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Speaker 1 (00:00):
Tuesday night. I’m so glad to have you. So as everybody’s popping on, if you’ll go ahead and put in the chat where you are from, I just love to hear where everybody is from. So go ahead and put that in the chat now. Hope everybody’s having an awesome day. What’s up, Bruce. Charlie, Chris Cleveland, David, uh, James jazz. Jeff. Hey zoos, John Joseph, Kevin Kyle. There’s a lot of you pop it on. So I’m having a hard time naming everybody out. Sally Shanita, TJ Thomas. All right. We got Jeffrey from Jacksonville, Florida. Hey, Zeus from Chicago. Uh, we got Louisiana, Cleveland, Ohio, New Jersey, Tony from the north Georgia mountains. Tony. That’s where I’m from. Actually I live in a little town called good Georgia. Um, Brad’s and Marietta. Pamela is from Colorado. So glad to have you on tonight. So, you know, guys, uh, th the reason, you know, for tonight, I’m really excited about it, um, is I really want to go over with everyone, a purchase contract.
Speaker 1 (01:19):
So, um, I’m going to go through the purchase contract this evening with everybody, um, so that, you know, we know how to use the purchase contract. Also, if you are joining us tonight on Facebook and, or on, um, on the zoom call, you’re going to get a copy of this contract, which is super awesome. Um, actually uses purchase contract nationwide. Um, I’ve been using this contract for years, and honestly, you would not believe the amount of money. Um, you know, we put into just two simple pages. Um, I’ve had lawyers, real estate attorneys check this contract out. The good thing about the contract is it’s going to be good for whatever you’re trying to do, even if you’re trying to wholesale fix and flip buy and hold. So it’s an all around just awesome contract that everybody can use. So we will be having that available for download, um, so that you can have a copy of this purchase contract, right.
Speaker 1 (02:28):
Um, so we’ve got Melissa from Greenville, South Carolina, what’s up Erica, Kevin from San Diego. We got New York, Colorado, so glad to have her, but I hope everybody’s having a good week. Uh, I know we got a big weekend coming up with the 4th of July. So, um, maybe everybody’s got some cool plans to spend time with friends and family, do a little cooking out, maybe shooting off some fireworks. Um, maybe that’s just my favorite things to do on 4th of July. So, um, love cooking, barbecue, sitting around the grill, having fun with friends and family. Um, but I’m so excited, you know, to have everybody on this evening. Um, so is everybody’s popping on, um, I, I, you know, I will tell you this Tuesday night webinars, something that Peter and I have been doing, man for a little bit over a year, every Tuesday night at 7:00 PM for a while now.
Speaker 1 (03:33):
I mean, it’s just something consistently we do so that we’re able to meet people like you knew or people that we already know. Um, it’s a good time to see that we’re like real people, let me pinch myself, um, make sure that we’re real people we’re doing real deals, you know, helping other, uh, other individuals across the country. Um, we, a little bit of knowledge that we’ve learned from over the years, right? So, um, just to, uh, a little bit of extra time to spend with you guys, I’m super excited for, for this evening, we’re going to go over every part of the contract, right? A lot of people think, um, when it comes to contracts that it’s like not that big of a deal, but it really is. If you’re going to be going to meeting with sellers and negotiating deals, it’s, it’s important to be able to understand each and every part of this particular contract or any contract that you’re using.
Speaker 1 (04:34):
So, um, you know, I’m not a licensed realtor, this is just me purchasing properties, utilizing this contract, um, you know, purchasing properties as is, we got Greg from Georgia. Um, oh, by the way, guys, I can very much see the chat. So if y’all have any questions during this, what’s up Philip, any questions, just go ahead and put that in the chat. Um, and I’ll definitely be able to see that this evening. So, um, one of the many things, you know, that we do is actually we do run a partnership program, um, where, uh, we work with individuals across the United States, helping them find deals and get them closed. Okay. So I’d be remiss not to kind of tell you guys about this before I get into the contract side of things. So, um, with our partnership program, what we’ve done or what we feel like we’ve done is created one of the best partnerships that there is to offer.
Speaker 1 (05:38):
So we provide daily training calls. We provide, um, one-on-one coaching calls along with an access to our revolutionary app called deal driven. And you actually get that included inside of our membership. Um, we use deal driven to, to be able to show you how to look up properties. And we’re, I’m going to show you guys that this evening. So we’re going to be looking at properties. You can pull leads from there, do driving for dollars. You get free skip traces in our program. Oh, and did I mention that if you are one of our partners and we, you find a deal, we actually will fund the deal for you. Yes. 100% of the deal and split profits with you, 50 50. So guys, if you want to learn more about our partner program, all you gotta do is go ahead and look at the link inside of Facebook and or in this chat.
Speaker 1 (06:45):
And all you, all you gotta do is go there and you can actually schedule a time to talk with someone at our company, um, to be able to schedule a call with us and learn more about that, right. Because, um, it’s not only mixing education with a funding source. Oh. And by the way, when we fund deals, a lot of people think like we’re like lenders or something like that. No, we’re not. I mean, you’re literally using our money to close deals. So we do fix and flips. We show you how to wholesale. And then, then I personally coach you, if you want to do buy and hold subject twos, lease options. Um, you know, I work with people on that because that’s how I buy a lot of my rental houses. Right. So if you would like to learn more, just go to www dot partner-driven dot com, you’ll be able to go ahead and request a call with us. So, um, you know, the reason for doing this is so, so that we can, you know, reach some of you that we’ve not talked to before, or, you know, there’s a lot of people on this call that are already partners. So it’s a way for us to just be with you again at another time. Right. Um, so who is ready to learn about contracts this evening?
Speaker 1 (08:12):
Go ahead and give me a yes. Inside of the chat and or on Facebook. Right. Okay, great. Great. Thank you guys. You don’t know how much I appreciate you putting things in the chat because it really makes me feel like I’m, I’m not just talking to air, I’m talking to all of you guys, right? So, um, what we’re going to do is we’re going to go over the purchase contracts, but I’m going to give you a few hints. So by the way, when you are looking to go to an appointment, it is imperative that you always take a purchase contract with you if at all possible. Um, the best time to get a deal is when you’re right there in front of the seller. Okay. So before your appointments, it’s also imperative that you do a little bit of research about the property, right? Maybe you should, you should definitely know what the after repair value is.
Speaker 1 (09:11):
Okay. You should know who the sellers are on the contract. Um, these are just things that you must know prior to putting something under contract, because I want to make sure that everybody knows how to create a contract that’s legal and that is binding. Okay. So you, I utilize a software called deal driven deal driven is a revolutionary app with Allie. Um, what it does is it aggregates from the tax records so that you get the right owners. Actually, if you look in the chat, now I put a free trial to deal driven in there so that you can just make sure. Um, and you’ll see why here in the future, why it’s so important that, that, that you have the right sellers on the contract, the right property address on the contract. Um, so you need to be looking at tax records somehow, um, either from it, your local county or something like deal driven. All right. Okay. So what’s going to happen. Is here just a moment you will get access to this contract. Um, let’s see here. Hey Kristen, could you make me a host because I can not share my screen. Okay,
Speaker 1 (10:34):
Awesome. Okay. Let’s see here. So believe it or not, if you’ll look, things always want me to update office. Um, if you look, I’ll just do an overview of this contract, actually it is only a two page contract. Um, really, it just kinda gets to the point. So there’s no need, there are tons of pages inside this contract. You want to make it as simple and easy for a seller to kind of understand this contract and for you to be able to explain it. So let’s kind of go through this contract little by little. Okay. So at the very beginning, obviously it says a real estate purchase contract dated this blank day of 2020. All of this can be changed, right? So today is what is today? Oh, June 30th. So it would be the 30th that was filling this out. This would be the 30th day of
Speaker 2 (11:44):
Speaker 1 (11:49):
I probably would take away these little asterix here. And by the way, this contract you’re going to get is going to be fully editable, just like this. So you can do this in word. So we’ll go ahead and get this in here. Now what I have here is company name and or personal name. So generally whenever I’m purchasing real estate, whether I’m wholesaling, whether I’m doing fix and flips, I’m going to have my company name in here. You could use your personal name. I’m not going to get into taxes and things like that this evening. But if you’re going to be doing real estate, it’s always good to have at least an LLC set up an LLC in which you’re buying properties, or maybe you’re wholesaling properties. Number one has got great tax benefits. Number two, it kind of shelters you a little bit personally.
Speaker 1 (12:43):
They are so, so you really kind of want to have that going. Um, so you can put whatever company name you have there. That is the buyer and the seller. This is where the seller is, where you’re going to put that information and where it is to be located. Okay. Really important here, guys that you, before you fill this contract, you aren’t looking at the tax records. Okay. I want you to put the owner’s name in here, just like it reads in the tax records. Okay. I cannot stress that to you enough. And I won’t tell you why, because a lot of times you’ll have multiple people, okay. You’ll have multiple people that own the property. So let’s say like a husband and a wife or two people own a property. Okay. And you only have one seller on your contract and only one seller that signed this contract.
Speaker 1 (13:47):
It’s not going to be a valid contract. You have to have everybody that’s on there. If it is an LLC that owns the property, sometimes LLCs on properties, sometimes estates on these properties, okay, you have to get the executor of the estate. You have to get the majority signers, or you have to get the signers of the LLC to sign this document. Right? So if there’s three owners in an LLC that own a class stocks, then you’ve got to have all of those people to sign this contract, right? And then you definitely obviously located at blank, which is the address portion of the contract. So you want to have this, the address here, see sometimes multiple times you’ll be dealing with a property that has multiple addresses, right? So you want to, you’re going to need to have separate contracts for, for every address. Like for instance, I was doing a deal the other week where they owned a house and a piece of land, you know, a house on land here.
Speaker 1 (14:59):
And then they owned an adjoining piece of land. Next door. Actually, you’re going to need two separate purchase contracts. So everything again has to match the tax records. Now, for those of you that are doing wholesaling, a lot of times you are assigning properties from, from you are assigning this contract to the end buyer. Okay? So when you’re assigning the contract to the end buyer, you’re actually selling a contract and not a house, right? This one stipulation in this contract, this contract is fully assignable allows you to sign the contract that you have under contract to the end buyer. So that’s super important because there are things that you can take in and out of this contract, if you are going to wholesale and assign the contract, do not take this out. If it makes it totally where you can’t do that. However, if you’re dealing with a seller and your goal is to just outright buy it, then this particular clause really isn’t that important. Okay. I hope everybody understands that. Now let me, I’m going to check the chat real quick just to make sure we don’t have any questions so far.
Speaker 1 (16:31):
Um, Kyle wants to know, is the tax information would be the information on deal driven. Yes, it would be called. So there’ll be the, because deal driven aggregates from the tax records. It’s simply pulling those local tax records and putting it inside of deal driven. Okay. So that’s there. The next thing will be the purchase price, the purchase price paid by buyer in us funds in the amount of blank. This is going to be the purchase price that you have negotiated with the seller. Now, second, the times our cash at closing, really guys that is a, a term you use to kind of entice the seller. But really, if you think about it, anytime a seller is closing, they’re getting cash at closing, right? Whether it’s a loan or not the seller still getting cash at closing.
Speaker 1 (17:29):
Wouldn’t you agree? Okay. So the next thing we’re going to talk about is contingencies guys. This is humongous. Okay. So with a contingency, this is your, basically your inspection period. Okay. This is the time in which you have to look at the property, look at repairs, do your renegotiations, uh, maybe even back out of the deal, because I mean, really, you know, if you’re doing this to a, if you’re doing this, you should be putting lots of properties under contract. That doesn’t mean you’re going to buy every one of them. Right. So let’s kind of go over these continuously up the inspection, okay. Buyer buyer’s expense, which would be, you shall have blank business days. Okay. After the inspection here have to have the property and all improvements, fixtures, equipment inspected, shell seller shall cooperate and making the property reasonably available for such inspection. Now, really negotiating this inspection period, especially when you’re wholesaling is almost as important as the purchase price.
Speaker 1 (18:56):
Okay. So when I’m trying to do a contract, I’m going to try to get 30 business days, if at all possible most contracts just say 30 days, I actually add business stays in here because that gives me about another extra week. And it’s not something that like necessarily completely draws attention to sellers because remember there’s time and then there’s money. Okay. And when you’re wholesaling, time is super important, especially if you’ve got a top deal, this inspection period, the way that I like to do, you know, when I’m wholesaling is the time in which you have to get the property and find it. If I do not find a new buyer inside of this inspection period, then probably what I’m going to do is I’m going to send a cancellation of contract. Okay? So this is a very important thing that you to go create this, um, this inspection period for as much time as possible. Okay?
Speaker 1 (20:06):
So, um, let’s keep going on. This contingency period. Buyer agrees to indemnify and hold seller harmless from any injury or damage caused by such inspection. If buyer is not satisfied with the condition of the property, as disclosed by such inspection buyer may terminate the contract by delivering a written notice of such termination to seller within the timeframe set forth in the paragraph. Buyer’s due diligence period does not start until the day of inspection. There’s actually a lot inside of this paragraph. What you’re telling the seller is, is let’s say you go to for the inspection, okay? You need to understand this too. And actually we went through this yesterday. Let’s say you go to a property and maybe the floor’s off. Right. And you were to fall through the floor by signing this contract. What you’re doing is you’re telling the seller, you hold them harmless for any energy or damage caused by that inspection. Okay. Was like the appointment I went on yesterday, like literally the floor was falling through the house. Okay. So I took it upon myself to decide whether I wanted to do that or not. Also buyer is not, if buyers not satisfied with the condition of the property inside of this inspection period, you may terminate this contract by delivering written notice of such termination as sellers. I’ve also added buyers due diligence period does not start until the day of inspection. Now let me explain to you why that is so important. Okay.
Speaker 1 (21:54):
Because it’s like, sometimes I’ll put, like, let’s say a rental house or maybe a house with somebody living in it under contract. Okay. And then the seller can’t get me in to the property. Well, I don’t want to sit there and wait three weeks to get into the property. Right. And then all of my inspection period is gone. So notice that whenever you’re using this contract, that the inspection period actually does not start until you do the inspection. So the 30 days is not starting until that inspection period has started until that inspection has been done. Right. So that’s going to help you with that. Believe it or not, that happens quite often. Um, I work in, uh, work in a deal now where it’s a seller and his brother lives there and I can’t get the brother to let me in the property. Right.
Speaker 1 (22:50):
So I’ve had this under contract for two or three weeks, but I can’t get in to do the inspection. My inspection period does not start until the day I get in there. Right. So that way I’m not running through my contracts so quickly just because I can’t see the house. All right. Second thing. Closing costs, fees, charges. Buyer is responsible for owner’s title policy. You’re the buyer. Because again, you’re paying, normally when you’re doing this, you’re paying all closing costs. That’s one of those things that you’re talking about with your seller, that, that helps them, um, like come along to your side to get the deal done. Um, title, search, title, search charges, recording, and other fees needed a secure title. Buyer is responsible for buyer’s inspection buyer’s attorney’s fees and all property related insurance, HOA, condo association inition Thies or transfer fees. Seller is responsible for documentary stamp taxes and tax on deeds.
Speaker 1 (23:57):
That is something that I would like to explain. So like for instance, in the state of Florida, they do not have, uh, like state income taxes, but they tax everything else. Okay. So one thing that they do is whenever you sell a property, okay, whenever you sell a property, they’re going to charge a transfer tax or like a deed tax on the property. Okay. I will pay all closing costs, but I do never pay someone else’s taxes. You would consider I’ve added this to this contract. You would consider that a tax fee. So even though you’re paying all the closing costs, you’re not paying for like a documentary stamp taxes and things like that. I believe it’s, it’s 75% of 1% in the state of Florida, I believe, or maybe it’s 95% of 1% in the state of Florida. And actually that could be a couple of thousand dollars.
Speaker 1 (25:04):
So that literally states right here, that the seller is responsible for those charges. Okay. Title insurance will be paid by buyer. Normally when you’re purchasing a property, you’re paying for title insurance. Um, I completely suggest that you get title insurance when you’re purchasing properties, just to make sure nothing comes back on you. Write taxes, taxes will be prorated to the date of sale. And buyer will be given a credit at closing for any and all unpaid real estate taxes together within and penalties and interest. Okay. So essentially let’s say I was purchasing your house. Okay. And today’s June 30th. You’re responsible for all taxes in 2020 from January to June 30th. I’m responsible for the taxes from June 30th through the end of the year. Okay. So if they’ve already paid that it’ll be prorated back to them inside of the settlement statement at closing, um, we say settlement statement.
Speaker 1 (26:11):
It used to be called a HUD statement, but now it’s called a settlement statement. Date seller will provide a marketable title, B a general warranty deed with release of title two buyer, or buyer’s, Disani free and clear of all liens, unless otherwise noted seller is responsible for associated with the date stamp. That’s again, me talking about the date stamp. What that means is is that when you place a property under contract, right, and let’s say they have a lien on the property, or they have a mortgage on the property, actually the liens and declare up these funds are to pay. The mortgage is going to come out of the seller’s proceeds, not out of your proceeds. So let’s say somebody has a mechanics lien for $3,200 then actually has to be cleared up prior to closing. That’s part of going to a title company or a real estate attorney to have these things cleared up because you need a clean and clear title and a deed.
Speaker 1 (27:18):
You don’t want to buy properties. That’s got, you know, a lot of people do quick claim deeds when you’re quick, claiming a deed and you have not checked title once that date’s been transferred to you on a quick claim deed, and it’s got a lien on it. That lane transfers to you, right? Who wants that? I’ve seen many people get quick claim deeds. And next thing you know, they’re stuck with 50 or 60,000 in liens that they never even knew about. Maybe it’s tax slings, mechanics leads, HOA liens, heck there’s even leans for like child support liens, right? So all of those things have to be clean and clear and using this contract because I want clear a clear deed to the house. I’m also letting them know that both parties have had an opportunity to seek legal counsel, to advise them in this particular transaction. Okay. So that’s just saying, Hey, if you wanted to get an attorney, you have the opportunity to do so.
Speaker 1 (28:21):
Now also both parties warrant that they are not represented in this transaction by a licensed real estate broker or agent, and no funds from this sale will be paid to a licensed real estate agent or broker. So this is not like a contract like Georgia has a state contract. Every state does. This is an as is purchase contract. All this is saying is that we are not paying a real, a tour, a commission on this particular deal, and we’re not using a real estate agent closing date. The parties agree that the closing will take place on earth before you can put whatever you want here. Normally, if I’m doing a 30 day inspection period, I want a 45 day close. I know a lot of you are out there thinking, oh my gosh, I can’t believe it takes, you know, you’re saying, you know, it’s going to take this long to get a seller, to close a house.
Speaker 1 (29:23):
Remember what did I say earlier? Your inspection period and your closing date is just as important as negotiating your sales price. Expecially. If you’re wholesaling. Now, if you’re just going to buy the straight out, buy, fix and sell, you could change these numbers around however you want, but know this right now, even with everything that’s going on, it is taken a little bit longer for titles to be pulled. So it’s kind of almost impossible to close a deal in seven to 10 days anymore, just because of the way that the counties are working, because you’re having to pull the information from the county. That’s going to the title company and, or the real estate attorney. You can only move the county so fast, right? And a lot of them are not working at full staff right now in a lot of states. So that is at a Gaucher creation tool right now that you can use with your sellers. Okay. Now, if y’all don’t mind, gimme just a second here and let me check the chat box to see if I have any questions.
Speaker 1 (30:25):
What if you do not find anything wrong with the inspection, but it is unable to find a buyer. How would you terminate the contract? Basically, Kevin, you would send them a written notice of cancellation. And, and basically all I would say is that the numbers do not work for me. Right? Probably prior to the end of that 30 days, Kevin, I would have called already and renegotiated it to a lower price because generally the reason why it doesn’t sell as a wholesale deal is because it’s overpriced, right? So after I’ve marketed for maybe two weeks and I’m not getting a price, I’m probably going to contact the seller for a price negotiation. Now, Kevin, would that be in said, let me tell you, you need a new contract signed every time you renegotiate that price. Okay. So keep that in mind. Stephen, do you have boots on the ground and mobile or Birmingham, Alabama?
Speaker 1 (31:17):
Absolutely. I do. Um, actually I’ve done several deals in Birmingham. Birmingham’s a great market. So I mean, I can definitely help you with that. Let me see some more chats here to cancel the contract. It should be written. Can it be via email? Uh, you know, Kenny, really what I do is I have a cancellation of contract form. So if I’m going to email it to them, I’m going to email them a form. Not like necessarily just write them an email out. If the buyer is paying a mortgage, would the seller have a deed or would they have a mortgage statement? The buyer is paying a mortgage.
Speaker 1 (32:04):
Okay. So if you’re the buyer, Kevin, okay. And you are purchasing the property, you’ve got to secure funds to purchase the property, right? So you’re either getting a loan or you’re paying in cash, but when you do so the original note from the seller is going to be paid out of those proceeds. The seller’s going to walk away with a difference between what the mortgage is and what I mean, what they owe on the property and what you have offered. So at closing that original mortgage company will be paid off. Archie wants to know, could you please explain what you mean by inspection period, Archie? That’s kind of like, it’s people call it due diligence. People call it inspection period. That’s the time in which you have to be able to do inspections. Okay. Like for me, like, like I just got off the phone with a seller that I’m going to buy fix and sell their house.
Speaker 1 (33:05):
I actually negotiated a 15 day inspection period. So inside of this inspection period, I’m not planning on wholesaling and I’m going to pay cash for it. Number one, I want to get a licensed home inspector to give me a home inspection. Right. I’m also going to get my rehab bits. So if I find something outside of, when I originally looked at that house inside of that 15 days, that I don’t like, I’m either going to go back to the seller and renegotiate, or I’m going to back out of the deal completely like such as let’s say you, you went to look at a house and you put it under contract, and then you didn’t realize it was ate up with termites, but then you had an inspection done and it was ate up with termites. Well, now I may want to back out of the deal.
Speaker 1 (33:52):
That’s what the inspection periods for Kenny wants to know. What, if we find an end buyer that wants to close sooner for our wholesale deals, do we have access to your cancellation form? We found an end buyer that wants to close sooner for our wholesale deals. Okay. So just because it says, if you’ll notice, actually it says on urban for 45 days, so let’s say you put it under contract and you find a new buyer and they want to close in two weeks. You can close quicker. You don’t have to wait out the 30 or the 45 days, right? You don’t have to do that. I hope that answers that question. If you are a partner, you have access to our cancellation of contract guys. Um, also things like that too, can be Googled a little bit, but we do at partner-driven have a cancellation of contract.
Speaker 1 (34:49):
Actually, we handle all of that for you because when you work with us at partner driven, you actually utilize my staff such as our closing coordinator, who helps you put these things in our contract, who helps you watch these contract dates do cancellation of contracts if need be okay, fixtures. This cell shall include any and all fixtures to the property included, but not limited to heating and air conditioning unit built in appliances, curtains, curtain, rods, attached, carpeting, attached mirrors in lights, screens, storm, doors, garage, doors, TV, reception, system outbuilding, and all exterior plants and trees. Except none. If anything’s inserted. Let me tell you what this is about. So what that means is is that whenever you looked at the house, the fixtures that are there, okay, go with the house. Meaning the seller can’t take those fixtures away when they close. Okay. One time I went to do a wholesale deal and the seller took out the light fixtures, the stove, everything in the house.
Speaker 1 (36:07):
Well, obviously I did an inspection before I closed and guess what? I did not close because then that that’s, that’s not what my buyer was looking for. All this is stating is that you cannot, as a seller remove these fixtures because the fixtures are part of the house. However, if someone is wanting to keep something, you would insert it here. Like there was a chandelier. One time I was doing a deal and it was a chandelier that was passed down. And I literally included that here and said, you know, seller shall keeps chandelier in dining room because I knew they were going to be taking that. That was kind of negotiated inside of my deal. Right? So if the seller is going to be keeping a fixture, you need to have that in the contract otherwise, right. They, they’re not allowed to take that. And actually it’d be a failure of contract if they were to do so. But by the way, that brings up another point, always go check your property or do do at least do a walkthrough before closing to make sure the seller hasn’t removed. Something like that. Okay. It happens. People just don’t realize they can’t do that.
Speaker 1 (37:25):
All right, I’m going to answer a few more questions here to take control of the property. All I need is the PNS, which is the purchase and sell agreement signed. When I meet the seller to start marketing, or do I need the deed to know Kevin, the Dee is going to come to you at closing. So to take control of the property, all you need is this purchase contract. This purchase contract gives you an equitable interest in the property, which is what allows you to, you know, basically wholesale the deal. Okay. So the deeds not going to come until closing.
Speaker 1 (37:59):
Thank you. Hey guys. Great question. Right. Great question. Thank you for all of these in Brooklyn, New York, a home can cost up there a million. These people want to see a lot of money up front. How can this be? How can this form be used effectively? Well, Pablo, regardless of what properties sell for, this is an actual legal binding co purchase contract saying, you know, basically you’re purchasing the home. The thing that would entice me if I’m a seller and a million dollar home, is if you were to buy their property, you’re not using a real, you’re using a real, a tour, which by the way, is about a 6% commission, right? 6% on a millions, what? 60 grand. So that would kind of be my big deal there, right? So that, I mean, in regards to the purchase price, I’ve used this per this purchase contract to buy land, to buy, you know, all the way down from a couple thousand dollar houses to, you know, even million dollar houses, other all representations and warranties of the parties are set forth in this contract.
Speaker 1 (39:12):
And shell survived. The closing, there are no representation or agreements of the parties that have not been incorporated in this agreement. Okay. So what does that mean? So that means that like, whoever is on the, on the, that owns the property, they are agreeing that they’re not going to come back and do anything. There’s no representation from attorneys. So like if a mom is in like a child come back, they could not come back and Sue for selling that property because the actual seller signed off on that. Okay. Now that brings up another point. If you’re going to be doing business with, with somebody that’s elderly, you must have a significant, that has nothing to do with contracts, but you need to have a significant amount of integrity here. I always, if I’m dealing with someone that’s elderly and I have any feeling whatsoever that they don’t know what they’re doing, I’m not going to pursue this contract.
Speaker 1 (40:15):
I’m just not, my integrity cannot be bought. So, you know, that’s the only thing I could say about that this agreement and all provisions here, um, shall be binding upon and in inner to the benefit and parties, heirs, executors, administrators, legal representation, successors, and permitted assigns, basically stating the same thing. Okay. Now here is one of the most important things in the contract marketing clause. Before I go over that, I’m going to go back to questions. And before I go for anyone working in Delaware, yeah. I’ve got partners in Delaware. I mean, there’s plenty of investors in Delaware.
Speaker 1 (41:06):
No bill wants to know. Do you have to have a house insurance when you wholesale? No, you don’t because you’re not selling a house. You’re selling a contract. Okay. So there’s no need for house insurance because you don’t actually own the property. Okay. Would you need to add anything to this contract if the property is currently rented? Absolutely. Eric. And I’ll explain that in just a minute. James is correct. If you’re wholesaling the property, you won’t ever see the deep, a quick claim. Deed is a S uh, Brad wants to know what’s the difference between a quick claim deed and a warranty. A quick claim deed is literally like a piece of paper where you’re literally just assigning the deed over to somebody else. A warranty deed is when you go and they’re pulling title or pull and title insurance. So then, so that you’re buying that property direct like that.
Speaker 1 (42:03):
Okay. All right. So let’s go to the marketing clause. Okay. And this is huge. This is really huge guys. This is what you do not remove from a contract, unless you’re going to outright purchase it. Investor is authorized to market and advertise the property for sale in any media of investors choosing well, let’s talk about media. Media is what Facebook Craigslist, uh, however, whatever meeting, including, but not limited to the internet seller, also grants investor to retain a licensed real estate brokerage of its choice to list and market the property through any multiple listing services in an attempt to procure buyers for the property in cooperation with other real estate brokers, investors, or individual buyers seller authorizes the investor’s broker to advertise the property for sale. Now, a lot of you that’s been wholesaling or seeing purchase contracts. This is going to be fairly Nudie.
Speaker 1 (43:20):
Number one, it’s saying that I have the right to market the property for sale. Okay. Number two, it’s allowing me to write to pre-market the property using the M L S okay. Gosh, this is enormous. What does that mean? What that means is I actually have the right to put this house under contract. Okay. And market it for sell on the MLS. And if you do not have buyers, where do you think the biggest buying market is in the world? The MLS nothing’s bigger than the MLS that realtor has. So you do have the right to pre-market the property by hiring a, a licensed realtor to list the property. The listing will be between that brokerage and your company. Now what ties this together is this. If you choose to do that, you are not going to be able to assign the property. You’re only going to be able to assign the property.
Speaker 1 (44:30):
When you actually have a list. If you’re going to use a licensed realtor tour to market your property, number one, you’re gonna be paying commission, which to me is fine because generally you can make more money on MLS. Um, and you are gonna have to double close, meaning you got to actually close on the property, okay. On the property, even if it’s only for a couple of hours or a day, and then turn around and sell it from your company to the end buyer. Okay. So how do you do that? Number one, you either got to have cash to do that, or you’ve got to get a transactional funding from a lender, or by the way, if you’re in our partner program, we put these funds up for you. So don’t worry about that. If you are, you’re a partner, we actually will handle those funds for you.
Speaker 1 (45:25):
Now, the next thing is special stipulations. I kept this handled by TBA. So normally I’ll put like what closing attorney or title company I’m going to be using, depending on what state you live in. So I think there’s about eight or nine states, um, in the U S that are actual attorney states, which means you have to use a licensed attorney to actually close the property. Or if you’re in a title state, you would put your title company here. So before you even get started in any of this guys, you should be finding an investor friendly title company, or an investor friendly real estate attorney. So if these title companies and attorneys don’t understand assignments, and don’t, double-close, they’re not going to be right for you. Okay? So it is imperative that you start building your networks now with, with, with these type of people.
Speaker 1 (46:28):
Okay? Because you always want to control your title, company, you or your attorney. You want to always control the deal. Okay. Also, if you’re going to put honest money down, I’d put it here, earnest money in the amount of blank to be held at blank, which would be your title company or closing attorney, whatever you do, don’t ever put earnest money down, right. And just hand the money to seller, always control your contracts. Always control your honest money. Okay? Because you’re honest money becomes non-refundable after this 30 days, see what I’m saying? So your, your honest money is not, is, is not, is, is returnable. As long as you put your earnest money down inside your inspection period. But the moment you run out of your inspection period, that honest money becomes the money, whether you close or not. Okay.
Speaker 1 (47:35):
So I like to put here property will be delivered, vacant, unless otherwise noted as is okay. If you had a tenant in place and you were going to keep the tenant, then that would be something you’d want to put in the stipulations. Okay. The biggest, biggest thing, remember at the very beginning, I was telling you about, you know, making sure you had all of the sellers on here. Okay. Right. Let’s say two people own this property. Both have to sign. This is not an executed contract. Endless all sellers sign. Okay. Whenever you do, you don’t remember anything from this conversation, all sellers have to sign. I’ll never forget. When I was first getting started, I had a killer deal and it was a husband and wife. I had the husband sign and he’s like, oh yeah, my wife’s on board. Right. And I’m like, cool. And I just kind of forgot about it. And I sold the property actually wholesale the property to somebody else with a profit of about 35,000. Well, what do you think happened? Whenever the, whenever the husband and wife went to the closing table, she wouldn’t sign, she wasn’t on the original contract. She refused to sell the house. I lost that deal because I didn’t have her sign, the original agreement.
Speaker 1 (49:00):
So I really encourage you to remember that pace. Now, let me see what other contracts, I mean, other contracts, goodness gracious. What other questions we may have? Norman wants to know I’m in California. Should I have both an investor friendly title company and closing attorney? No, I’m actually, I do deals in California. So a title company is just fine for you, Norman. Um, so just look for an investor friendly title company. I’m trying to think of who I close with. They’re out of Fresno, I think, but there, I mean, there are plenty in California, there’s title companies and attorneys and air, make sure you’re dealing with properties. Where do you write any honest money on the contract? The honest money Kenny can be actually, let me share my screen again.
Speaker 1 (49:58):
Can be here in special stipulations or it can be here, like honest money. He held honest monies in the amount of say $1,000 to be held at would say, whatever your title company or your attorney may be. You put it here or you can put it in the special stipulations, but you don’t have to have honest money, necessarily time to secure a contract. Okay. But when you’re a partner of ours, we put up the earnest money and it’s held at our attorney here in Atlanta. Hold on. Have you ever had a seller sign, another purchasing sell agreement after years got signed because they were offered a higher price. Oh, heck yeah, I have. And then I also, um, Kevin, you can Sue them for that. Okay. For failure to go through the contract and then what’ll happen is a lien can be placed on Todd, that title so they can not sell that house with that lien until the lien has been satisfied. Okay. So yeah, I mean, it just they’re, they’re not performing to the contract. I mean, really technically a contract could be written on a piece of paper and if it’s signed, all right, well, listen, we’re drawn to an end here. Um, but I wanna make sure we don’t have any more questions or anything. We got a lot of people on to not, um, I don’t know. Would you guys help me out here? Was this helpful to y’all any tonight? Did y’all enjoy tonight about these contracts?
Speaker 1 (51:52):
Great. Great. Thank you. Thank you. I hope it. I hope it really helps you guys. Um, also I wanna make sure, Hey Kristin, have we given everybody a contract in the chat? I want to make sure everybody’s got a contract. Okay. So right now I want everybody to look by the way I probably spent 20 grand put this contract together with different attorneys and things just for being with us tonight. We’re giving you the contract. So if you’ll look in the chat, there is a Dropbox link. This Dropbox link. I’m going to go ahead and click it now. Bri, when you click that contract, it’s going to take you to Dropbox here. Okay? What I want you to do when you get this? I want you to download this. Okay. A direct download when you get this direct download, okay. Then it’s going to be able to open in like a word document. That way you can save it to your computer and it’s editable editable. I don’t know if I said that word, right. But go ahead, click that link above. Right. And you will have access to that contract. Okay. All right. Any other questions?
Speaker 1 (53:34):
You know, so really basically God’s using that contract. You were able to put properties under contract right now. If you want to learn more about this business and you need some more one-on-one you need funding. You want to learn how to find deals, how to talk to sellers. Right? I would love for you to join our partner driven coaching program, where we work with you. One-on-one on things just like this on, you know, uh, getting all of these things done. And if you just want to learn more, go ahead and click the link up. That is right here. Now, before I hop off, I’m going to wait just a second here. See if you have any more questions and don’t wait, click that link now, because you’re only going to get this contract if you are alive. So I’m going to wait a little bit, go ahead and find that in the chat.
Speaker 1 (54:35):
Um, Pablo, I don’t what, I don’t know what questions you have about Brooklyn to help you. Eric says he’s got a very hot lead sellers are elderly and want to sell now, but it is rented. Okay. Well, Eric, um, I mean, we could go into rental properties all day long. Are they on a month to month lease or are they on a yearly lease? And if they aren’t a yearly lease, when does the lease expire? Most month to month leases. Oh, they’re on month to month. So what I would do is, is Eric is I would get it under contract. Okay. I would go through my inspection period. Eric. Now I would tell the seller, I do not want you to say anything to the tenant until my inspection periods over. Because if you back out of the deal, I don’t want them to lose their tenant. Okay. So then what you’ll do is you’ll actually have the seller get them out of the property. Okay? You’re not going to want to do that yourself. So then your seller would provide notice. I wouldn’t close on a deal like that until the property is delivered vacant, unless I was wholesaling the property because of the actual rental income. Hope that helps.
Speaker 1 (56:02):
Okay, great. Eric, I’m glad I answered your question. How does the contract work in areas such as Brooklyn, where they want to see a lot of money upfront before negotiations? I don’t understand what money up front they need to see. Are you talking about a proof of funds? And by the way, Pablo, I do deals all over. If you are a partner of ours, we provide you a proof of funds by simply emailing our support, our support email. So we’ll provide you those proof of funds. Okay?
Speaker 1 (56:40):
If you are a partner, you do not have to have an LLC set up because we’ll put that in our company name. We’ll put that in our company name. So you don’t have to worry about that. Now we’ll say Brad, um, having a company set up as good for tax purposes, I’m not going to get into CPA questions this evening, but anything you’re doing in this business right, is, is if you’re out driving for dollars, you got gas, you got your, you know, your home office, things like that to be thinking about. Well, all right, everybody, I’m so glad to spend the evening with you. I hope you have a little bit better understanding of purchase contracts and, um, you know, hopefully a few other tips we’re here every Tuesday night at 7:00 PM. So hoping that, you know, teach you a little bit, that we’ve learned over the years. I appreciate everybody. And if I don’t speak or talk to some of you guys have a happy 4th of July weekend, um, was so I hope you have a great time, be safe, be happy. And I like to end it with this on these webinars. If you have the funds available to support your local businesses, please support local businesses in your area. They’re the heart of this country. And, and, and you know that they all need our help. So have a good evening. Bye-bye.