Real Estate Investing with Brian Evans Jr.
"Time to Get Paid"
Okay. Who wants to get paid? This is what you have all been waiting for. We have worked through each of the steps needed to successfully buy and sell houses. Now we want to get a paycheck and this is what it’s all about!
You do all the great stuff until now and I’m going to be honest with you, this is not the most difficult part, because this is really the part if you’ve done everything right that a professional should handle for you, professional being an attorney. But there are some nuances that we need to cover and we’re going to cover those right now.
This section is all about completing your purchase, completing your sale, so you’re doing both, and getting paid.
So now what? You have found a motivated seller and you have a contract to buy. You have a commitment from an interested buyer or a tenant buyer and you’re ready to sell. What you do now is you let the professionals close the deal for you. You do not do tabletop closings.
You get the contract to buy, you get the contract to sell, you put the two together and that’s when you make money. Funding the closing ultimately depends on how you are buying the property. If you’re taking over a debt and buying a property subject to, then the only funds you’ll need will be the down payment money that you’ve negotiated with the seller and any other closing costs.
If you can buy a property with no money down, then that’s getting a property with no money. So, whatever you can ask and get is what the terms of your purchase will be. No money, no credit, etc.
If you’re buying a property with seller financing then the only funds you’ll need will be the down payment that you’ve negotiated with the seller and any closing costs.
You’re probably thinking money, “How am I going to do this, now I need money now I’m going to close?”
Well, you really don’t if you negotiate the right way. Everything in this business is about what you say and how you say it and how many times you say it.
If you are buying a property with all cash, with an all cash offer, to a seller and intend to resell the property later, then you’re going to have to bring funds to the table. As I’ve stated many times, the only time you really need to bring funds to the table is if you plan on buying it, fixing it, and flipping it that way to a retail buyer. That is my least favorite way of doing it, because it requires money, more time, more headache, more unknowns. Money, credit, whatever the case may be requires that stuff. There’s too many other ways to do this business.
Should you be able to do this business and know how to do it if the situation presents itself when you have a private lender that’s just dying to give you money? Sure, so now you know how to do it. But that’s not what your business is going to be revolving around, but it’s good to know. When you start doing well, when you start doing really well and you’re making money and it’s obvious, people can see it around you, people will start coming to you and they want to know what you’re doing and they want to get a piece of it whether they want to loan you money to put it into something or whatever.
When your bank starts seeing the money in your account grow, they start calling you to see if you can do other things together. You’re going to want to know how to use money if it’s available to you. You’re not going to pass up the money if it’s available to you. If money’s available to you by other outside, third party sources that’s not your money or your risk, use it. That’s a great relationship. I’m not telling you not to use money. I’m telling you not to use your money.
If you are buying a property with an all cash offer to a seller and intend to wholesale the property same day to an end buyer or an investor buyer, then required funding for your purchase is case by case and also depends on the comfort level of your closing attorney. We’re going to talk about that about how funds can flow through on the next page possibly.
What I always try to do is have a same day closing. Otherwise referred to as a back to back closing, a simultaneous closing, an A to B, B to C closing, double closing, flow through closing, wholesale closing, dry closings, flips, quick sale, whatever you want to call it. It’s all the same stuff. What I want to do is get in and get it tied up. If I can get rid of this asset and collect what’s leftover in the middle, that’s what I want to do.
If I can do that at the same time that is my main objective. Sometimes, I make the deals a little bit more complicated and difficult than they need to be, but I want to do it and approach every deal as if I have no money and no credit. If I do have to bring some money to the table, it should be very short term. I mean short term like same day in and out, wire funds, get a wire back same day, if at all possible.
So, don’t complicate what you’re doing. It’s not a real secret that you’re buying with the intent to resell. There’s no secret and your attorney shouldn’t care less. In fact, your attorney should be 100% supportive of what you’re doing. Their job is to get it done and help you do it the legal way with the paperwork and whatever else is needed.
If you feel as though the attorney that you have on your team is not jiving with what your goals and intentions are, find a new attorney, a real estate closing attorney or maybe you need to use a title company in your area, whatever is most comfortable to you. Your real estate attorney should love it that you’re bringing a bunch of deals to them, because they’re getting paid on two closings, when they buy, when you buy and when you sell.
Sometimes attorneys will also tell you no, you can’t do this, you can’t do this. Wrong. Here’s the thing. Here’s the litmus test if an attorney tells you no. You should simply ask, “If I cannot do this, then can you please show me the law in writing, the written law which says I cannot do this?”
They can’t show you. They’re saying no because they’re not familiar, they’re uncomfortable, they’ve never done it before, or they don’t get it. That’s why they say no 90% of the time.
If they say no, require that they back it up. If they can’t back it up or are not willing or even, then find another attorney, right? Require proof, that’s the litmus test.
Having an attorney is important and will help you reach your goals, bottom line.
Let the professional do what they do best, which is keep you legal and get it closed so that you can do what you do best, which is be a transaction engineer, find more sellers, find more buyers, create a marriage made in heaven and get paid in the middle.
What if my closing does require funds? What if I have no choice? Always think creatively and work to fund your deal as if you have no money and no credit always. That’s the first thing before even thinking about where you might have to get it or borrow it from. Always try to think the creative route first, “Can I get an extension from my seller? Will the lender who’s doing the short sale with me, can we get an extension on our approval letter? Can I stall out my purchase a little bit longer to help facilitate the time needed for my sale?”
That’s the creative way to think first. Small minded thinkers are going to think, “Well, man, we have no other choice. I guess we’ve got to close it and take that risk.”
That’s a risk that I don’t want you to take until it’s an absolutely last resort, and you’ve asked for this a million times, gotten a million no’s, and now you’ve got to make a decision what we do next. Think as creative as possible to always find a way to do the deal without funds.
If you have no other choice but to bring funds to the table, then here’s what you must do first. Make sure that your B to C closing is ready to go or very close. Think A to B, B to C, A to B, B to C. You’re going to try to do A to B and B to C as closely as possible.
The bottom line is always try to get the deal completed with as little risk as possible. Every time you have to bring funds to the table, you are putting yourself at risk. If you are interested in being trained to conduct your real estate investing business the way I do mine, fill out a help ticket here and I will have someone in my office contact you to see if we are a good fit!