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Speaker 1 (00:00:04):
Hey, good evening, everybody Peter Beck. So many here. Sorry about that. We’re running a little bit behind trying to get my hair fixed, looking through zoom, trying to get all the basics. Sorry. We’re bouncing between lake house, our main house here. And, uh, just got a little bit hung up. But, uh, anyway, it is Monday. It is Tuesday. It is Tuesday night live. I’m so, so glad you guys are here. Very excited. Ju uh, Julie will be joining me here shortly. We’re going to talk some basics today, and if you ever hear me talk about real estate in general, the biggest thing I hit on, um, uh, literally the biggest thing I hit on is the basics. You know, I think people tend to, uh, over analyze this business. I think people tend to overthink in this business. I think people tend to go too wide, meaning having too many things spinning in terms of different techniques, they’re trying different strategies, they’re trying, um, all that kind of stuff. And, uh, and I always tell people it’s, you know, you figure out a couple of basic things and then you just get very, very good about it. And that’s what we’re going to be sharing with you today.
Speaker 1 (00:01:32):
Sorry about that sneeze. So we’re going to talk a little bit about the basics of real estate investing today. We’re going to talk about paperwork today. I know it’s, um, it’s not one of the, like the cool, sexy things to talk about, but, um, it’s an important thing to know. It’s an important thing to understand. I’ll um, we get rolling here in a minute or so I’m going to share with you guys a story where I literally thought, because I didn’t understand paperwork. When I got started, I thought I was gonna end up in jail. I’ll share with you that story of how that all came about, but, um, being brilliant, the basics, and that’s the topic of tonight, you know, we’re going to share with you how a contract can actually make or break a deal. Uh, we’re going to share with you the important points to have in a contract.
Speaker 1 (00:02:29):
And, and then we’re actually, excuse me, we’re going to walk through a real life contract with you guys. So you understand, you know, contracts are tools. You know, people don’t understand sometimes that they think contracts are kind of like the necessary evil of the real estate investing business. And they’re not they’re tools. And just like any tool you can use it to your advantage, or you could use it to your disadvantage and, and, and contracts when they’re the right kind of contract to use. When they’re used correctly, contract literally gives you an edge in this business. You know, you always hear me talk about it. You know, there are shortcuts. I talk about shortcuts all the time, shortcuts to success, you know, shortcuts to getting things done and in contract is not an equal thing. Contract is not one of those, you know, uh, things to, to, to walk away from, or to be scared about. Literally contracts is a tool. That’ll give you an edge if you know how to correctly use it and execute it and all that. And we’re going to get into that here in just a little bit. How are you doing Julie?
Speaker 2 (00:03:42):
You’re on mute. Rookie move, rookie move. So, um, yeah, doing good. Sorry. I’m late guys. I was wrapping up a phone call and I’m like, literally was on hold for an hour and 45 minutes and I was not giving up today. That’s crazy.
Speaker 1 (00:03:59):
Like, I don’t understand why all companies do not have one of those callback features, you know, hit one and we’ll call you back. They’re like, I I’ve seen all. I remember when we’re traveling a couple of weeks ago or Crenn Ben that our partner with driven, he was on hold with Delta, how long they get with seven hours, seven hours. So that is crazy. Crazy, crazy. Anyway, guys, my name is Peter. Excellent. Other side is Julie muse. Julie and I have been together for over 10 years ago, building the real estate investment business. And that’s what we are. We are real estate investors. We have done all kinds of things in real estate, all kinds of transactions, all kinds of techniques. Uh, but we also figured out what our lane is, what our strengths are. And we have absolutely, I hate to say things like this, but I would say we’ve been hitting it out of the ballpark strictly from being a real estate investors.
Speaker 1 (00:04:52):
Uh, for many, many years, you know, Julie single-handedly ran the operation as the, as the chief person in charge. She’d build out tons of infrastructure. I mean, I share this with people, uh, not in a pompous way, but just kind of in a little bit in the credibility way. There were times when we’re running our own investment company, we were having almost a thousand seller calls a day. Can you imagine having, you know, some of you guys are trying this business out, right? And you’re like, how do I get the phone arraigned? Can you imagine having the phone ring a thousand times that creates different kinds of problems? You know, so one kind of problem not having your phone ring, but having your phone ring a thousand times a day, that’s a totally different set of issues.
Speaker 2 (00:05:33):
Absolutely. Because whenever a seller calls, you better pick up the phone because that’s money calling you. And that’s a good piece of advice today. If you’ve ever got a seller call, you keep up with your phone numbers and whatever you do, never let it go to voicemail.
Speaker 1 (00:05:49):
And the other thing to expand upon what Julie said, you better have your ducks in a row, not just from a standpoint of picking up that call, but can you imagine the kind of deal flow you’re going to have? And, and can you imagine the tools and resources you need, and this is going to go along with exactly what we’re going to share with you today, more specifically, Julie, that contract’s a tool yeah. Or have the right kind of contract when you’re talking to that many sellers and when you get deals going and you better bottom line is you better position yourself to win from the very beginning part of the real estate business from the beginning part of the real estate deal. And that’s what contract does it positions you to win? It really does. Some people will say, well, how is that possible?
Speaker 1 (00:06:33):
What we’re going to get into that here in a minute. And you will see how literally the, what the tool, the contract that we use that we’ve been using for many, many years, even before we started partnering with people, it literally gives you an advantage and it gives us and our partners an advantage as we put real estate deals together. But before we get into specifically discussing contracts, that advantages of contracts, you know, we’re how to correctly interpret them and how to read them. And really what a contract sold about. Um, share a little bit about like who Julie and I are. Not only from a standpoint of real estate investors, but how did we even get here? Like how, how is it that today years ago we would have our phone ring a thousand times personally, for us to do deals today. We don’t have our phone ring at all, looking for deals, but how is it that we’re still knocking it out of the ballpark and doing deals?
Speaker 1 (00:07:25):
Well it’s because the model that we have, and our model is very simple. We do not chase our own deals. We work with partners everyday people across the United States. And we invest our time, our money, our resources, our infrastructure, our things like contracts into our local partners. And we help them become successful. But in turn, by helping our partners become successful, we in turn become a successful ourselves. And that’s what the partner driven model is all about. We here at partner-driven, we literally provide what we call are the pillars of success when it comes to real estate investing. And, you know, I used to draw them out. There’s a lot of things we do, but here’s the three main ones, you know, as I, as I started focusing like, uh, what are the three main things we do? We’ll do a lot, you know, we provide like the back office and all this, but what are the three, three key elements that we provide to our partners?
Speaker 1 (00:08:15):
So I think this is what they are. Number one, they Bailey coaching, mentoring [inaudible] instructions. So we over-deliver, I know we over deliver when it comes to, to mentoring our partners and coaching our partners, because that is a key pillar of success. If you do not know what you’re doing in the real estate investing business, you are going to be at a huge disadvantage because tonight is all about advantages and disadvantages. A lack of knowledge, not only will give you a disadvantage, but will potentially put you in a position where you never make anything happen in this business. And potentially put you in a position that I was found myself in many years ago, by not having the knowledge and not only did I not get anywhere, I literally went backwards. The second pillar we provide is we help with lead gen. It’s very important in this business.
Speaker 1 (00:09:03):
It’s not just knowing something. If you can’t find the right deal, you’re in trouble. And I can tell you, there’s a lot of people out there that do real estate business that get to the point of doing months, single deal. They never get to a point of even identifying a deal. Lead gen marketing, finding the right deal is an art form. It literally isn’t in real estate. And so not only do we teach our partners how to find amazing deals in their own marketplaces themselves, but we also, we also literally have a proprietary CRM system that works on our partner’s behalf and helps them identify potential, uh, motivated sellers in their marketplace. And the third pillar that we provide, which is very, very critical and very, very important is we provide the capital to execute the deals, you know, in today’s marketplace. I could tell you the date and I would share, I’ve been talking about this for like a month straight, but the days of the days of like no money, no nothing.
Speaker 1 (00:10:07):
They’re going away quickly. I mean, they’re literally going away quickly. You know, whereas before there was some techniques and strategies that people utilize that, you know, allowed them, allowed them to get into deals like wholesaling, right? People talk about wholesale. You don’t need any money. That’s just not true anymore. And a lot of times you’ve got a double close. So anyway, the third piece that we provide is we provide capital, both short term, a little bit longer term on the fix and flip. And then we put these properties in a market, sell them, and we split the profits down the middle 50 50, and that is the partner driven model. And it’s interesting. I didn’t even realize this truly. We weren’t even called partner driven until we started this model. It’s like before then we had a totally different company. Just hit me today. I’m like, gosh, I’ve been at this thing for 22 years. And we literally changed our company name. Now it’s just so common. Cause we say it all the time, but we weren’t even call driven years ago when we were.
Speaker 1 (00:11:00):
Um, anyway, so, so we are, and that’s what we do by the way. If you’re not a partner, if you’re not on a team today in what we just said, sounds very like intriguing. I just want to let this, I just kind of want to get this out of the way right away. Um, there’s some team members on standby today and if somebody could put their phone number into chat, but we have a couple of team members on standby that could actually more elaborate on what the partner driven model is all about. Some of you guys tonight here are like for the 10th time here and you’re like, I got to give them this thing. So the phone number to touch base with our team members is 7, 7 0 7 4 6 8 5 8 5 that’s 7 7 0 7 4 6 8 5 8 5. And we have some numbers on standby that I’ll answer and be more than happy to elaborate on what I just talked about and potentially get you started in, uh, and be part of the team as far as doing deals together.
Speaker 1 (00:11:54):
All right, well, let’s get it. Let’s get going. What we’re here to talk about today, I’ll be honest with you. Like from my perspective, I don’t know anybody like that ever got into real estate for one reason. And that is this man. There’s a lot of contracts that fly back and forth and I’m just trying to figure out where w oh, I want to get into real estate because I love contracts. Okay. I just, that doesn’t happen. Right? Anybody that loves contracts, they might get into the law industry, right? They might get into some admin work, but nobody ever says, huh, I love paperwork. I love contracts. So let me choose the real estate investing business. Having said that almost every single one of us that gets into the real estate business that gets beyond the kind of just trying it, but gets to the point where we actually started doing it.
Speaker 1 (00:12:46):
A hundred percent of us encountered this hurdle. And I say hurdle, because really, if you think about it, we don’t deal with too many contracts outside of this. Like when do you deal with a contract? Maybe if you buy a car and you get financing loans, last time you read a financing contract, right? So before real estate, most of the time we’re most people like myself signed contracts. It was just like, you know, you’re buying something. You never even read these contracts. You never really understand what you’re signing because there’s one of those, there are standard. You kind of need, okay, I’m getting buying a car. I’m paying, you know, 20,000. I’m going to pay $300 a month. You know, they, they let out, they put these summary pages in them and across the board. If you think about it, when was the last time you were involved in signing a contract?
Speaker 1 (00:13:31):
You know, you buy a phone, a cell phone, you know, sign, maybe a two-year contract. Have you ever read it? No. So when we get into real estate business, we encounter something that for many of us, we have never encountered before, not the contract, but the fact that we better understand this contract. This is not a contract that you want to just kind of sign away. This is not a contract that you better just kind of like, oh, I don’t care if it says 30 days or 90 days, you know, no, I don’t care if you know the owner of the property signed it or his son signed it. You know, he’s going to just tell them about it. There are some mistakes that can be made in the contract that could be very detrimental to the real estate deal itself happening. Having said that if you do understand contracts and after today, I think most of you who who’ve never seen us talk about contracts and not ever see us actually explained the contracts after day. A number of you guys will see that this is, it gives you an advantage. A contract literally gives you an advantage in the marketplace. Now let me tell you a personal story of how I learned about contract cracks and not that I learned, but how I was really excited, close to it. And, uh, I don’t know. Do you know, do you know what you’re Lanka Julie?
Speaker 2 (00:14:46):
I do. And his lovely wife.
Speaker 1 (00:14:49):
Yes. Well, with the, well, when met Mike, believe it or not, I don’t know if you know this, but Mike actually precedes me. Is that the word precedes me, precedes me. He’s been around this business longer than I have. And I’ve shared this story in front of Mike, so I’m sure he wants to share it. But Mike, Mike has actually been in the real estate. I think he’s actually out of the industry right now. But Mike was a big time wholesaler when we got started, when I got started 20 some years ago in a real estate. And as a big time, the wholesaler, the one thing that happens all the new beasts get attracted to you, right? Because you don’t really understand what being a big time wholesaler is. You just like, look, you look up to those guys. And you’re like, wow, he’s moving a lot of inventory and all this.
Speaker 1 (00:15:30):
And I did, I did exactly that. I started looking up to him. My kid didn’t know who I was. I was following his deals. And you know, and, and I, I didn’t know much about a lot of things, but one day I put an offer on one of his deals. Right. And remember, back then I knew nothing. Mike knew everything. Okay. I put an offer, you know, I, I, it was all flat back then. It was all flyer based. You know, I kind of fax them back, said, Hey, I want to put a flyer in on this deal. Next thing I know through my fax, five minutes later here comes to contracts. Right? And it had exactly what I said, you know, I’ll pay, I don’t even know what I was paying 50, a hundred thousand dollars on it. And that was literally the only thing I looked at.
Speaker 1 (00:16:11):
Like I said, I want to pay 50. And on this contract, Mike put down $50,000. But because I had no experience because before then I had already done a couple of deals, but they were all with real estate agents. And that’s another story unto itself, how I mismanaged those projects. But when I was working with real estate agents, it was just like standard contracts there wasn’t really, you know, I just kind of felt like, well, at least they’re licensed or funny, not gonna, you know, do anything bad to me. So Mike was like the first real life person I was dealing with to do it, to heal outside a real estate agent. And I didn’t know anything about contracts because even the ones that realtors provided me, you know, they’re like, Hey, this is a state issue and you just go sign it. I’m like, okay, got it, got it.
Speaker 1 (00:16:54):
Got it. And so I made an offer and Mike faxes, me a contract pretty much all filled in. And, um, and the number was exactly what I said. And I was, and that’s the only thing I looked at. Like literally I didn’t, I didn’t understand anything about due diligence. I understand about expectations. I just thought, Hey, cool. We agreed on a, and, and he asked me to fill in a couple of things and I did fax it back to him. I kid you not five minutes later, I got a contract fax back. I mean, I get a fax from Mike and it literally says, I heard they serve good food in jail. Uh, on looking at this, that I’m thinking, I know nothing.
Speaker 2 (00:17:42):
No, Mike’s that Mike sent you, that
Speaker 1 (00:17:45):
Sent me a piece of paper saying I heard they serve good food in jail. And, uh, and remember I’m newbie. I don’t know what’s going on. All I know and I’m falling in, right? Cause when you don’t know something, you fall into it, right. You fall into it’s strictly based upon respect. And I had respect from like, so if he said I’m going to jail, I respect. I was like, I’m going to jail. Right. Make a long story short. I just had filled out a couple of things incorrectly in the contract that he was messing with me. He was absolutely not kidding, but absolutely bullying me at that point. Right?
Speaker 1 (00:18:19):
You don’t know how to correctly execute contracts. If you don’t know how to correctly use contracts to your advantage, you will be bullied in this business. You will be bullied in this business because from the get-go, you’re either in, at an advantage or you’re at a disadvantage. You know, when you start negotiating, if you ever heard me teach negotiating, it’s all about just moving the needle towards you, moving the needle towards you, moving the needle a little bit again, advantage or a disadvantage and make no mistake about it. The contracts are exactly that. You’re either going to be a disadvantage. If you don’t know how to correctly read it, interpret it, see any kind of, you know, caveats in it. Um, but if you do understand it, you can get a leg up literally, literally from, um, the get-go what Julie’s and Juliet are gonna actually walk people through the contract tonight.
Speaker 1 (00:19:12):
Okay. What Julie’s going to share with you guys tonight is not only, um, how to interpret it correctly, how to position yourself correctly with it. But she’s going to share with you something that we’ve spent 10. Now, when you guys can look at this, you’re like what? I’m not kidding. We spent tens of thousands of dollars correctly getting the verbiage initial, explain you in which areas paragraph it’s great, but this one paragraph, and it has no question made us millions of dollars. This one quest this one paragraph that, that we spent like $30,000. Having a very high level attorneys write up has made literally millions and millions of dollars. So when you’re sitting here tonight and you’re like, oh, this is kind of boring. I’m telling you, it’s not whether it’s boring or not. It’s whether or not you’re going to use it to your advantage and make a lot of money with it and understand it, or whether somebody else is going to use a contract to their advantage.
Speaker 1 (00:20:12):
And it’s going to put you at a huge, huge, huge disadvantage. I will tell you from a personal perspective, this is why I also love the partnering model because when we’re partnering with people, our office provides all this, our office handles this. Our office is able to, uh, you know, do this for you on your behalf. So when you’re going to go see a seller, it’s handed to you right on the platter, um, and, and all that. So I’m going to flip it over here to Julie. And Julie’s going to walk you through this, uh, contract. And, but the key is, look at the big picture. This is an absolute pillar of success in real estate, understanding how to correctly utilize a contract. So without further ado, Julie, what you got for us.
Speaker 2 (00:20:59):
Well, you know, the one thing too, that I, that I want to add on this concept while I’m pulling this up for you guys, and this is our contract. So if you were a partner, you’ve got 100% availability to get this contract. And not to mention, all you got to do is email our office and we’ll even fill it out for you. Okay. Um, but on top of being bullied, here’s the other thing. Sometimes I deal as a deal because of terms and not because of the money. Okay. So understanding a purchase contract too is in and knowing what you can take away or what you can add is, is truly important. Because some things, if you take it out, then you’re not legally doing something correctly. So I’m going to be going through that. We’re going to be going through it line by line.
Speaker 2 (00:21:51):
Now I’m going to share my screen, guys. I’m going to take off my video here for a moment. Um, it’s just gonna make my internet better. Um, can somebody give me a shout out and tell me yes. You’re seeing my screen pretty, please. Okay, perfect. Perfect. All right. So as you look at this contract here, guys, um, the purchase contract we use is only a page two pages. Okay. So this is something I like this particular contract, because it’s really easy for a seller to understand this particular purchase contract. Right. So that’s why we use it. However, if you don’t understand the contract yourself, how are you ever going to answer questions from the seller? Okay. So I’m going to go through this line by line tonight and explain to you every part of this contract. So hopefully if you’re ever caught in a situation, you will, you will know exactly how to answer these questions.
Speaker 2 (00:22:56):
Okay. So from the very beginning, um, dated this blank day of blank, 2021. So obviously here, um, what’s today, the 24. So day of the 24th day of I’m just going to fill this in as we go 24th, day of August, and then here, um, if you are the buyer, okay, then the buyer goes here. If you are a partner at partner driven, our company goes here, but we’re just going to name one, um, name, a company here. So this is going to be whatever your, your LLC is under. Um, you can put your personal name here, but God’s, if you’re going to be doing real estate transaction, it’s not really suggest you do an LLC. It’s not very hard to get one. So we’ll just call this one, two, three, LLC. Okay. Hereafter. And, and you’re going to be putting the sellers information in here. Sorry. A piece of this contract is missing.
Speaker 2 (00:24:09):
No, it’s not sorry. And, um, whoever the sellers are, so let’s say it’s John and Anita Smith. Okay. And guys, I may top this, obviously I wouldn’t send a seller out like this. I want all my letters to be correct here. I’m located at, that’s going to be your address here. Um, let’s see. 1, 2, 3 main street gangs. Ceville Georgia 3 0 5 0 6. So you want the full address here? Um, the other thing is, is when you’re doing these, it feels, say there’s different, uh, font sizes and different fonts. You want to make sure that all of that is the same, um, okay. Gods in a regular wholesale deal. Generally what you’re doing is you’re getting a property under contract, like what we’re talking about, and you’re actually assigning the contract to an end cash buyer. Okay. So in a wholesale deal, you’re getting in under a price under contract for this price, and you’re selling it at a higher price to an end buyer.
Speaker 2 (00:25:28):
Okay. Now I want to help here with some, a little bit of terminology for you guys. When you are wholesaling, you are not selling a house. You are selling the equitable interest in the property. The equitable interest in the property is obtained by putting it under contract. Okay. Only licensed individuals in real estate can sell real estate for someone else. Okay. So I see a lot of people, um, that are fairly new to this business and they’re like, Hey, I got a house to sell for an investor. You do not have a house for sale. You have equitable interests in a contract to sell. Okay.
Speaker 2 (00:26:11):
So, um, just want to make sure everybody understands that. So this, um, assignability part, this contract is fully assignable. This is what allows you to assign your equitable interest to an end buyer, which means you’ve never closed on the property. You’re aligned Adam on a settlement statement, just as anything else on a sediment statement. So that’s where your funds are going to come from is an assignment. And it is assignment fee. Okay. So if were assigning your contracts, this can not be removed. Okay. Because this is what’s given you the ability to do so now for those of you at partner-driven, if we are pre-listing the property, um, onto the MLS to procure a buyer and we’ll get into this later on this contract, this actual symptoms can be taken out because we are not assigning properties. We are double closing properties. Okay. So just, I want everybody to kind of understand what things you can and can’t take out, um, of these contracts purchase price.
Speaker 2 (00:27:22):
Um, that’s where you’re going to enter the amount here. So let’s say I’m buying this property for a hundred thousand dollars, okay. To be paid in us funds, um, put a period here, terms cash at closing guys. That’s just something thrown in there because we tell him we pay an all cash. Um, but either way, either way, um, gods, um, on here, they’re going to get the same type of funds, whether you’re paying cash or whether it’s alone. Anyway, they’re still going to get money deposited into their camp. Now here’s the most, most important things inside of a contract. So remember I was telling all y’all about sometimes the terms in the contract are as important as the price itself. So during a contract, there is something called a contingency period, a property inspection period. You’ll hear it referred to as DD or due diligence.
Speaker 2 (00:28:23):
This is the amount of time that you have to have the property inspected and the time that you have to back out of the contract. Okay? So let’s go through this property inspection buyer. And obviously if there’s no number here, then it’s, this paragraph is not applicable. So you definitely want to make sure you put a number here by your at buyer’s expense. That would be, you shall have blank business days after the inspection here up to have the property and all the improvements, fixtures and equipment inspected seller shall cooperate and making the property reasonably available for such inspections. Okay. So I want to put 30 here. Now, why would I want to put 30 here?
Speaker 2 (00:29:16):
So 30 days, okay. Is the amount of time that I have, if I’m wholesaling to fond another buyer, also, if I’m buying, fixing and selling a house that gives me a little bit longer to have all of my inspections done. Now I did add this little word here, which has business dates. I did slot that in, because what that does is that gives you a whole nother 2, 4, 6, 8, 8 more days, um, in your, your, your property inspection period had that word not been there. Okay. It’s also saying that the seller shop cooperate in making their property reasonably available. Okay.
Speaker 2 (00:30:00):
Now buyer agrees to indemnify and hold seller harmless from any injury or damage caused by such inspections. So let’s say you’re going out to inspect the house, right? And the floors walk in, you fall through the floor, you’re holding the seller harmless of any injury to yourself. Does that make sense? If the buyer is not satisfied you with the condition of the property as disclosed by such inspections, buyer may terminate this contract by delivering a written notice of termination to the seller within the timeframe set forth in this paragraph. Okay. So that’s referring back to those 30 business days in which someone can, you can terminate this contract inside of those days, by delivering a written notice of termination buyer’s due diligence period does not start until the day of inspection. Why does this, why does this matter? Um, so like for instance, let’s say you put a property under contract and it’s tinted, occupied.
Speaker 2 (00:31:11):
Okay. And you’ve agreed on a price you’ve seen in the outside, but you, but you’ve got to be able to get in there to see the house. Right. Well, what if the, the, um, seller has a hard time getting the tenant to let you in? Well, if what that’s doing is that’s eating up all of your inspection period. So what we’re saying is, is that the period does not even start until the day of the actual inspection. I’m actually working on a deal right now where w with someone, um, and we put the property under contract because the lady needs to move from Florida to Alabama. Unfortunately, her daughter’s sick. So she needs to sell her house quickly. So she left and went to Alabama last week. So we haven’t been able to see the house yet. Well, she called and said, Hey, I’m going to have to be here a couple more weeks.
Speaker 2 (00:32:09):
I got some things to take care of. Of course we were like, no, that’s no problem. But our inspection period does not start until we go and inspect this house. Okay. So that’s really important. So if you’re using any other contracts, really try to make sure that you make sure it has such a stipulation, just like this one. Okay. Closing costs, fees and charges buyer, which is you is responsible for the owner’s title, policy, title, search policy, title, search charges, recording, and any other fees needed to secure the title. So this is closing costs here. So I’m say we’re paying all the closing calls buyer, which is us, is responsible for buyer’s inspection buyer’s attorney’s fees and all property related insurance, HOA, condo initiation, and transfer fees. Seller is responsible for documentary stamp taxes. And surtaxes on Bates seller’s attorney fees and HOA condo estoppel fees.
Speaker 2 (00:33:11):
Okay. So yeah, that was a mouthful, right? So we’re saying to you that we will pay all the closing fees, but we are not going to pay your taxes. Like, let me give you an instance. Here. There are transferred taxes in a lot of states. So we, all the seller always pays their own taxes, um, in the state of Florida, again, um, they do not have state income tax. So when you sell a property in the state of Florida, there is a tax that is owed to the state of Florida. I believe it’s 95% of 1% of the actual sales price of the home. So if the house is, if you sold it for a hundred thousand dollars, they’re going to be responsible for, I believe about $950 to pay for those particular taxes. Okay. So on a million dollar house, that’s a lot of money, right?
Speaker 2 (00:34:14):
So you want to make sure that they understand and it’s easily when you say, well, you, we pay all the closing costs, but I’m not paying your taxes for you. Right? So that’s where we are. Their title insurance, again, laid out will be paid by the buyer. Taxes will be prorated to the date of sale. And BARR will be given a credit at closing for any, and all paid real estate taxes together with any penalties and interest. Okay. So they’re responsible for their taxes. So generally people will prepay the year before. So like I paid my 20, 21 property taxes already, um, in November. So if I were to sell my house today, then I would actually get a credit back at closing because I’ve already paid the taxes. So, but the buyer is responsible for the taxes from today, um, till December the 31st. So whatever the closing date is, you’re responsible for January 1st to today’s date.
Speaker 2 (00:35:16):
Anything from this date after is going to be the buyer’s responsibility seller will provide marketable title via a general warranty deed with release of title, to buyer or buyers to sign a free and clear of all liens, unless otherwise noted seller is responsible for costs associated with the deed stamp. Okay. So you’re telling the seller here at this point that, Hey, we’ve got to have a clean and clear title. Okay. So you’re responsible for paying for anything to clear that up. So they, so like if our buying a house for a hundred thousand dollars, and let’s say that they had a $20,000 tax lien on the property, but they own the property free and clear. That means they would have to out, or their proceeds of a hundred thousand, 20,000 of that is going to go to pay that lien off the other 80,000 will be what they walk away with minus their taxes.
Speaker 2 (00:36:21):
Okay. You’re also saying that both parties have an opportunity to seek legal counsel and involve them in this transaction. Broker representation, both parties, warrant, they are not represented in this transaction by licensed real estate, broker or agents, and no funds from the sell of this will be paid to a licensed real estate broker and or agent. Okay, because you’re looking to buy this directly from the homeowner. So you’re not using a realtor to buy it. You’re not using your state associated contract. Um, this is a contract between you and the seller. The parties agree that the closing will take place on or before blank business days. I usually put 45 days here. Now I want, so when you’re looking at your due diligence in your inspection period, in your closing day, the inspection period is inside of the 45 days. We will, you will close on or before 45 days, but 30 of those days or whatever number you put there is inside of the closing date. So if I were to say, okay, well, I need to close in 30 days. Okay. And a 15 day inspection period. You can change these numbers around, depending on the situation. But again, like I said, these particular days, um, allow you more time. And again, sometimes that is more important than anything else. Okay?
Speaker 2 (00:37:57):
Fixtures, this, this cell shall include any and all fixtures to the property included, but not limited to the heating and air conditioning equipment built appliance, curtain, curtain, odds, attach carpeting attached to mirrors and light spring storm doors, um, garage door openers, TV, reception systems, outbuilding, and exterior plants and trees except as follows. So any of you that are licensed, um, um, individuals I’ll tell you, it seems like about a third of your class is on this particular subject on what is a fixture and what is not okay. If it is attached to the home, that is a fixture. So why does this matter so much? So the best way for me to explain it to you is, is through a deal. I was doing a deal one time and I was going to buy the property. And this is another good piece of advice. If I went and seen that property, um, you always go buy that property and do a walkthrough before you close on the deal, because we had an agreement. Um, we had everything working for us. So I stopped by there before the closing date. And guess what happened?
Speaker 2 (00:39:18):
This dude took out. He took out the stove, the dishwasher, like ceiling fans, all sorts of stuff, because he put those things in that house. So he wanted to take them. Well, obviously that’s a problem for me. Right. Um, that’s a problem for me because now if I were to Bob, that house, I got to go in and now re replace it, all of those things, I’m not doing that. Okay. So I went back to the seller and I went to closing and I’m like, listen, I’m taking $10,000 right off the top of this. I’m not, I’m taking 10,000 off the top of this purchase price. Or I’m not closing today because in your contract, you signed and agreed not to take any of the fixtures in the home. Okay. Um, and he had to do that because by the time I replaced those and pay to my replaces, I was like 10 grand worked stuffing took ’em out of the house.
Speaker 2 (00:40:17):
Now here’s another scenario where you might want to insert something here. Another deal I was doing, they had a chandelier in the house. The chandelier was in the family. So they told me, Hey, um, Hey, um, that chandelier has been in my family. We, we can, we have that. And I’m like, absolutely. I mean, that’s chandelier. It was nice, but it didn’t have a personal effect to me. Like it did them. So essentially I just put chandelier in living room area. Okay. So you can put that in the contract. If they’re going to take those things with them, all representations in warranties, other parties are set forth in this contract and shall survive. The closing. There are no representations or agreements of the parties that have not been incorporated into this agreement, the seller and all provisions here of shall be binding upon to ensure to benefit the parties here too.
Speaker 2 (00:41:19):
And their perspective, heirs, executors, administrators, legal representation, and successors and permitted Assan. So that’s saying they can’t come back on you later and say that everybody that is, has say so in this house hasn’t came forth. Right? Okay. Now here is my favorite part of the contract. Okay. This is where you, this is what allows us to do a lot of things that we do. Okay. So, and if you are wholesaling, you could not remove a marketing clause. You, this is them giving you the authorization to market their property, to other investors. Otherwise, if you don’t have a marketing clause in there, you’re illegally selling a house. And remember what I said, if you are not licensed, you cannot sell other people’s homes. Okay? So you’re selling the rights to the equitable interest in your property. Marketing investor is authorized, excuse me, to market and advertise a property for sale in any media of the investors choosing, including, but not limited to the internet seller.
Speaker 2 (00:42:36):
Also grants the investor to retain a licensed real estate broker of its choice, to list and market the property through any multiple listing services in an attempt to procure a buyer for the property in cooperation with other real estate brokers, investors, and individual buyers seller authorizes the investor’s broker to advertise the property for sale. We literally spell it out exactly what we’re doing. So whenever I do hire, um, a licensed brokerage, um, or an agent that works for the broker, then what I’m doing is, is I am signing a listing agreement between my company that’s on this contract and their brokerage. Okay. Now, once we do that, then I cannot assign a property with, with, uh, with a real estate agent or broker. Okay. Because I have to double close. So I have to take complete title of the property to then turn around and resell it the same exact day or the next day.
Speaker 2 (00:43:42):
That way the, the agent and or broker is following the rules because they’re actually selling a house for me. So they couldn’t close on this house with a buyer in a signage because the listing agreement is not between them and the actual seller of the property. Okay. Um, under special stipulations, this is where you would add any special stipulations like mine. Normally his property will be delivered vacant unless otherwise noted. If I’m keeping a tenant in the property, then I wouldn’t have that in there. Okay. Closing to be handled by TBA. Um, you always, when you’re doing a deal, you always want to control your, your title company and or your attorney. Okay? Not all states use company. Some states are attorney states. I live in Georgia. We just so happened to be an attorney state like New York is, um, parts of New York is an attorney state. So a title company can not close properties here in Georgia. Only a real estate attorney can, but like most places in the U S you go to a title company for a, um, buyer that would be your signature. Or if you’re with partner driven, that would be ours seller.
Speaker 2 (00:45:01):
Hey, this is really important guys. Anybody that is on the title of this house has to sign this. So for this particular contract, John and a need of Smith has to sign this contract. Okay. This will you, you can’t just have John Smith sign this contract because the needed didn’t give authorization to sell. So it would never work out. I learned this one the hard way too, because I had a husband and wife and the husband signed the contract. And, um, he’s like, oh yeah, my wife agrees to it. And this was very, very early on. I was brand new and he’s like, oh yeah, she agrees. She agrees to it. And I just didn’t think nothing about it later. And he’s like, well, show up for closing. Well, you know what guess who didn’t show up for closing?
Speaker 2 (00:45:56):
Nobody. Because the closing attorney was like, Hey, this is not even an executed contract because the other person didn’t sign. If it is an LLC, okay, you’re going to, if, if the property is in an LLC, you’re going to need to look at the LLC operating agreement to see who is in the, off the operating agreement. Okay. Um, so that is the basics of this contract. I know we went over a lot. I’m sorry. God, I’m sweating up. Uh, air conditioner froze up upstairs. I’m like dying up here. So Gordon wants to know, um, Delaware is an attorney state. What if the property is in a trust? A trust is a business. Okay. You’re still gonna need to look at the operating agreement of the trust to see who’s authorized to sign because there’ll be different people that are authorized to sign. Um, if there are, um, if it’s in a trust and the trust has been given to six people, all six of those relatives have to sign. Okay.
Speaker 2 (00:47:15):
Now what I am going to do, Peter, if it’s okay. I know I went over a lot. So there’s this thing, um, on here called a raise hand feature, a raised hand feature. If you raise your zoom hand, what I’ll do is I’ll allow you to come on here, live with Peter and I, and ask any questions that you may have. Um, and let’s please keep it contract associated so that we value everybody’s time on here. Um, so only contract questions will I be taking right now? Um, because I definitely value everybody’s time, especially at seven, eight o’clock at night for a lot of people.
Speaker 1 (00:47:56):
The, is it also caved? They type a question into chat? Oh, absolutely. Okay. So either type it in, and I know we got a bunch of questions already, grace, so,
Speaker 2 (00:48:06):
All right. Once I allow you to talk, then you need to unmute yourself. Okay, Joe, Joe, I just allowed you to talk, please unmute yourself. Okay, Joe, you’re ready. Just unmute yourself. Okay.
Speaker 3 (00:48:25):
I wanted to end up if I signed up with partner as a LLC, um, and I’m a single member, LLC, would I be able to sign the, as the buyer, under the LLC who you’ve addressed the selling property being in a LLC, but what if I want to buy it in that LLC with Peter? How does that work?
Speaker 2 (00:48:55):
So if you’re a partner, Joe, Joe, then we’re buying it in our L L C. Okay. So Peter signature will come to you because once you request the, um, contract from the office, we will send it to you pre um, I don’t know what the word for it. Three X yes. And our agreement or our agreement that we have, um, to do the 50%, you know, split, that’s taking care of with the actual, uh, agreement to join. Partner-driven
Speaker 3 (00:49:33):
Okay. If I am aware of a property right now, that is coming out of an inheritance and none of the kids want it, but I’m not yet signed up for the program. Can that be used as the first property to initiate the payment?
Speaker 2 (00:49:52):
Um, no it not. Okay. Um, and, and, and, and I don’t, it’s, it’s, it takes a lot of time and effort with our staff to, to make all this stuff happen. So that’s just part of the game. Um, so, but now, like, you got me interested now, but so it’s, so it’s an inherited property. Have they been through probate yet?
Speaker 3 (00:50:18):
No. There, um, there’s no probate to, they told the bank to just go ahead and forecloses and the banks in the, of doing it. I happen to know this property very well. Not a lot of investment is needed to turn it around, to put it back on market.
Speaker 2 (00:50:36):
Do you know how much do you know how much they owe on it?
Speaker 3 (00:50:40):
I know everything about it. Julia can talk to you off camera.
Speaker 2 (00:50:45):
Hey, um, will you send her my cell phone number? I’ll I’ll help you on this deal. Okay. Okay. But they’re going to have to go through probate before you can buy this house. Anyway, my question is,
Speaker 3 (00:50:59):
Huh? Th th there is no probate, um, no executor, anything that is just gonna own
Speaker 2 (00:51:05):
It. I get what you’re saying, but for them to walk away with money for you to buy it, you’ve they have got to probate the will. There is no will to probate. Okay. I got you. They have to probate it anyway. Even if there is no will. So they have to say they have to change the ownership from the people that died to the heirs.
Speaker 3 (00:51:29):
Actually, they decided they didn’t want that.
Speaker 2 (00:51:33):
I know that that’s the only way this is going to work though.
Speaker 3 (00:51:36):
Oh, well, the bank is going to be owning it, um, pregnant soon, text
Speaker 2 (00:51:41):
Me, and we’ll talk about it because we’ll table and I guarantee you, I can help you talk to these. I can tell you how they can walk away with a little bit of money in their pocket. So just giving a house back to a bank.
Speaker 3 (00:51:53):
I went over all that with them and they didn’t want anything to do with it. That’s why I thought maybe it would be a good flip.
Speaker 2 (00:52:01):
Yeah. I just, if they don’t agree though, then we can’t do anything, hun.
Speaker 3 (00:52:05):
We’ll talk about it. Okay. Fine. Thank you very much. Thank you.
Speaker 2 (00:52:11):
All right. Um, ed asked me a question. Do I give the seller a copy of the contract? Absolutely. I generally email it to them after I leave the appointment. Um, and Gordon’s right. They should seek legal counsel for the disposition of that property.
Speaker 3 (00:52:32):
All right. Let me still, are you still hearing me?
Speaker 2 (00:52:38):
I am. Um, but I’m going to have to take some more,
Speaker 3 (00:52:41):
Right? How do I get off? So somebody else
Speaker 2 (00:52:45):
I’ll meet you on hun. Okay. Okay. All right. Any other questions, guys? Just raise your zoom hand and, um, I’ll bring you on or put you in the, or if you want to put it in the chat otherwise, that’s all I got guys did. If anybody, let me ask you, did this help you guys tonight? Understand these contracts a little bit more? Tell me there are more questions. Okay.
Speaker 1 (00:53:19):
I think the heat’s making me lose my mind shepherd. I don’t know how to bring these people.
Speaker 2 (00:53:28):
Okay. So I just allowed you to talk if you would just unmute yourself, hun.
Speaker 4 (00:53:35):
I can. Yes. Uh, let’s say you have a house under contract. Do you have to show the buyer? The contract?
Speaker 2 (00:53:47):
You’re talking about the, but like if you’re wholesaling a contract to the end buyer and they want to see your contract yes.
Speaker 4 (00:53:53):
Do you have to, uh, if, if I got a console on, on, uh, on the country, like a wholesale contract, do I have to, uh, show that buyer that what I’m buying it for?
Speaker 2 (00:54:06):
No, you don’t, but he’s gonna, he’s gonna know exactly what, what you’re buying it for. Well, because what’s going to happen is, is number one, you have it under contract, right? That’s your contract. There’s another contract, which is a purchase agreement between that buyer and use. Okay. Now, once that happens at closing, there’s an assignment contract. Okay. And the assignment contract literally says that you’re assigning this property and they can this amount of money also because you never close on this house. And you’re assigning the contract between you and the end buyer. They’re going to see it right on the settlement statement. But a real investor does not care what you make. I mean, I don’t count other people’s money. It’s either a dealer or it ain’t a deal. You know what I mean? Right.
Speaker 4 (00:54:57):
But I’m just trying to see myself not going to jail anything. Cause I want to make sure that everything is right. And if I did say, if I’m being trustworthy, like building my, um, my, uh, clientele, let’s say I’m building my clientele and everybody know that I’m doing wholesaling. I want to be able to know that the seller is knowing that I’m trustworthy to work with them. And I want to know that the buyer is that I’m trustworthy to work with them. So if they come together, let’s say they come together. For some reason, they come together. Now they in the room with me and I got the contract. Do both look, cut to know each other or something like that. Do they have to know what the contract, uh, all about?
Speaker 2 (00:55:34):
So generally what’s going to happen is, is that the closing table they’re gonna, they don’t normally put, they don’t normally put you in all of you guys at the table together. Okay. Okay. Um, and if they do it, doesn’t matter if they’re not, if you agreed with a seller that you’re going to, that you’re going to bother house for a hundred thousand. Right. And they get their a hundred thousand, they’re not going to walk away.
Speaker 4 (00:55:57):
Okay. Okay. Sounds good. Okay. Thank you.
Speaker 2 (00:56:00):
And then in like our attorney, they know, have the seller, have the buyer sign docs first. Okay. And then a couple of hours later, you will have the seller side or vice versa. So they’re never sitting in front of each other. We don’t even got to go to closings.
Speaker 4 (00:56:19):
Can you do it like, uh, over the like online, like SIM like Dr. Mins, you can have them to sign
Speaker 2 (00:56:25):
It. If you, because you’re assigning the contract, you don’t have to go to closing. They’re going to, they’re going to get all your information and you, you’re a line item on the settlement statement. They’re just gonna send you the money.
Speaker 4 (00:56:39):
Okay. Gotcha. Gotcha. Gotcha. That’s a lie. Well, you got to think about it. It’s a lot to do at one time though, because I’m not going to think about the double closing right now. I’m just thinking about getting the contract.
Speaker 2 (00:56:54):
Um, and, and Hey, I’m going to pitch something real quick though. If you don’t mind. Okay. Go ahead at partner-driven. We do all this for you, man. Okay. We handle all the contracts. We have closing coordinators. We would want you to just focus on going out and getting the deals. All we handle all that stuff. So you’ll never be an, you’ll never get an issue, but obviously that’s my company. So I’m always gonna push that step. And so,
Speaker 4 (00:57:20):
But yeah. Good luck to you, man. Okay. Okay. I appreciate you. I’ll be calling back cause I do want to work with y’all. I do really want to do do that.
Speaker 2 (00:57:29):
7 7 0 7 4 6 8 5 8 5. You come work out with them.
Speaker 4 (00:57:35):
Okay. All right. I’ll show you.
Speaker 2 (00:57:38):
All right, man. Look forward to seeing you on the training calls. Oh, and before I let you, before we answered some more for all of you partners. Guess what? Tomorrow morning is at 9:00 AM. It’s fun with numbers day with me. So we’re going to be going over what you should be putting contracts under what you should be, what makes a deal, a deal. So for all of you that are partners on this call, do not miss I’m with numbers tomorrow morning at 9:00 AM. Eastern standard time. All right. Thank you. Thank you. I got Karen and Carl, if you will, um, I’ll ask you to unmute yourself. Hello? Hello. I know you guys know how to unmute yourself. Karen and Carl. I know these guys. You say,
Speaker 4 (00:58:25):
There you go. Can you hear me now? The question I have is does the homeowner have to go to the closing? Yes. The homeowner does. We don’t have to, but the homeowner,
Speaker 2 (00:58:43):
The homeowner does. Yes. And unless, unless a mobile notary is sent to them
Speaker 4 (00:58:51):
And that causes money, right?
Speaker 2 (00:58:54):
It does cost money. Um, it just cost extra and closing, but see, that’s part about working with you. So like, do you know, like, let’s say you and Karen were going to go buy a house in Georgia, right? And no, I’m sorry. Let’s say that the, the seller lived in Georgia and they have a house up there where you guys,
Speaker 4 (00:59:15):
Well, that’s the problem that we’re running into Texas and doesn’t want to go to closing.
Speaker 2 (00:59:23):
Okay. Listen, Mary handles all this. Carl, what we’re going to partner driven is going to, um, talk to the, the attorney and or the title company. They will get all their docs together. They will literally send a mobile notary to their house
Speaker 4 (00:59:44):
There for a closing. Okay. All right. That was a question that Karen asked me to staff the new nicest. Of course I I’m pretty sure that Julie said before that the homeowner does have to go or pay for no, they pay for the, the, a notary, right? The homeowner does. It’s part of closing costs. So we would be paying. Okay. All right. That’s where I was getting in trouble.
Speaker 2 (01:00:07):
I always do that because I just want to make it easy. I mean, quick and simple for somebody and not difficult. It’s not much money. Was it like 7,500 bucks.
Speaker 4 (01:00:18):
Okay. I I’ll I’ll tell Karen so she can let the homeowner know and hopefully they’ll go with us. Yeah. And just tell them they never have
Speaker 2 (01:00:26):
To leave. We’ll we’ll get, we’ll send somebody to them. Alrighty. St. Joe. Yes. Um, let’s see. We have any more hands raised. I’m not seeing anymore. I’ve got a couple of questions in the chat. Monica says I’m in lending. Can I put in a cash offer for a, for a buyer then sell it to him. In other words, they are financed with a bank, but due to the market, they can, they keep getting beat out of the offers from cash offers. Can I make the offer cash, buy the house, then turn around and sell it to my client. That’s financed by the bank. Um, is it going to be an FHA VA loan or is it a conventional loan? Because if they have a conventional loan, technically you could, but you couldn’t assign the contract. Okay. You’d have to close it in cash and then turn around and sell it. And the only loan product that will allow you to do that is a conventional loan. The other loan products have a 91 day seasoning period. From the time you buy it till you can close on that property. So you’d have to hold it for 91 days. If they have an FHA or VA with your product. So it’d have to be a conventional loan product.
Speaker 2 (01:01:45):
And obviously I wouldn’t do that unless I was making some money, by the way, that’s just me. Monica. Have I ever paid the transfer cats? Yes, I have. I never, I always tell the seller that they’re going to pay all the taxes, but if it’s a deal breaker then, and the numbers work, I don’t care. I’ll pay it. Does she have a real estate license? I don’t know who you’re referring to a Gordy. Um, I think Monica is in lending. All right, well guys, I think that’s all the questions that we have now. Uh, one, one more. This is we’ll take Michelle.
Speaker 4 (01:02:35):
Hey Julie. Hey Peter. How are y’all doing? I just wanted to find out if you all could answer a question, because now it’s got me thinking it was from Canada from earlier, and I’m trying to scroll up real quick. Cause I’m now having to use my phone and I’m learning how to do this whole. It was in regards to a spouse. Um, okay. It’s from Canada. And, um, I was trying to see if Kenneth would
Speaker 2 (01:03:02):
Got it. I’ve got it. If a sellers are husband and wife pass away, how would it death certificate come into play? This is different in each state. Um, it’s the route of successorship, but like here in Georgia, if a husband and a wife they’re on the title, okay, okay. The wife passes away. Then the husband does have all rights to that property, but that is not in every state. You have to check those laws out. Generally what’s going to happen almost in most, all cases is the husband would need to go through probate.
Speaker 4 (01:03:40):
The probate is still comes into play
Speaker 2 (01:03:42):
And most states. So you have to know. I wish I knew the answer for every state, but I just, don’t
Speaker 4 (01:03:49):
Just basically finding out from your individual state that you’re working in. That makes sense
Speaker 2 (01:03:54):
Your local title company. There’ll be able to answer that.
Speaker 4 (01:03:57):
Awesome. All right. Well, in that question, I appreciate y’all no problems. Thank you. Thank you. Thank you.
Speaker 2 (01:04:06):
All right. Let’s see. Anything else also, if it is a community property or an equity distribution, I don’t, I’m not really sure what that, what that means there, hun. Um, well, all right, well, that’s all we’ve got for this evening. Um, I don’t see any more questions, but guys, thank you so much for being on tonight. We really appreciate it. I hope tonight helped you. I hope, hope you learn something. Um, but I will tell you, we told you some scary stories about contracts, but don’t be afraid of them. Don’t be afraid of them and don’t let being afraid of them. Stop you from doing this business either. Okay. But knowledge is one thing that that is always going to get you to where you want to be. Okay. So understand these things in the contract studied in. It’s not just about not getting in trouble. It’s about having credibility with a seller. If you don’t know how to answer questions about a contract, then why are they going to want to trust you with you purchasing your home? Okay. That’s why knowing contract is important. So, all right, peace out. Y’all have a beautiful Tuesday night. Thanks. Bye.