Winning the bid and getting that property. So you or somebody on your team will have
to learn how to research and find out these liens. (···0.6s) So the i r s is one, you usually
have to do the research. I have been at auctions before where they have talked and
disclosed how much of i r s liens there were attached to the property. (···0.7s) That
maybe happens one outta 50 times. I mean, that's not ordinary that I see that
occasionally. Two, they may, um, mention that there's back property taxes owed, but it's
very rare.
Usually it's the mortgage company that's foreclosing, they have the amount and who
else is owed money They don't necessarily disclose or know about. Uh, they probably
know about it, but they aren't educating you in that regard. Okay? So the next is going
to be state county local authority or utilities. So this is where we talked about property
taxes, right? (···0.8s) And the other thing, (···0.7s) occasionally it's called a, oh gosh,
(···1.4s) it's something thing, (···1.3s) a municipal lien search where they will search for
utilities (···0.6s) and um, you know, if there are unpaid utilities that (···0.6s) will attach to
the property.
So that could be years old. I've had those pop up, um, more than once on properties
and one was a tax, that was when you have, um, rental real estate, there's a tangible or
intangible tax you have to pay like on the air conditioner and the appliances or
whatever.
So it was not that much money, but, you know, I contacted the title company at one
point and I said, you know, I don't have to pay this. I didn't own the property. Then they
paid it and, you know, negated the expense. But another time I had one and it was
actually from the, I think it was the water company. And first I called the title company, it
was after the crash. So they were out of business and I had no success whatsoever
with the, um, utility company.
I asked for the supervisor. I mean, I got nowhere. (···0.6s) And at that point in time, I
just decided, you know what, it's, I'm gonna pay it because it's not worth the hassle of
me fighting it when I'm not having much success. I need to get it over and done with. So
you have to decide you have more time or money, right? First time I fought it, second
time, forget it's not worth it. Um, another thing that you will encounter is (···1.0s) code
enforcement. (···0.8s) So (···1.1s) this is my own little conspiracy theory.
(···0.6s) When we were booming (···0.6s) in my county, there was lots of buildings. So
there's permits, there's inspections, right? Revenue for the county. (···0.6s) Well,
(···0.6s) then (···0.9s) construction literally stopped overnight. (···1.2s) Where's the
county gonna make money? (···0.8s) And so I think I mentioned that I own seven
properties on one street one time, and it's literally one block across the street from the
other. So it's literally one block I teasingly called it Butler Boulevard, that's not the name
of it.
(···0.7s) And I got three code violations on that street in a matter of two weeks. And my
mail went to my attorney, so he would notify me, and he actually thought it was my ex
who was doing some kind of hanky panky. But what I think was actually happening is
that they were, (···0.7s) how were they gonna make money? So they started looking
through the records and they also sent out code enforcement officers to find violations.
(···0.7s) And so on that street, one of the violations that I had was that a final permit had
not been pulled on the roof that was three years old.
And so they were just out digging up stuff, right? Um, one property, I don't know how it
happened, must've been on a weekend and I knew nothing about it, where they
installed windows, new windows in a property (···0.7s) and you have to have a permit
for that. So I literally owned properties, same color right across the street from one
another.
They cited me for one property, and not the other (···1.0s) windows in Florida anywhere
really aren't a big deal. However, the big deal in Florida is hurricane protection. So it
wasn't that the windows were that expensive, but the permit to, you have to, you get to
install the windows and then the hurricane protection, like you have to buy. I obviously
had to do it on my, uh, maintenance man did. But I, you know, had to research it,
whatever you have to use like these eight inch long screws and screw them in, drill into
the concrete and they're like four inches apart or six inch.
I mean, it's crazy. And those suckers aren't cheap either. So it's not just the windows,
it's the hurricane protection. (···0.6s) So I had, you know, several violations, what have
you. I also had one at a property, (···0.7s) and um, I've had more than one, (···0.8s) and
I'm a good landlord, I promise. But you know, stuff happens. I had one property that,
um, had a violation for garbage in the yard, (···0.7s) and it was that the tenant had lost
their job and they were scrapping metal.
So they drove around every day trying to scrap metal. They would come home at night,
unload the trailers, drink their beer, and then the next morning code enforcement comes
through and their yard is a mess. So I got a violation there and I missed my notice. So
in, in my town anyway, um, that county, you get two notices.
So the first one I got, I was just like, oh, I'm gonna tell them it's fixed, even though it
wasn't. (···0.6s) And so I didn't know it was my second notice. So I never got the first
one. So I had to go to code enforcement court (···1.5s) and I was the only homeowner
who showed up (···1.3s) and I was so irritated, but (···0.6s) only homeowner. They even
told me what time to come because they knew how many cases they had or what have
you.
The other people that showed were only code enforcement officers. I was the only
homeowner. And the problem was that it was after the crash and it was an investor
area. It had gone down, so it was not a great area. And so everybody else was in
foreclosure and they didn't care. (···0.7s) So I literally, there were like eight people
around this table and I was so irritated that I wasn't intimidated by it, you know, it was
the lean or it wasn't a lien, it was a fine. If you don't fix it, it's like a daily fine.
And I forget if it was 150 a day or 250 a day, but it was an over (···0.6s) $20,000 fine. I
had spoken to the supervisor, couldn't get anywhere. And so I went to code
enforcement court (···0.7s) and the last question they asked me, um, I'll tell you in a
second, one of the ways I used to describe myself, I said, I'm just a single female
landlord. I work out of town a lot, and I'm pedaling as fast as I can. Was basically like,
please pity me. Was, you know, I didn't cry or do anything like that, but that, that's
literally the words that I used.
And so the very last question they asked me was how many properties I owned?
(···1.0s) And I was like, (···0.7s) oh man, did I mention I was under oath? (···0.5s) So
literally I was under oath and had to tell 'em, and I could have played a game that, oh, I
only have, you know, so many in that L L C or that trust or whatever. I didn't play that
game. So they didn't feel quite as sorry for me as I had portrayed myself. However, they
ended up dropping the fine to a thousand dollars and I had to pay $500 court costs.
And quite honestly, I didn't have a leg to stand on, but it worked. (···0.5s) So you can
negotiate those types of things. Another property, um, I got a violation again after the
crash because the property was dirty. (···0.7s) It was a duplex. I had owned probably
seven or eight years, (···1.0s) and it had screen porches in the front and the back. We
even had to install like fiberglass roofs because the cats in the neighborhood kept
climbing up the screens and falling through.
So you know, the trees, it was on a big corner lot. The yard was always mowed, the
trees were trimmed. And I get a violation because the house is dirty, the duplex is dirty.
(···0.9s) Take a sugar cube, call the code enforcement officer. Yes, officer, yes sir.
(···0.7s) And he (···0.6s) said, you know, I said, I, (···1.1s) I can't believe I've never, you
know, faced this before. I don't understand what you mean that the property is dirty, it's
well maintained. (···0.6s) And he said, basically what had happened was in Florida we
have really hard reigns.
And so it comes off the roof really hard and it had created mud that then splashed up on
the house. (···0.7s) It didn't have gutters because it's a rental. How much more rent am I
gonna get for the, the property if I have gutters? None. So I don't have gutters, but that's
what I was being cited for, was literally that the dirt had splashed up onto the house. He
said, all you have to do is pressure wash it, you'll be fine. You can't pressure wash a
house that you've painted eight years ago without having to repaint it.
I got it done that week. Um, but I was not very happy. And you know, I was politely
trying to ask the code enforcement officer, (···1.0s) why don't you go after, you know,
some of the owners of these properties where the grass is, you know, waist high and
some of the properties have, um, broken windows and what have you. And he said, oh
lady, don't you worry, we're going after them too. (···1.0s) And why were they doing
that? (···0.8s) Well, those owners didn't care because they likely weren't paying their
mortgage, but guess what, they get paid ahead of the mortgage.
(···0.8s) So with that 20 something thousand dollars fine that I told you I had on the
other property, if I hadn't have fought it and got it reduced, (···0.5s) the county would've
gotten 20 some thousand dollars if that property got foreclosed. Even if Bradley bought
it at auction, they still get their money. (···1.2s) So the county, I, (···0.7s) that's my little
conspiracy theory. I think that they, they saw an opportunity and they, they took
advantage of it.
So it was quite interesting to go through that. I haven't had code violation for a long
time, by the way. And usually they give you a warning, you know, I had a tenant who put
up a fence without a permit, she had to take it down, you know, whatever, things like
that. But usually it's nothing major. But after the crash, I think they were out there
looking, (···1.8s) but I want you to be aware. (···0.6s) So let's say that we go to auction
and typically it's going to be the first mortgage E that's going to be doing the foreclosing.
(···0.8s) And so they generally will open the bid at what is owed.
(···0.8s) Well, (···0.6s) I want you to remember, pay up sucker. (···1.0s) Pay up sucker.
If you know what (···0.5s) Jesse James the, okay, so he's the tattoo guy for our purpose
ladies who was married to Sandra Bullock, but he has some kind of TV show or
something like that. But supposedly he has a dollar sign tattooed on the palm of his
hand. (···0.7s) And so (···0.9s) if you remember this story, I'm telling you for a reason
that tattoo, it's a dollar sign.
I think it says pay up sucker (···0.6s) on his tattoo. So if you remember that, if you win
the bid at auction, you need to know that you still have to pay up. Meaning are there any
state? Um, (···5.9s) so I was saying in addition to what you win the bid for, if you're the
winning bid at auction, if there's anybody above the mortgage such as county taxes,
code enforcement, liens, town, anything like that, that is still owed.
So in addition to what you win the bid for, that has to be settled as well. I bought a
Property, I think I mentioned from a guy in jail and he had two code enforcement liens
on the property and I had major, major equity in the property. It wasn't at auction, it was
just a straight sale. But he had two code enforcement liens that attached to the property.
I was able to negotiate them down (···0.6s) and (···0.7s) I was kind of surprised
because there was so much equity in the property.
They could have fought for their money, but it didn't matter. They were willing to settle.
They, you know, were happy to get it off their books, but understand that they have
greater priority (···0.8s) even over the first mortgage. So the i r s, you generally won't
have to worry about too much, but if there are other county state things like that, that
can trump the mortgage, you need to be careful about things like that. (···0.7s) So I
think we'll end here and then when we come back, we'll pick up back on liens (···0.5s)
and we'll continue down the food chain as I call it.
I. (···1.9s)
(···2.8s) And we're back with liens. The last thing I wanna mention as it relates to the,
um, number two position, the state or county, when I was talking about the extra
expenses that can be included in what's owed to a lender, in addition to the mortgage I
mentioned, you know, late fees and penalties. I've mentioned attorney costs and I also
mentioned property taxes. So the reason that they may pay them, now you understand
with liens that priority wise they're actually ahead of the mortgage, so they could come
in and take over.
Basically, you don't, the mortgage company will often pay those property taxes so as to
protect their position of being first in line. Okay? (···0.7s) And so we're obviously pretty
familiar as it relates to having a first mortgage. Many of us have had first mortgage,
right? So that's usually he's going to be doing the foreclosing. It's typically that the
bidding starts with what is owed.
Not always a hundred percent, but generally speaking, yes. (···0.8s) And then there's
the second mortgage. So the way that (···1.2s) this will generally work is this. So let's
say Bradley wins the bid (···1.1s) on the property, it's a hundred thousand dollars
(···0.8s) and the, it (···0.7s) has a first mortgage for a hundred thousand and it has a
second mortgage for 20,000. (···0.7s) Well, if Bradley wins the bid at a hundred, what
happens is Bradley wins the title to the property, (···0.6s) the first mortgage gets their
money and the second goes away.
(···0.9s) So not specifically, but generally speaking, liens get cured at auction. But I'm
going to give you a big one that is not necessarily that way, but in general terms, liens
get cured at auction. I'll give you another example. So that same property, Bradley wins
the bid for 110,000. (···0.6s) And so the first mortgagee gets their money of a hundred,
and then what happens, it trickles down.
(···0.7s) So there's $10,000 left over, (···0.6s) where's that gonna go? The second
mortgage gets 10,000. Okay? So I want you remember, pay up (···1.2s) liens, get cured
at auction. Those are the ones below (···0.9s) kind of, and then trickle down. So those
are the three main pieces that I want you to remember about liens.
(···0.6s) So the first and second mortgage, um, you know, that if there was $10,000 left,
the second mortgage would get 10,000, and then the rest would not be paid, but it
would be settled. Okay? (···0.8s) Other junior liens that would fall even below the
mortgage. So in order of priority ones that I can normally think of would be a, um, in
Florida, if you had a pool (···0.6s) and you didn't, it wasn't the contractor, it wasn't the
bank, but it was like a financing company that lent you money, um, to build the pool.
So that would be a type of junior lien that would fall lower than the mortgage. (···0.7s) A
mechanic's lien is basically, um, if somebody has work done on their house and they
don't pay the contractor either, um, you know, it was shoddy work or they didn't finish
the job, whatever the circumstances are, maybe they just didn't pay the, (···1.2s) the
contractor can go to court and put a lien on the property.
(···0.6s) And so I had a (···1.0s) contractor that (···0.6s) stole money from me, and it
was somebody that I'd used for years and years and years. And I (···0.8s) was going to
be putting, um, central air conditioning in a duplex that I owned, like after the first of the
year. (···0.6s) And he knew about it. He was my air conditioning guy. And so he called
me in December and he said, you know, I'm gonna start after the first of the year.
Usually I didn't pay him until the job was done, but I said, you know, um, he said, I'm
gonna start after the first of the year.
Do you mind paying me half now? (···0.8s) And he said, you know, it's the holidays and
blah, blah, blah. I said, okay, no problem. Use Tim for years. (···0.6s) And then after the
first of the year, I couldn't find him. He wasn't returning my phone calls. He had
disappeared. (···0.5s) And so what he failed to tell me when he asked for the $2,500
(···1.2s) was that he had gotten injured (···0.5s) and was taking pain pills and therefore
got addicted to them. And so when he took my $2,500 (···1.3s) at the time, he knew he
wasn't gonna pay me back.
He was using it for drugs. (···0.8s) And I was infuriated. I had, like I said, I had used him
for so long and I guess I've never had a drug problem, fortunately, but, you know, I think
desperate times call for desperate measures, you know? And so I don't think that he
normally would've done something like that, but he obviously was desperate. And I'm,
I'm not a big person for holding grudges or he's gonna pay, you know, I don't always
feel that way, but I felt really wronged.
And so I, you know, sued him. I went to small claims court. Obviously I won because he
didn't deliver. Um, you know, and, but what are my options? How do I collect? You don't
get blood from a turnip, you know, I was effectively either an other junior lien or a
mechanic's lien. And so I was far down the food chain, and this was of course after the
crash. So he didn't have equity in his property anyway, I never ended up getting any
money. But the reason I went through the exercise is I kind of felt it was the right thing
to do.
You know, now actually, Bradley, I would equate doing the right thing. I'm new to the
vacation rental, so doing the right thing would be (···0.7s) being honest if a guest wasn't,
um, a good guest, you know, so that you're helping other hosts and other owners of
property. So this was my way with my contractor of making sure that, you know, there
was record that he wronged me and he, um, was responsible for that in that I pursued it.
I, I basically did the right thing. Um, didn't make me feel that good, but I just felt the
obligation to do it. So, like I said, I didn't end up getting any money from it, but
nonetheless, I went through the process. (···0.7s) And then at the bottom of the food
chain are homeowners associations or condo owners association. So an H o A or a c o
a. And so (···1.4s) this is especially where it gets squirrely. (···0.8s) So what happened
during the boom, (···1.1s) there was a lot of new construction.
And so the four states that had the most foreclosures, coincidentally had a lot of that
new construction. And so a lot of the new construction had homeowners associations
and so, (···0.7s) or condos. They built a lot of condos. And so they had associations.
Well, when we're talking about going to auction (···0.5s) after the crash, the values have
dropped. And so the first mortgage gets their money, if there's any next, it goes to the
second mortgage.
(···1.0s) The last person in that food chain is the homeowner's association. So what's
the likelihood that they're going to get any money out of this foreclosure? Not much,
right? There's not a big likelihood. There usually wasn't any money left for them.
(···0.6s) So what they did was they, um, worked with their lobbyists and they got the
liens changed in most areas.
(···0.5s) So HOAs now may survive the auction. They may even be able to foreclose,
they may be able to jump ahead of the mortgage. (···0.7s) And so this is definitely an
area that you're going to have to find out how it works. Sometimes there is a number of
months, um, you know, like a max of six months that they can collect, or it might be a
dollar amount of a maximum of 2,500 or you know, they can only lean for a certain
amount, maybe 2,500 or whatever it is.
There's a lot of different rules, but this is one area in particular that I want to make sure
that you investigate. I am not Bradley, I do have a question for you. Do you have any
properties, he primarily does vacation rentals. Do you have any properties as
investment property that have HOAs? (···1.3s) Yeah, some of them do. (···0.6s) And,
uh, I I guess kind of, I err on the side of caution with that.
Um, I tend to stay away from them, but, uh, this is kind of my caveat is, and, and I'll plug
my short-term rental course that, uh, we go over all of this, but, uh, we talk about that
some HOAs, particularly in an area like let's say Disney, uh, outside of, uh, Orlando,
Florida there, so Kissame, Davenport area, there's a lot of communities that they
understand it's a tourist spot.
So they are allowing all of the properties in there to have vacation rentals, that sort of
thing. It's encouraged. Uh, and so the h o a there may not be extremely expensive, so
maybe it's $200 a month, but if that includes our basic cable package, uh, water and
trash, it may actually be better than having to pick those u utilities up on our own in a
neighborhood where it's not controlled like that. And we have guests in our home
treatment, like the holiday in or a, a, (···0.6s) a Marriott where they leave the lights on
the air conditioning's at 60, et cetera, et cetera.
So we kind of go both ways. But (···0.7s) I would say overall HOAs are always kind of
more, more trouble than they're worth for a lot of. Yeah, I kind of feel the same way. I, I
don't have any investment properties with HOAs and (···0.6s) part of it is, you know, my
own issues such as, you know, it's not a cost that I can control. They can raise it at any
time, (···0.7s) and I'm fairly convinced that I can get it done cheaper than they can.
I don't like to be told what to do. You know, I don't want the o a telling me what color I
can paint my house or when I have to paint it, you know, I don't wanna pay for Bradley's
roof because his is leaking next door to me when my roof is perfectly fine. I don't want a
new roof until I need it, you know, so, but the h o A will make, you know, many of these
mandates to you and such. So I'm not a huge fan, but I will tell you that a lot of investors
have HOAs as well.
Condos, you know, the bottom fell out after the, um, uh, crash here in Florida. And so it
was, they were so cheap that, you know, a lot of people were paying cash and getting
really good deals on h o on, um, condos that had a c o a condo owners association, but
they, um, many of them were insolvent. So, you know, people had to pay cash, they
couldn't get financing because no one was paying into it. They'd all been foreclosed on.
So anyway, the, the message there though is that they were at the bottom of the food
chain.
They were at the bottom of the barrel, and so there was never any money left, and they
paid lobbyists to change the rules. So now they do have more rights than what they
used to have. So you do want to, um, check into that if you're looking at a property with
an h o A or a c o A. Okay. (···0.5s) Then I also wanna mention overages. So we talked
about that property where, um, Bradley paid a hundred thousand dollars. (···0.7s) The
first mortgage was owed a hundred, okay?
Then he won the bid, the scenario gave was 110. That $10,000 (···0.8s) went to the
second mortgage when 20 was owed. Well, let's say that Bradley wins the bid for
140,000. (···0.9s) So the first mortgage gets there, 100, the second mortgage gets
there, 20, and what's left to trickle down there is no h o a or any other liens. (···0.8s)
Where does that money go? (···1.1s) Some people will think that it goes to the bank
(···0.8s) who owns the house.
(···0.8s) The bank only gets what they're owed. (···0.8s) Some people may think it's the
county. If the county is auctioning off the property, it's not the county, (···0.9s) it's the
homeowner. (···0.9s) And so there are people that actually work this market, and it
happens as it relates to foreclosure sales. It also happens with tax, um, tax liens or
possibly tax deeds. I'm not familiar enough with it to say that, but I know for sure tax

most part, you're going to see standard 6%. And you think, wow, my, you know, my
realtor's making a lot of money. Well, you have the person who lists the house and then
the other agent representing the buyer.
So really they're only making half of that, right? Each side is making 3%, but then they
also have to split that with their brokerage. So if they're signed up with Caldwell Banker
or Berkshire Hathaway, you know, that generally gets split. And real estate, um, agents
can work all different types of deals with their brokers. But I do want you to understand,
you think that it's such a great amount of money that they're making. At the end of the
day, they're not making that much, you know, and they're self-employed. They have to,
you know, drive a nice car because they may have to, you know, show people around to
houses and you know, so those expenses are their own, so they aren't making quite as
much typically as you think.
But I also want you to know, you know, (···0.6s) many of you might be thinking, well,
how can I, you know, cut their commission? You can, but (···0.8s) starting out, when
you're brand new, you just like going to an attorney, you can't ask for a lot of things for
free over time. You can ask them to cut, you know? But if, if you're buying on the m l s
and then you're fixing up the property and reselling they're getting, when you buy and
when you sell, they might be willing to cut their commission or after you've used them
for a while, they might be willing to cut their commission.
So you can ask that. Sometimes they'll even, even offer, depending on what the
circumstances are, or sometimes their broker may have a, you know, strict rule that they
don't cut commission in any way, shape, or form. But standard is 6%. And obviously,
sorry, that's my watch. Obviously there is a, um, that's a big piece of the pie, right?
So if we were to cut that out, if you were able to sell it on your own, there also are a lot
of discount brokerages that are coming up nowadays. I don't know Bradley, if you've
um, seen any of them. I've heard even for like $500, (···0.6s) they'll put your property on
the m l s for you. But then there are also ones that'll do, you (···0.9s) know, they're not a
full service brokerage. Have you heard any prices on any of those?
I'm thinking under a thousand dollars is what I am thinking of for a fee. Yeah, basically, I
think I've heard eight, nine kind of sitting in my head. (···0.7s) Basically. I know it was
kind of, um, it was definitely under a thousand dollars and it was, you were just getting
access to list on the m l s. They weren't gonna go show the properties, they would
forward you emails, that sort of thing, but, um, pictures, they would do pictures and, and
put it on their, their m MLSs. I believe (···0.5s) That's a biggie.
So I've heard 500, but then I also heard, you know, you could like add on services, then
maybe it is the pictures, then you pay 8 99 or whatever it is. But they kind of had
different levels, but it's way, way, way less than the agent commission. But you know,
(···0.8s) nowadays (···0.5s) it has to be online in some way, shape, or form, right? So
that's where everyone, in fact, I know there's a percentage, I'm sure they're gonna say
it's over 90% of the people that check online before they, you know, go to look at a
property.
Years ago it used to be you would go to the realtor and see what's available. Well, now
you tell the realtor what it is you wanna see because you've already looked to see what
properties are listed. So the real estate commission is a very big piece of the pie. If it's
negotiable, that can obviously be very helpful. But that's one of our big costs would be
real estate agent commission. The next cost there then is going to be selling closing
costs, correct? Bradley? Our next line. Yep. (···0.6s) And so these are our primary
costs.
Now think for a second (···0.8s) before we determine how much we offer, what's a very
important piece of the pie that we need to factor in? (···1.3s) So we have what it'll be
worth, (···0.7s) what it'll cost us to get there. One (···1.3s) other factor we need to add in
there, (···3.0s) what is it? Bradley Profit. (···0.5s) Very, very important, right?
Don't forget your profit, you're the most important piece of that pie. So you have to
factor in your profit. If you were going to wholesale this deal, you could also add in or
subtract out, um, an assignment fee. We're not gonna do that. But then we get to the
last part, which is your maximum allowable offer. So what will it be worth? Take out all
of your expenses, leads you to the maximum allowable offer. Not what you're going to
offer, but that's the max that you can offer.
Okay? Now should we probably stop here and then we will come back and start with the
example That a good stopping part? Okay, so don't go far. We'll be back with an
example of how to calculate how much to offer. I. (···2.3s)
(···2.9s) Okay, everybody, we're back (···0.6s) and now we're going to actually put
some numbers and find out how you get (···0.7s) to determine what some of these
costs are going to be. How do we determine the after repair value? How do we know
what closing costs are, rehab, et cetera, et cetera. So we're just p f A as I call it, pulling
from air. And we're going to use an after repair amount value, an after repair value
amount of, in this example Bradley 200,000.
Correct? Okay. So we're gonna use that (···0.5s) number just because it's easier for my
math. But we're gonna show you, we're gonna go back to prop stream, which is the
software program that we shared with you prior. And we're gonna show you how to
actually calculate the after repair value. So you want to look at comparable sales and
we're gonna talk about some of the things that you need to look for. So if you wanna go
to prop stream, Bradley, please. (···6.4s) Okay.
And we're gonna use the address you of 61 10. Yep. (···2.6s) So this is a property we
already used, um, previously in another example. So we're gonna stick with that
example. So here's the overhead shot of the property. And so we had seen, you know,
who the owner was, all of the information about the property, if you scroll down, we see
that it's a three bedroom, one bath, right? So we need to compare it to others that are
three bedroom, one bath.
There we have the square footage of what the house is. We have lot size the, you
know, school district, those types of things, the legal description, (···0.7s) what else is
under there? The tax assessment information. So I already told you exactly how to
calculate that. You have to contact the county directly and they will give you, you know,
depending on what city it is, they'll tell you what the numbers are going to be. It's very
important that you not go off the tax information that um, the prior owner was paying.
So in this example, the taxes that they were paying are not at all what you would be
paying if you were to purchase that property today. (···0.5s) And then it also shares the
last sale information, which we said was in 1998, I believe. And so that was 121,500
(···1.5s) just f y I too. If you look at the very bottom, if you can go back, Bradley, it'll
show. So the last line says first mortgage information, they bought the property for 1 21
5 and (···1.6s) they mortgaged 109,350.
They said it was a new conventional mortgage. And if you look at the lender name,
that's Federal National Mortgage Association. Also you've heard it referred to as Fannie
Mae. So they got, we'll be talking about financing shortly. And they got basically a
Fannie Mae loan, which is a government backed loan. So we're talking about value. So
we're gonna go back to the top (···1.1s) and (···0.6s) we just looked at everything about
the property right now we're going to look at the next column, which is comps and
nearby listings.
(···0.9s) So when we are trying to determine value, (···0.6s) unless you're in a declining
market, you don't care what the other listings are. (···0.8s) All you care about are sold,
right? Because anybody can list a property for whatever they want, but until it has a
closing date and that it has actually closed, we don't know that that amount went
through.
So (···0.7s) unless you're in a declining market, comparable listings don't matter. Okay?
But comparable solds, that's all we're going to compare it to. And so the sale date
range, you generally want it to be six months if possible. So Bradley, let's, yeah, what
would six months be? (···0.5s) Five four. Would that be 11 four or 12? Four? That'd be
11 four.
(···0.5s) So November 4th, we'll go back six months. If there aren't enough then we'll go
back a year. But you want it to be as close in timeframe as possible. They even like
three months, especially if you're in a highly appreciating market, three months can be a
big difference, let alone six months or a year. Okay? So you want it to be as close in
date range as possible. (···0.7s) And then the next one there is square footage. So we
generally will tell you 10% above what the house is and 10% below.
I'll go ahead and keep what's there, Bradley, that's fine. But I do want the students to
understand that that's a general rule of thumb because if we start putting in too many
parameters, we're not gonna have enough properties to compare them to. (···0.7s) And
so the distance standard is a half a mile. However, (···0.8s) in particular, I think one of
the things that's important within that, um, distance measure is also the subdivision. So
you could have subdivision A here (···0.6s) and then across the street, which would
certainly qualify within that half a mile radius.
Could be a different subdivision, it could be a different school district, okay? So if at all
possible, (···0.9s) ideally it's on the same street, but if not, you want it to be within the
same subdivision because that does one have an h o a and one doesn't. You know, it
could even be that the property taxes are different. There could be a lot of different
factors. You want to have (···0.6s) numbers to calculate from properties that are as
similar to your property as possible, okay?
(···0.7s) The bedrooms. So we don't wanna compare a five bedroom house to a two or
three bedroom house, right? There's a big difference there. So I would go ahead and
put in three because I did glance and there was a two bedroom, which we really don't
wanna bother with. Nothing wrong with two bedrooms, but in this case, I think there's
going to be enough available that we can just go with a three bedroom. Um, and this
(···0.5s) over to the right, it then says status.
I told you we want to make sure that the property, oh no, don't put a three. That's a for
bathrooms, isn't it? No, no, just don't put a max. Sorry. Um, and then the next one says
status. So we want it to be sold and then one over under property class. I think it's
gonna say residential if you click on that right arrow. Yep. (···1.3s) Residential. Okay,
then we go down bathrooms. Let's put a minimum of one. That sounds kind of weird
though, right? (···0.6s) But this house was built, don't remember the year, but was in the
1950s I think.
(···0.7s) And so public record sales situation, I'm not sure even what that is, Bradley.
(···1.4s) Nah, we don't need any of those. Um, property type, we're gonna put single
family (···0.9s) because you could not compare a single family to a condo. They're
completely different. So you wanna make sure you're comparing apples to apples the
year built. So this one was built, (···0.6s) do we see at the top? I know it was in, I'm
guessing it was 19 50, 19 55.
(···1.3s) Okay, (···1.2s) so let's leave that open for now. But typically, you know, you're
not going to compare a house that was built in 1955 to a house built in 2000 or 2010.
There's no comparison. This is kind of an older developed neighborhood. So I don't
even think that that will come up, but perhaps within a half a mile it could, I'm not sure,
but you want it to be, you know, very much as similar as possible. Okay?
So the year built will keep it open and then I'm not gonna put subdivision there. And
then multi parcel is fine. So other things that you wanna think of, if you are, um, even if
it's a half a mile away, if one you know downtown in a certain area versus you know, a
more suburban area, completely different. That's not comparing apples to apples.
(···0.5s) One of the two things that you're going to run into trouble with is if you're in a
subdivision or a housing development, it's gonna be pretty easy to find properties that
are alike.
(···1.4s) What gets screwy is when you get a bit more rural and then you get into
acreage. How do you compare a (···0.6s) house on one acre to a house on 20 acres?
Well then you have to look at the land. Is that even buildable land or is it on the side of a
mountain? You know, that can be pretty tough to calculate or if there haven't been
recent sales in your area, that can be a challenge.
But one of the other big things, and you know, depending on where you're buying
(···0.5s) is views. (···0.7s) So if you have a view of the water, like here, um, on the
beach, I can tell you that we categorize properties as gulf view or gulf front and there's a
huge difference in price. So I'm on the gulf side of the beach, across the street is the
bay, (···0.7s) and literally to cross the street (···0.6s) is likely more than a hundred
thousand dollars.
And I know that sounds ridiculous, but it's true. So just being gulf side, um, you know,
makes a very big difference. Let's say that you have a home in the mountains and you
know, you have the lake view or you have the mountain range view, you know, views
are rather subjective. Or you're in California and you have a view of the Hollywood sign.
You know, those are very subjective pieces that are going to be difficult to calculate.
If you are within a subdivision, you're not gonna have a big deal. Um, but keep in mind
too, you want it to be, you know, when they do a subdivision, sometimes there's
different phases. So this was likely the first phase in this subdivision, 1955. Maybe there
was the next phase in 1960. I don't know, but you know, sometimes housing areas will
literally vary by street. And so, um, Bradley will likely know this area. I used to own
properties in Pine Manor, (···0.7s) which they also had nicknamed Crime Manor.
(···0.7s) And (···0.7s) I owned seven properties (···0.7s) on Second Avenue. And so
(···1.1s) that was not deep into the neighborhood, okay? And, but I, I didn't pretty much
wanna drive in that area past eighth. Okay? So you really, it can depend on it (···0.6s)
literally what street you're on.
And you know, sometimes too you'll have a bad neighborhood and then the very next
street is a very wealthy area. So you have to be very careful with some of those
distance pieces as well. (···0.6s) So let's go through and look at some of these comps
here. So if you can scroll up on the right hand side, we have 16 that are identified for us
that, um, the software has identified as being possible comps. And so what I want to do
(···0.8s) this next one, can you scroll over just a little bit? So the second one, let's see,
it's um, our subject property is 61st and this is 60th street and it's fifth lane and that's 6 1
1.
So that's pretty close, right? And so the lot is double the size, but the square footage is
the same. And that's a recent sale, right? Just four months ago. (···0.8s) And let's, uh,
that has an extra bath. So that's not a full comp, which means that that property, I'm
sure has been added onto. Go ahead and scroll over and let's see what we have
(···0.5s) after that one.
1958. So, or six that's close, right? Look at the price per square foot. Obviously that's a
lot higher because it's a recent sale. (···0.6s) And look at that. It's Palm Springs and it's
the fourth edition. So I would say that's a pretty good comp, wouldn't you? (···0.6s) No
pool and neither one of them have a pool. What el what other factors do we have to
compare? In Florida, obviously you'll see a lot of pools. So we have multi parcel, no and
distance. Very close. Okay, so that's definitely a good one. Let's scroll back over.
So the 6 1 1, and Bradley, can you please click on the camera? There we go. He read
my mind. (···0.5s) So when you want, now that said pool, no, didn't it, (···1.6s) right? So
this is why you have to be very careful of, you know, the data that you're looking at. So
obviously this has a pool and I was telling you a lot of, um, Florida properties do, to be
honest with you, you would think, wow, you know, if you don't live here, you'd be
thinking, wow, it has a pool. (···0.7s) It's not, it doesn't add as much value to a house as
you would think because there are so many pools, it's not that unusual to find a house
with a pool.
And you know, some people, unless you have kids, a lot of people don't spend that
much time in the pool. It's an extra expense, it's a hassle to me as a landlord, no pools,
right? That's a liability. So as a rental, this is not something I would be interested in.
However, we're looking for value. So let's scroll down in the pictures. This obviously
then is not going to have the exact same value, but let's get off of that pool (···1.0s) and
then like the fourth picture down, and let's just scroll them either way, however you
wanna do it is fine.
So that's not a closeup shot. Yeah, um, that's kind of, that's older. What, and that's
flooring. So that's either tile or the um, luxury vinyl plank, right? Can you see that?
(···1.3s) And that's the house. This is, you know, barely a pitched roof. This is the kind
of house I grew up in by the way. (···0.9s) And so the flooring, they painted it gray.
Um, you know, the windows are on the newer side. It has ceiling fans. That's surprising
that they are able to put chairs in a bedroom. Now (···2.0s) I grew up in this
neighborhood, let's just say, and my bathroom was pink and blue and it was that shade
of blue. (···0.6s) So we can safely say that this property has not been fully rehabbed. I
pointed out the paint, I pointed out the windows and I pointed out the flooring.
They have not redone this bathroom. (···0.7s) Now, (···0.8s) I mean I can't even say
that it's retro, you know, I mean you can't get away with that by any stretch of the
means. So this is definitely, we need to understand that if we're trying to compare what
our house will be worth once it's fixed up, we would fix up the bathroom. So this isn't an
exact comparison, but nonetheless we'll keep going.
So that bathroom has not been rehabbed (···0.9s) other parts of the house have,
(···1.0s) okay? (···1.9s) Okay. (···0.8s) Now this is likely that they added this second
bathroom and that's why it's newer because our house that we're looking at only has
one bathroom. This said that it had two, so this was likely an addition. And so that's why
this has been modernized. You know what's interesting though, Bradley, is that that size
tile is not really that popular.
Now I wonder on the wall, I wonder if they did that to make it match the old blue tile, you
know, to make it fit in with the era of the house. I mean the fixtures are, you know, It
could, it could also be that, uh, and I had a property here in Florida with these lovely old
Florida tiles like that, that, uh, and I found the painter that they actually would paint
those type of tiles.
So they may have done some, some rehab work without trying to do a full rehab to the
bathroom. So maybe that could be it too, Could be. I have a feeling this was an addition
only because back then they only had one bathroom houses for the most part. But I
could be wrong. And you're right, it's funny because I've seen that tile painted and I
don't know if you can tell, but usually they do it white. And the reason that I can tell is
because you, the tile is white and the grout is white and that's why they use white
because they have to spray it.
Can you imagine if they had to, you know, tape the tile so that they didn't paint that, you
know, that color, what have you? So I, I literally have been able to tell it only because I
know if I didn't know then it's likely, you know, anybody cruising through might not even
know that. But I am able to detect because it generally is just completely painted over,
which is fine. But anyway, that's a newer bathroom, so that's a good thing. Okay, next,
(···2.2s) what's important when we're looking at houses, (···1.0s) kitchens, and baths,
right?
So here's another bedroom. That's interesting decor, isn't it? This is the second
bedroom, by the way, did they have two twin beds? (···1.3s) Its interest. (···0.6s) Oh I
think it was Christmas time (···0.8s) when they took these pictures. Okay, living room,
which actually this might once upon a time, Bradley (···2.2s) is the car in the front of the
house. Okay, so that's a picture window. And so then the back has sliding glass doors
out to the pool.
I was confused for a second, okay, I wondered if that was a screen porch that they
enclosed, but likely not. So there's your um, sliding glass doors. Do you know how
expensive those suckers are? Hurricane impact sliding glass doors and some houses, if
they have a pool will even have like a triple or quadruple um, door. Oh my gosh. It's like,
do I put it buy a new car or do I put, you know, sliding glass doors in my house? Okay,
so this is, we call this in Florida a Florida room.
People also call it a great room, you know, but it's kind of a combined living area.
People nowadays, you know, don't use a formal dining or excuse me, a formal, um,
living room as much as they used to. It's interesting too because (···0.9s) you know, I
don't know if this was a homeowner who owned this house, but (···1.3s) so far we
haven't gotten to the kitchen yet. Everything looks like it's been remodeled except for
that bathroom. You know, that's really a deterrent relative to everything else in the
house.
So here we go to the kitchen and I was gonna say, I was obviously glancing down at the
other pictures and I thought that I could tell that it had been rehabbed and it has. And so
that's your big farmhouse sink, you know, and they did two-one cabinets. So you see
the white on the top, the, what you call that steel gray. And that's either granite, marble
or quartz, what have you. Um, obviously the stainless steel appliances, so wouldn't you
say Bradley? And that's obviously a nicer range by the way. Um, a gas range, you
know, everything else in the house looks good except for that one blue bathroom.
It is interesting to me. I wonder when they bought this house, 'cause I, I don't know that
an investor bought it. I think if an investor bought it, they would've redone that bathroom.
Um, but anyway, I would say that this is a comparable house, okay? And this selling
price was at four 80. (···0.9s) So it says the estimated value, but we don't wanna go by
that. The selling price yeah, was four 80. And so we want to include this as a comp.
We will remember though it has a second bathroom, but one of those bathrooms hasn't
been rehabbed and it has a pool. So it's not identical, but it's close enough in many
other aspects to use it as a comparison. (···0.5s) So the next one we see was even, and
by the way, you can click on these headings, like if we wanted to see the most recent
sales, you can also click on the sale price or excuse me, the date, that type of thing. So
we see this other one here, so you wouldn't know this, but 59th Avenue, well I guess
that's right, 61st street and 59th Avenue.
That would be close enough. But then the one 13 to the fifth lane. So I happen to know
this area because I grew up there. It was a very weird area where you had, um, the city
of Hialeah had the west, but across the street was considered um, unincorporated. So it
wasn't really city property. And so they had northwest street signs and so literally across
the street could be a 57 when you're on a street, that's really only five.
So that might be closer than I think if we scroll over to see, um, what the distance is on
that one. So it's a three. So the distance is 0.1. So that's obviously gonna be close. If
you didn't know that area, that would be very difficult for you to dis if they didn't give you
the distance. There again, it says no pool. What else?
That sold for significantly less. Um, priced per square foot 2 84. (···0.6s) Okay, let's go
ahead and click on the, well actually let's look at the square footage too, just to be sure.
Is it a three one, (···1.6s) is it a three three? I (···0.6s) don't wanna look at that one. The
square footage is a little over a hundred square feet. That's not that much bigger. The
lot is the same size. 1954. Let's go ahead and look at it. I lied. (···2.0s) I wonder what
they did because those houses typically would have been a three bedroom, one bath to
do a um, a third bath is kind of unusual for that area.
This is common. You guys may be thinking why is there so much concrete? Well, in
Miami there is a, um, high Hispanic influence and um, it was very customary for them to
not want the yard and to literally have a poured concrete front yard. This one again has
a pool after it said it didn't.
(···0.9s) So this looks like it's been rehabbed, but (···0.5s) is there another picture of
that bath? (···0.7s) Yeah, (···0.8s) that's kind of odd. (···0.8s) They, they redesigned
that bathroom. Um, but if you see it, it does have the glass tile. Is that like a surround for
that tub? No, it's an entrance. So I guess it's not, it's kind of weird. The pictures too don't
make it that easy for you to figure out the exact layout. I'm guessing that was an
addition, but they were, it's kind of odd space there I think.
(···0.5s) And so this is likely right off the master bedroom. They have the barn doors. I'm
sure this was probably an addition. They have a couple pictures on the wall. What do
you think there, Bradley? (···2.1s) Likely family photos (···1.0s) washer and well that's
attractive. Who wants to look at the washer and dryer every time you go to get a drink of
water? That's kind of interesting. Well that's Why you put the, you put the pretty
magnets on there to try and camouflage your washer and dryer next to your, hey,
maybe it's a, maybe it's a garage fridge.
We'll, we'll we'll Keep that. I was thinking that too, but (···0.7s) I don't have a stainless
one in my garage. (···1.8s) Okay. The kitchen has obviously been redone. Okay, red.
That's an unusual, well, not that unusual I guess choice. Okay. The tile, you can see it's
the big modern tiles. Um, that looks good, right? Modern. (···1.3s) Modern. (···2.1s)
That's the front.
(···0.9s) Nothing special. (···3.0s) And the, (···0.5s) the fencing is not that unusual for
that area either. (···0.8s) So I wouldn't, they didn't show all three bathrooms. I wonder if
that's even an (···1.1s) error. Just like the um, pool didn't (···0.6s) show in the listing. I
believe this, (···0.6s) let me pull it up. The one that had that strange shower in it.
(···0.6s) Yeah, I think this is probably, 'cause the one before it, if you look this is a tub.
So this is a different bathroom. It is, yep, you're right. But it set three and we only saw
two. (···1.5s) There might be one off the master. I don't know. This to me looks like this
could have been a non shower (···0.8s) that they just put this little tile floor and a drain
in and so this could be a bathroom that was a closet or something before. Yeah, be uh,
like I said, the layout even looks a little strange to me too, so I'm kind of thinking that
they definitely did, did some reconfiguring there so we could say that that is likely a
comp.
Okay, let's scroll through. Let's find one that we wouldn't use as a comp. So let's look for
one of the lower amounts. There's one for 3 35. Do you see that one? Let's click on that
one. Um, A three one. And (···0.7s) it sold this year. So two, three months ago. A
(···0.6s) three one little bit smaller.
(···0.9s) Same size lot (···0.6s) close enough in year. (···1.0s) Same. Oh that's, oh
yeah, that's still fourth edition. Okay. Um, and that one's a little bit further away. So let's
go ahead and click on that one. Hopefully it, you'll see the difference of it not being a
comp. Oh, are there no pictures (···1.8s) man. Okay. Um, what else is low? (···0.8s) Oh,
what's that one at the very bottom? Um, the one, yeah, No Pictures.
So that (···1.1s) one it sold for a hundred and thirty two eight (···0.7s) Oh no pictures.
Gosh darn it. (···0.7s) Yeah, without pictures. And the reason that's duplicated by the
way, is we put public record and m l s oh we didn't at the top, that's why we did not.
That's okay. Um, these are just on public record but usually that also encompasses the
m l s. (···1.0s) So how out on that one for 3 32 bad, there aren't pictures. Now we're
gonna stop here.
I think you guys get the idea. But if you really wanted to take it further, you can also go
to um, like zillow.com or even Google the address. And if it's been listed recently, which
it has, you know what, let's go ahead and try that one for 3 35. So can you please
Google 58 70 Northwest a hundred and 10th Drive Hialeah, (···0.8s) if we can Google
that. Sometimes what'll come up will be like a Zillow listing or Redfin. I've had luck with
Redfin when I'm doing that.
So here's a realtor.com, go ahead and click on that mark six 2021 and under that is
Redfin. See I don't make everything up, (···1.1s) but there's no pictures (···1.3s) are
there. There just sold. Okay, go ahead and see. Is that like a video tour? No, (···1.3s)
It's just the Google map view. Oh, gotcha, gotcha. No, I don't want that. Go back and
see if we can click. There's no pictures, right? Let's see if we can click on, um, yeah
Redfin, see if they have them.
(···1.7s) Street view. Nope. I wonder why they're not there. Anyway, that's an option.
Sometimes you'll get lucky in that regard and for whatever reason I said I've had better
luck with um, Redfin. Go ahead and you can try Zillow. (···3.1s) They at least, well it's
just a better view but it's a property. Um, don't ever use these estimates even on, you
know, prop stream, don't use the dollar amounts, they're not always comparing apples
to apples. But I wanted you to see an idea of some of the factors that you need to make
sure are very similar.
So you're comparing apples to apples. That property for 3 35. (···0.6s) My guess is that
it (···0.7s) was likely not been rehabbed and then once it rehabbed it was up in the 4 50,
4 50 (···1.2s) plus range. And so that was kind of one of the messages that I wanted to
be clear with you. You know, make sure you're comparing apples to apples kind of on
every level. Okay? So thank you very much for that.
I think, oh, there's one other piece we'll come back to. Yeah, (···2.4s) so don't go too far
with that if you don't have to. (···1.5s) Okay, so that's how we get our after repair value
in this case. I'm not trying to teach you math, so I'm just going with easy numbers. So
our after repair value, I told you how to get it, is 200,000. So purchase closing cost. How
could we get this information? (···1.8s) Let's ask the title company or closing agent.
What typical purchase closing costs are going to be. (···0.7s) Now typically total you're
gonna see generally three to 5%. (···0.7s) The other piece that you need to factor in,
that's from a title company or closing agents, but that does not include financing.