Show Summary
Do you know what a title policy is? Even if you’re paid for hundreds of them, you may not really understand what you’re covered for, and what you’re not. Kevin Tacher, “The Title King” gives us a deep dive into what a title policy is, what is covers, and maybe more importantly…what may not be covered. Kevin also shares the difference between investor friendly title companies, and those that are more retail focused…and how you can find the right title company for you. Check out this episode of the FlipNerd.com Flip Show to learn more!
Highlights of this show
- Meet Kevin Tacher, “The Title King” and expert on title policies.
- Learn about some exceptions that you may not be covered on with your title policies.
- Join the conversation on how to avoid pitfalls that you may face as a real estate investor, as it pertains to the title insurance you’re paying for
Resources and Links from this show:
Listen to the Audio Version of this Episode
FlipNerd Show Transcript:
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And now, let’s get started with today’s show.
Hey, it’s Mike Hambright with FlipNerd.com and welcome back for another exciting VIP interview where I interview successful real estate investing experts and entrepreneurs in our industry to help you learn and grow.
Today I’m joined by Kevin Tacher. He’s known as the Title King. He’s the Founder and CEO of Independence Title in Fort Lauderdale, Florida and Kevin’s also a speaker and a best-selling author. Kevin’s an expert in title policies and insurance.
Most investors, me included, have paid a lot of money for title insurance, but you might not actually know what you’re getting or where the pitfalls are. I just did some rough calculations in my head that I’ve probably paid somewhere well over a half million dollars in title policies and mostly without knowing what I’m actually really getting. I could probably say that for every part of insurance in my life and I think a lot of real estate investors are in the same boat. We just buy title insurance because it’s a necessary evil and we know we need to get it.
But today Kevin is going to tell us how to better understand what it is you’re actually getting and some common oversights with title insurance. Before we get started though, let’s take a moment to recognize our featured sponsors.
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Now, let’s start today’s show. Hey Kevin, welcome to the show.
Kevin: Thanks Mike. Thanks for having us. We’re happy to be here.
Mike: Yeah, yeah. It’s an exciting topic and we were talking about before. When I had another guest on recently, we started talking about title research and actually we got a lot of people that were interested and fascinated by some things. I know you’re going to kind of build upon that today but it’s an interesting thing. It’s one of those things that it’s on the HUD. I’ve got to pay it. It is what it is.
I’ve never bought a house, I would never advise anybody to buy a house without title insurance, but it’s just one of those things that I never really think about, what it is. When my title company says here’s your title research, I just hit delete. I’m like, well, is there something I need to know? Usually I just hit delete unless they tell me there’s something wrong.
So, I think a lot of people are probably in that boat and that probably is scary for you to hear that but I’m sure that’s common.
Kevin: Yeah, I mean that’s part of how we built our business. You know, it’s trust. You trust the person you’re doing business with the same as when you hire a real estate agent. You trust they’re going to represent you properly. Or a mortgage lender, you trust that they’re going to give you the best possible loan.
Mike: Yeah.
Kevin: Sometimes you don’t ask the necessary questions because you don’t really understand it. You trust them that they’re going to do the right thing and you need to know what to look out for.
Mike: Yeah, and one think that will be interesting to get into, I don’t want to steal your thunder yet, but there’s a lot of exclusions that are kind of written into a lot of title policies and investors, some of those documents they’re signing are exclusions away from things that actually won’t cover them in the event that they have a claim. Is that correct?
Kevin: Yeah, I mean, the famous Hold Harmless Agreement that most people see, especially investors when they’re buying from the bank. The REO Title Company who’s looking out for the bank, that’s their largest and best client.
Mike: Yeah.
Kevin: If that bank stopped using them, they essentially go out of business. So they put that Hold Harmless Agreement, and the problem is if you don’t know what you’re signing, you just sign one of the documents not realizing that if anything ever comes up, you can’t call them. They say, “Don’t call us. Leave us alone.” You have to hope that your title policy is going to step in and cover it and then there are exclusions on that as well.
Mike: Yeah.
Kevin: As I say, with any insurance company, insurance companies are not in business to pay claims. It makes sense. That’s the nature of the business.
Mike: Right.
Kevin: You need to know how to best protect yourself so this way if there is a claim, it’s probably something major that will be covered.
Mike: Yeah, yeah. Well, before we get too deep into this today, why don’t you tell us your background. You’ve got a really unique and interesting story and I’d like to hear more about it.
Kevin: Awesome. Well, right out of high school I became a firefighter up in New York, not in the city, outside the city on Long Island. I did that for about six years. I went all the way up the rank to a Captain and what I liked the most was taking care of people, serving others more than I serve myself.
So when I moved down to Florida I had an opportunity just before September 11th, August 20th. Just before September 11th I moved to Florida and I had an opportunity to get into a totally different industry which was mortgages, real estate, title insurance. I didn’t know much about it, but I said, “You know what, let me get a fresh start, move down here and see what we can do.”
So we got into the business. I started doing mortgages for a while. I owned a real estate brokerage and eventually I was doing everything. So I did the mortgage. I did the closing. I sold the client the house. I kind of took care of every aspect for them because I felt so proud of my relationship with them that I was looking out for their best interest.
Mike: Yeah.
Kevin: Now, fast forward into the title insurance business. My priority was title insurance since 2003. It’s the only thing I’ve done. I’ve invested in some houses but for me it was more let me teach my staff how to serve the community, how to serve the investors better than anyone else.
We built the company from three closings a month up to 80 to 100 closings a month. I have 15 full-time employees and they all follow that same premise, serve you better than we serve ourselves.
Mike: Right.
Kevin: Look out for you. As I learned when I was a firefighter was firefighters go in the deal, they run into the fire together and no one is left behind. It’s the same thing with my company. We go in this deal together and we’re all going to get out paid or we’re all going to get out unpaid, but at least it’s going to be for the right reasons.
Mike: Yeah. That’s awesome. Maybe you could take a minute and tell us about the difference between, because for all investors, anybody that I mentor or coach or talk to, anybody that asks, you would always say one of the first things you want to do is find an investor-friendly title company, right? Investor-friendly being the key word there.
There’s a lot of great title companies but a lot of the typical retail title companies, they tend to think, you’re doing assignments. Assignments are illegal or they just don’t really understand the investor’s side and so it’s a very different animal. You want to find somebody that works with investors that has experience.
Maybe you could take a minute to talk about why you chose to work with investors versus retail clients who are typically probably able to charge more for their services and probably have less drama because it’s usually clean buyer and clean seller, instead of somebody is living in a van somewhere down by the river that needs to get some documents signed and some of the typical stuff that happens with investors.
Maybe talk like why you chose that path versus working with traditional retail.
Kevin: It’s a funny story. It actually found me. You know, the retail is always bread and butter for the title company, the buy, sell, big cash deals, million dollar transactions. It’s always easier, safer for title companies. But for me, it actually found me. You had a guest on about three months ago, Lex Levinrad.
Mike: Yeah.
Kevin: He was, you know, when he first got into the business bird-dogging. I was actually doing closings for his mentor. So the investor deals kind of found me. When Lex got his first house under contract, he didn’t know what to do. He said, “You know what, I have Kevin’s card in my pocket. I’m going to call him and bring my deposit.” That’s kind of how I got into it.
There was another investor, David Dweck, who runs the Boca Real Estate Club here in north Florida, just a little north of us, and he said, “Listen, if you can learn how to do double closings, you will do very well with me.” So, I knew nothing about it. So I learned about it.
Part of being an investor-friendly title company is your fees have to be low. You have to protect their interests because these are investors that are going to be turning around and flipping these deals. And they need to make sure title is clean so they don’t have problems in 30 days, sometimes the same day, when they’re looking to sell these properties.
Mike: Right.
Kevin: So, we were able to take that business model. We have more volume so we do a lot more of the deals. But it’s understanding how the investor world works. Understand how, with transactional funding on a flip, most people can’t understand how someone would put up money without getting a mortgage signed, without getting a note signed. It’s very simple. It’s trust. You have to understand the deal. They have to know who you’re working with.
I have funders that will only use my company if we’re doing the closing because they know their money is well-protected. They’re not going to wind up getting a call saying, “By the way, you just bought a house because the end buyer’s money never came in.” We make sure those steps are done. We make sure that the deal is signed, sealed, and delivered before anyone’s money is at risk.
So it goes back to the firefighter days, as we’re going in together and we’re leaving together. So the investor market is all about relationships and it’s a very good market to be in because you have all of these students who are starting to learn more about this business and that now is the time to learn. They’re making so much money in the investor world now. There’s so many deals out there. Now is the time to get into the business and find someone that will protect.
Mike: Sure. I’ve got to imagine from a satisfaction standpoint, I know that this is probably how you operate. This is how I am. I like to build relationships. You just talked about relationships. I like to build relationships with people that we build over time. We work together over and over again. I guess as a traditional title company, you’re probably never dealing with the same client more than once.
Kevin: Right, right. The clients, the buyer, and the seller essentially, those are our true clients.
Mike: Right.
Kevin: But the relationship is built with the investor. So a lot of us with the investors, we do have the repeat ones that are doing 15 or 20 deals a month. We have the students that come to us and want hand-holding. But essentially you’re right. If it’s a traditional buy, sell deal, you’re probably never going to see them again unless they refinance and come back to you.
Mike: Right.
Kevin: Very rarely do you see those repeat clients. So with the investor world it’s totally different. It’s all repeat.
Mike: Sure, sure. Yeah. Awesome. Well, let’s kind of jump into the topic of the day. So maybe you could talk about, just at a high level, maybe just take it from the top. What is a title policy, why people should or shouldn’t get them, and maybe just kind of go into what some of the pitfalls are, what they typically don’t cover that may surprise people and what to look for in terms of exclusions and things like that.
Kevin: Absolutely. So, you had the guest on that you spoke about earlier that a title examiner, which is so important in this business. If you’re buying [inaudible 00:12:25] owned properties, before you put those offers out. You’re buying auction properties. You need someone to do the investigative research of the property. That’s what they do.
We do that as well through our underwriter, but ours is tied to the issuance of a title insurance policy. So that’s the research that’s done ahead of time.
Mike: Right.
Kevin: So if you just want the research, you go to an examiner, an investigator like that company. When it comes time to do the closing, you’re buying an actual title insurance policy. One of the things I tell people is, “You’re buying this policy. You’re spending all this money, but what’s covered and what’s not covered?”
Mike: Right.
Kevin: So, to give you a brief overview of title insurance, it’s an insurance policy just like any other, car insurance, health insurance, any type of insurance policy. It’s the same thing. We’re insuring risk. The difference though is that with title insurance we’re protecting backward. So we’re searching the history of the property all the way back to make sure there is nothing that is there that would cause you as the buyer a claim to your property.
Mike: Right.
Kevin: We don’t care too much about the house. We care more about the land, the use to use the land. So, we can see our risk, which is why you only buy it one time. You buy it when you close and you don’t have to pay for it every year as opposed to the other types of insurance.
Mike: Right.
Kevin: But it’s still risk based so you have to know what is the possible risk and what’s covered. The problem with the title insurance policy is there’s a lot of items that are listed as exclusions, which are on typically Schedule B-2 and it says a lot of stuff you wouldn’t understand which are land use rights, easements, things like that.
But the major things are permitting issues which are not covered in title insurance, municipal issues which are code enforcement violations, not necessarily code enforcement liens, outstanding utility bills that haven’t been converted to an actual lien. You see, the lien is covered by title insurance. But when it’s just a violation, it’s not covered.
Mike: Okay.
Kevin: So the problem is, unless you know what to search for, these items are not covered.
Mike: So give an example. You just mentioned a permitting violation. So give an example of what that is, how it may not get caught when you buy because you didn’t know what it was. When you go to sell it somebody, that title company or their underwriter is a little more thorough and says, “Well, this isn’t clear.” What’s the kind of a-ha there that could… Give an example of something that could kind of bite you.
Kevin: Title companies, by nature, used to order lien searches all of the time. But what they usually do not order is the extra search for permitting because permits are not covered in title insurance. The bank’s title company, which is representing their largest and best client, sometimes they don’t even order a lien search, period. They make you close without a lien search because it’s not covered in title insurance.
You have to order it on your own. So a perfect example of an investor is buying a property and there’s an expired permit. Let’s say there’s an expired roof permit for someone that took a permit out for a roof, did it, and either didn’t get it finaled or started the process and stopped the process. It’s now an expired permit.
The problem is is when that investor buys that house and throws a coat of paint on it, they fix the landscaping, they put it back on the market and sell it to that FHA buyer, that first-time home buyer, I guarantee you that title company is going to pull a permit search for their FHA buyer.
So when that expired permit comes up, it’s going to say a roof permit. Now guess what the investor has to do? They have to spend the money either getting the permit opened and closed, worse, open an engineer’s letter and then close. Or even worse, opened, replace the roof completely because it wasn’t done to code or they say, “We can’t see the type of nailing that was done and we’re not approving it.” And even worse, lose the deal.
Mike: Yeah.
Kevin: You know, lose their buyer.
Mike: Right.
Kevin: So there are things that are not covered. Permitting is one of them. Code enforcement is another. One of the big things we’re seeing here in south Florida are utility bills. Simple water bills in the range of $16 to $20,000 of outstanding utility bills.
Mike: Wow.
Kevin: So, imagine they don’t pull a lien search and now that new buyer goes to turn on the water and now there’s a big lien. Try and go back to the bank and ask them to pay for something, the answer is going to be no.
Mike: Right, right. The interesting this is that some of the things you’re talking about here are different by state, right? It could even be at the county level I guess. I know in Texas, where we’re at, we’ve had issues before where they won’t turn our utilities on because they were an unpaid bill. Usually if we provide them a HUD to show that we changed hands they’re okay with that. But I know that rules are different from state to state. How should investors, maybe just give a tip on how they could learn more about these things that are unique to their market.
Kevin: Yeah, I mean, Florida, it’s different. Obviously you go by Florida statutes.
Mike: Right.
Kevin: Here it’s actually every municipality is different.
Mike: Right, right, right.
Kevin: Some lien. Some don’t lien.
Mike: Yeah.
Kevin: So, check with their local municipality. The first step is make sure the title company is ordering a lien search, not just the title search. Title search is the history of the property that’s recorded in public records tied to the legal description. The lien search is everything that’s unrecorded. So, it’s going to be personal property for people that run businesses maybe out of their house that’s unpaid. It could be utility bills, permitting, code.
So make sure they order that search and then call the municipality and say, “Do you lien for tenant water? Is there outstanding utilities that I need to know about? Are there any open permits, expired permits that I need to know about?” Is how they could do the research on their own as opposed to ordering the search themselves. And even when you order the search, they’re not necessarily 100% reliable because people make mistakes.
Mike: Right, right. I have a story of, I don’t know if this would get caught at all in any of the things that you’re talking about here, but it was basically a demolition order on a house. So, I know somebody that wholesaled, basically assigned the house to somebody.
They went in and the windows were boarded up because it had been vacant for a while. Somebody had passed away but it wasn’t a bad house. They just boarded the windows up for some reason. The guy went in, left the boards on the windows. He’s like, “I’ll just take those off at the end.” Rehabbed the house, but it still on the outside pretty much looked like it had for some time.
Apparently, even at the time he bought the house, there was a demolition order on the house and nobody knew it. Title never caught it. The guy went out there one day and the house was gone. They had literally bull-dozed the house. So the title company just said, “Look, we don’t do searches on demolition orders like in county records and things like that.”
So there’s some things that a lot of investors probably think would naturally get caught in a title search that don’t necessarily happen.
Kevin: Yeah, I mean, for sure that’s something, depending on how it’s indexed. Here in Florida everything is a public record so most likely the order probably had to go through some type of court jurisdiction so there would probably be some type of code enforcement order that was recorded.
Mike: Yeah.
Kevin: So we probably would catch that here. But in a lot of states where things are not a public record, it may not be found.
Mike: Yeah.
Kevin: It’s something that definitely may not be found and again, there’s a perfect example how the title company will probably say, “Well, we didn’t know about it. We wouldn’t have known about it. We’re not paying it.”
Mike: Right.
Kevin: So now what does the investor do? The investor is stuck. We’ve paid back taxes on property, of no mistake of our own just because of the relationship with the client. So the answer is what do you do? Do you pay it? Or do you let the house go into tax deed sale and you have an angry client?
Mike: Right.
Kevin: So, it’s this thing. You need to know each municipality, which is why most investors work in their own niche market because they understand how to deal with the county and those people, the code enforcement people in their own little area. They get comfortable with them. They know them on a first name basis. So they understand the ins and outs.
Mike: Right, right. So would you say that, you’ve been in the business for a while, would you say that this is a natural occurrence? That over time title companies, not calling out specific title companies like you but just for one reason or another, the number of exclusions that exist have gone up. Therefore, they’re able to make more money because there are less opportunity for claims. Is that kind of a phenomenon that’s kind of happened over time?
Kevin: Well, I mean, the exclusions, yes. You are seeing more and more exclusions as far as permitting and code stuff. The scarier part are the actual requirements. So, we just did a closing with an investor that got stuck holding a property for 30 days. So we both hold title searches from the same underwriter and the title looked totally different. Our commitment was totally different. We had about five or six items on there to be cleared that they didn’t have. So the answer is why is theirs different than ours if it’s the same national underwriter?
Mike: Right.
Kevin: The difference is is when it came in from the underwriter, they look at it, they say, “You know what? That’s not a big risk. We’re going to insure over those items.” Where a company like myself is going to say, “Absolutely not. I’m not insuring over those. Those could become issues.”
Mike: Yeah.
Kevin: There’s the big difference, which is scarier than the exclusions to the policy. They’re just removing things like re-foreclosure orders, where we call for re-foreclosure and they say no because they just want to pass the property off the books. So now when we pull our backup search, we call for a re-foreclosure and they say, “Oh, we must have missed it.”
Where if you were only buying and not doing a double closing, you’re just buying from them, you would have now bought that re-foreclosure. When you go to resell, imagine having to now pay to re-foreclose out an old owner when you’re supposed to be the owner and you’re ready to sell it to an FHA buyer in 45 days for a huge profit.
Mike: Right, right. So, maybe talk about some common exclusions that are in a typical title policy that investors may run into issues with that they thought they were covered but they’re not.
Kevin: Absolutely. Well, in Florida we have your standard exclusions which are mechanics liens, which are city stuff, so would be municipal stuff, which are permit code, water, things like that, survey exceptions.
So, we see so many times that you get a buyer who ordered a survey. The seller signed the affidavit stating that there’s nobody else in possession, there’s no leases on the property, there’s no mechanics liens as far as contractors do. But for some reason, the title company doesn’t remove it from the policy.
So when these issues become a problem, they say, “Well, it’s not covered by your policy.” So where do you go now? Let’s go back to the owner. So now you go back to the owner, who you can’t even find. They were probably in short sale, foreclosure. Usually investors are buying distressed houses. So good luck trying to find the seller or to get the bank to agree that they made a mistake.
Mike: Right.
Kevin: So, those are your standard exceptions. Some of the larger things we’re seeing are old code enforcement issues, easements that were expired years ago, restrictions of land use that were expired years ago. That they don’t do the proper research which is where like that company you had on a couple of weeks ago, they do the research. They’re an investigator. Investigate the history of title, which is similar to what we do, but we have to take it one step further to say, “What is a standard exception and what can we remove?”
Mike: Right.
Kevin: Because if it’s a title company, they don’t remove the standard municipal exception and there’s a code enforcement issue that comes up, the title policy won’t cover it. So that means the national underwriter won’t cover it. Do you think the local title company is going to have the funds available to defend that for you? Probably not.
Mike: Right, right. So one of the things you said just a minute ago was mechanics liens. So you’re saying, that’s something I would have assumed is easily covered by a title policy, but you’re saying that’s typically an exemption where a vendor has some sort of lien against the property and it’s not covered by the title policy. Is that right?
Kevin: It’s a standard exception.
Mike: Wow.
Kevin: It has to be removed. So on a title commitment here, and a lot of the forms are the same throughout the country, but our forms, there’s five standard exceptions and that’s one of them.
Mike: Wow.
Kevin: One of the standard exceptions are mechanics liens for vendors and people that are due money. So if you don’t remove the standard exception and someone comes back, they’re going to say, “Well, it’s an exception to the policy” and they’re probably going to try and pass the blame. Now, you could push the envelope a little bit and try and get them to cover it. But the reality is, is if the title company doesn’t remove the standard exceptions, now you’re messed up.
Mike: Yeah.
Kevin: So make sure they’re removed. When we’re doing double closings, we protect the, we make sure the front side removes them and we remove them on the backside. But many of them don’t, especially the banks. The REO companies are not even signing those affidavits, and then you sign that Hold Harmless that says you’re assuming all risks in buying this property.
Mike: Yeah, yeah. I want to, something just kind of hit my mind that I think would be interesting for other people to know, me included. I’m excited to hear you talk about this. So, a lot of investors will typically, if they have a contract to buy a house and the seller backs out or somebody tries to go around you or something, they’ll typically do what we typically refer to as clouding the title. So you just kind of record the contract or some sort of affidavit of fact in the county records to say, “I effectively have a claim on this house to purchase it.”
I know states are different in terms of homestead exemptions and whether that will actually fly, but maybe take a minute to talk about what that is and how that really works because I think a lot of investors throw that around, “Well, I’m just going to cloud the title and it’ll come back to me in a few months or a year.”
But maybe talk, the theory is that it’s effectively like a lien that no title company will insure so it’ll come back to you. But maybe talk about that for a second.
Kevin: Yeah, I mean, what you’re talking about is an investor. They get a property under contract. They want to protect their interest. They have a valid contract but the contract isn’t recorded anywhere. Or you have some sellers that are just getting cold feet and they decide they don’t want to sell for whatever reason. So the investor will basically take a memorandum of contract and they take it down to the courthouse.
We’ve actually worked with many investors. What they do is they get the memorandum, they send a courier to the courthouse to record it, get three certified copies, and they serve the title company, they serve the realtor, they serve the seller.
I think it’s more of a scare tactic. I think it’s more of a scare tactic to make sure they’re aware that they’re selling to you and only you and if they don’t, they’re going to have to pay. Typically those will be paid. They only last a certain period of time, but a lot of investors do it.
Mike: Yeah.
Kevin: Do I necessarily agree with it? Not necessarily, but from a legal standpoint, I won’t give the legal advice on it because I’m not an attorney.
Mike: Right.
Kevin: But I’ll tell you from a procedure standpoint, a lot of investors do it and they win.
Mike: Yeah.
Kevin: Because now they know that this property is locked up. They don’t have a choice but to pay you. So you either sell to me or you’re not going to sell, at least for a while, until you go through the process of getting that vacated.
More so, because the title insurance company isn’t making enough money to have the claim. We’re not making thousands and thousands of dollars. If on an investor deal we make $5 – $600, we’re not going to take a risk of a $10,000 cloud on title. It’s not worth the legal defense…
Mike: Right.
Kevin: …to defend it. So the title companies back away and say, “We’re not closing.”
Mike: Yeah, and that’s when you see that it’s clouded by somebody else. Is that right?
Kevin: Yeah, we would see it when we pull our update on title, we would see. Plus, typically the investors are serving the title company saying, “Hey, by the way, we’ve recorded this against the history.” Because a lot of times they won’t catch it in the update. So you want to make sure if you are doing it, you actually serve the notice to the title company so they’re aware that this cloud now exists.
Mike: Right, right. That’s fascinating. Well, Kevin we’ve got just a few more minutes here. Maybe you could take a few minutes and talk about some kind of obvious things that investors should start looking for, paying attention now that you’ve got their attention a little bit here. What are some things that they should look for that are some typical holes in the boat, if you will, that going forward they should pay a little more attention to?
Kevin: Absolutely. First one is the settlement statement. Very easy, you have the settlement statements all over. Look at your fees. Make sure the fees are not ridiculous. If they are, go to the title company and say, “These aren’t reasonable and customary. We need to reduce them a little bit.” So tip number one is save some money.
The next two are the searches. We do two types of searches, the title search and the lien search. Make sure you’re ordering lien searches. Lien searches, again as we said, are covering code enforcement, permitting, utility bills. Make sure they’re pulling these lien searches and you’re reviewing them to see what shows up.
The third one is looking at your title commitment. The buyer is supposed to receive that title commitment and as you said, you received it but you don’t really know what you’re looking at. You expect they’re doing the job. You need to look at it and have them explain it to you. What are the requirements and are these all going to be taken care of? What are the exceptions? Are they all going to be taken care of?
If you’re using the bank’s title company and you’re not flipping the deal where you have a title company such as myself shadowing the second closing to make sure the first goes smooth, hire a research company like the guest you had on to do that research to match it up and make sure that all your ducks match up and the title looks pretty clean.
Mike: Sure.
Kevin: So those are kind of the three things you really need to look out for. But most importantly is that lien search because the banks, the REO title companies now aren’t ordering them anymore. They make you responsible for requesting it and responsible for ordering it and reviewing it. But permits and code issues can come back to bite you, especially when you’re selling to that FHA buyer because they’re for sure going to do the proper research to make sure there’s nothing that’s going to put that loan in jeopardy.
Mike: Right, right. Awesome. Kevin, if folks want to learn more about you and absorb some more of your knowledge, where do they go?
Kevin: Our website is Title Rate, R-A-T-E, so TitleRate.com. You can download all of my books on there. My best-selling book with Ron LeGrand, “Title Insurance Tips & Secrets” book with Lex Levinrad. The books are all on there. We have a mobile app on there, a closing cost calculator that they can use. Everything is state of the art. Or just give our office a call. I’m available. My staff is available. We’re all trained on investor procedures so we’re happy to answer any questions and kind of walk you through that process to make sure that you’re protected, we’re protected, and we all get out of the deal making some money.
Mike: That’s fantastic. Kevin, thanks so much for your time today. I appreciate it. That’s great information and this is exactly, I’m sure there’s a lot of people that are listening to this right now that just learned a ton. Me included, so thank you very much.
Kevin: It’s our pleasure to educate, empower, and make sure we’re all making money.
Mike: All right buddy, have a great day. Appreciate you.
Kevin: Thank you.
Mike: All right.
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Thanks for joining us for today’s FlipNerd.com podcast. To watch or listen to more great shows, please visit FlipNerd.com or visit us in the iTunes store. To access the most robust social platform in existence for real estate investors where you can find off-market wholesale deals, great vendors, literally in your market, and to socialize with other like-minded individuals, please visit the one, the only FlipNerd.com.
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And now, let’s get started with today’s show.
Hey, it’s Mike Hambright with FlipNerd.com and welcome back for another exciting VIP interview where I interview successful real estate investing experts and entrepreneurs in our industry to help you learn and grow.
Today I’m joined by Kevin Tacher. He’s known as the Title King. He’s the Founder and CEO of Independence Title in Fort Lauderdale, Florida and Kevin’s also a speaker and a best-selling author. Kevin’s an expert in title policies and insurance.
Most investors, me included, have paid a lot of money for title insurance, but you might not actually know what you’re getting or where the pitfalls are. I just did some rough calculations in my head that I’ve probably paid somewhere well over a half million dollars in title policies and mostly without knowing what I’m actually really getting. I could probably say that for every part of insurance in my life and I think a lot of real estate investors are in the same boat. We just buy title insurance because it’s a necessary evil and we know we need to get it.
But today Kevin is going to tell us how to better understand what it is you’re actually getting and some common oversights with title insurance. Before we get started though, let’s take a moment to recognize our featured sponsors.
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Now, let’s start today’s show. Hey Kevin, welcome to the show.
Kevin: Thanks Mike. Thanks for having us. We’re happy to be here.
Mike: Yeah, yeah. It’s an exciting topic and we were talking about before. When I had another guest on recently, we started talking about title research and actually we got a lot of people that were interested and fascinated by some things. I know you’re going to kind of build upon that today but it’s an interesting thing. It’s one of those things that it’s on the HUD. I’ve got to pay it. It is what it is.
I’ve never bought a house, I would never advise anybody to buy a house without title insurance, but it’s just one of those things that I never really think about, what it is. When my title company says here’s your title research, I just hit delete. I’m like, well, is there something I need to know? Usually I just hit delete unless they tell me there’s something wrong.
So, I think a lot of people are probably in that boat and that probably is scary for you to hear that but I’m sure that’s common.
Kevin: Yeah, I mean that’s part of how we built our business. You know, it’s trust. You trust the person you’re doing business with the same as when you hire a real estate agent. You trust they’re going to represent you properly. Or a mortgage lender, you trust that they’re going to give you the best possible loan.
Mike: Yeah.
Kevin: Sometimes you don’t ask the necessary questions because you don’t really understand it. You trust them that they’re going to do the right thing and you need to know what to look out for.
Mike: Yeah, and one think that will be interesting to get into, I don’t want to steal your thunder yet, but there’s a lot of exclusions that are kind of written into a lot of title policies and investors, some of those documents they’re signing are exclusions away from things that actually won’t cover them in the event that they have a claim. Is that correct?
Kevin: Yeah, I mean, the famous Hold Harmless Agreement that most people see, especially investors when they’re buying from the bank. The REO Title Company who’s looking out for the bank, that’s their largest and best client.
Mike: Yeah.
Kevin: If that bank stopped using them, they essentially go out of business. So they put that Hold Harmless Agreement, and the problem is if you don’t know what you’re signing, you just sign one of the documents not realizing that if anything ever comes up, you can’t call them. They say, “Don’t call us. Leave us alone.” You have to hope that your title policy is going to step in and cover it and then there are exclusions on that as well.
Mike: Yeah.
Kevin: As I say, with any insurance company, insurance companies are not in business to pay claims. It makes sense. That’s the nature of the business.
Mike: Right.
Kevin: You need to know how to best protect yourself so this way if there is a claim, it’s probably something major that will be covered.
Mike: Yeah, yeah. Well, before we get too deep into this today, why don’t you tell us your background. You’ve got a really unique and interesting story and I’d like to hear more about it.
Kevin: Awesome. Well, right out of high school I became a firefighter up in New York, not in the city, outside the city on Long Island. I did that for about six years. I went all the way up the rank to a Captain and what I liked the most was taking care of people, serving others more than I serve myself.
So when I moved down to Florida I had an opportunity just before September 11th, August 20th. Just before September 11th I moved to Florida and I had an opportunity to get into a totally different industry which was mortgages, real estate, title insurance. I didn’t know much about it, but I said, “You know what, let me get a fresh start, move down here and see what we can do.”
So we got into the business. I started doing mortgages for a while. I owned a real estate brokerage and eventually I was doing everything. So I did the mortgage. I did the closing. I sold the client the house. I kind of took care of every aspect for them because I felt so proud of my relationship with them that I was looking out for their best interest.
Mike: Yeah.
Kevin: Now, fast forward into the title insurance business. My priority was title insurance since 2003. It’s the only thing I’ve done. I’ve invested in some houses but for me it was more let me teach my staff how to serve the community, how to serve the investors better than anyone else.
We built the company from three closings a month up to 80 to 100 closings a month. I have 15 full-time employees and they all follow that same premise, serve you better than we serve ourselves.
Mike: Right.
Kevin: Look out for you. As I learned when I was a firefighter was firefighters go in the deal, they run into the fire together and no one is left behind. It’s the same thing with my company. We go in this deal together and we’re all going to get out paid or we’re all going to get out unpaid, but at least it’s going to be for the right reasons.
Mike: Yeah. That’s awesome. Maybe you could take a minute and tell us about the difference between, because for all investors, anybody that I mentor or coach or talk to, anybody that asks, you would always say one of the first things you want to do is find an investor-friendly title company, right? Investor-friendly being the key word there.
There’s a lot of great title companies but a lot of the typical retail title companies, they tend to think, you’re doing assignments. Assignments are illegal or they just don’t really understand the investor’s side and so it’s a very different animal. You want to find somebody that works with investors that has experience.
Maybe you could take a minute to talk about why you chose to work with investors versus retail clients who are typically probably able to charge more for their services and probably have less drama because it’s usually clean buyer and clean seller, instead of somebody is living in a van somewhere down by the river that needs to get some documents signed and some of the typical stuff that happens with investors.
Maybe talk like why you chose that path versus working with traditional retail.
Kevin: It’s a funny story. It actually found me. You know, the retail is always bread and butter for the title company, the buy, sell, big cash deals, million dollar transactions. It’s always easier, safer for title companies. But for me, it actually found me. You had a guest on about three months ago, Lex Levinrad.
Mike: Yeah.
Kevin: He was, you know, when he first got into the business bird-dogging. I was actually doing closings for his mentor. So the investor deals kind of found me. When Lex got his first house under contract, he didn’t know what to do. He said, “You know what, I have Kevin’s card in my pocket. I’m going to call him and bring my deposit.” That’s kind of how I got into it.
There was another investor, David Dweck, who runs the Boca Real Estate Club here in north Florida, just a little north of us, and he said, “Listen, if you can learn how to do double closings, you will do very well with me.” So, I knew nothing about it. So I learned about it.
Part of being an investor-friendly title company is your fees have to be low. You have to protect their interests because these are investors that are going to be turning around and flipping these deals. And they need to make sure title is clean so they don’t have problems in 30 days, sometimes the same day, when they’re looking to sell these properties.
Mike: Right.
Kevin: So, we were able to take that business model. We have more volume so we do a lot more of the deals. But it’s understanding how the investor world works. Understand how, with transactional funding on a flip, most people can’t understand how someone would put up money without getting a mortgage signed, without getting a note signed. It’s very simple. It’s trust. You have to understand the deal. They have to know who you’re working with.
I have funders that will only use my company if we’re doing the closing because they know their money is well-protected. They’re not going to wind up getting a call saying, “By the way, you just bought a house because the end buyer’s money never came in.” We make sure those steps are done. We make sure that the deal is signed, sealed, and delivered before anyone’s money is at risk.
So it goes back to the firefighter days, as we’re going in together and we’re leaving together. So the investor market is all about relationships and it’s a very good market to be in because you have all of these students who are starting to learn more about this business and that now is the time to learn. They’re making so much money in the investor world now. There’s so many deals out there. Now is the time to get into the business and find someone that will protect.
Mike: Sure. I’ve got to imagine from a satisfaction standpoint, I know that this is probably how you operate. This is how I am. I like to build relationships. You just talked about relationships. I like to build relationships with people that we build over time. We work together over and over again. I guess as a traditional title company, you’re probably never dealing with the same client more than once.
Kevin: Right, right. The clients, the buyer, and the seller essentially, those are our true clients.
Mike: Right.
Kevin: But the relationship is built with the investor. So a lot of us with the investors, we do have the repeat ones that are doing 15 or 20 deals a month. We have the students that come to us and want hand-holding. But essentially you’re right. If it’s a traditional buy, sell deal, you’re probably never going to see them again unless they refinance and come back to you.
Mike: Right.
Kevin: Very rarely do you see those repeat clients. So with the investor world it’s totally different. It’s all repeat.
Mike: Sure, sure. Yeah. Awesome. Well, let’s kind of jump into the topic of the day. So maybe you could talk about, just at a high level, maybe just take it from the top. What is a title policy, why people should or shouldn’t get them, and maybe just kind of go into what some of the pitfalls are, what they typically don’t cover that may surprise people and what to look for in terms of exclusions and things like that.
Kevin: Absolutely. So, you had the guest on that you spoke about earlier that a title examiner, which is so important in this business. If you’re buying [inaudible 00:12:25] owned properties, before you put those offers out. You’re buying auction properties. You need someone to do the investigative research of the property. That’s what they do.
We do that as well through our underwriter, but ours is tied to the issuance of a title insurance policy. So that’s the research that’s done ahead of time.
Mike: Right.
Kevin: So if you just want the research, you go to an examiner, an investigator like that company. When it comes time to do the closing, you’re buying an actual title insurance policy. One of the things I tell people is, “You’re buying this policy. You’re spending all this money, but what’s covered and what’s not covered?”
Mike: Right.
Kevin: So, to give you a brief overview of title insurance, it’s an insurance policy just like any other, car insurance, health insurance, any type of insurance policy. It’s the same thing. We’re insuring risk. The difference though is that with title insurance we’re protecting backward. So we’re searching the history of the property all the way back to make sure there is nothing that is there that would cause you as the buyer a claim to your property.
Mike: Right.
Kevin: We don’t care too much about the house. We care more about the land, the use to use the land. So, we can see our risk, which is why you only buy it one time. You buy it when you close and you don’t have to pay for it every year as opposed to the other types of insurance.
Mike: Right.
Kevin: But it’s still risk based so you have to know what is the possible risk and what’s covered. The problem with the title insurance policy is there’s a lot of items that are listed as exclusions, which are on typically Schedule B-2 and it says a lot of stuff you wouldn’t understand which are land use rights, easements, things like that.
But the major things are permitting issues which are not covered in title insurance, municipal issues which are code enforcement violations, not necessarily code enforcement liens, outstanding utility bills that haven’t been converted to an actual lien. You see, the lien is covered by title insurance. But when it’s just a violation, it’s not covered.
Mike: Okay.
Kevin: So the problem is, unless you know what to search for, these items are not covered.
Mike: So give an example. You just mentioned a permitting violation. So give an example of what that is, how it may not get caught when you buy because you didn’t know what it was. When you go to sell it somebody, that title company or their underwriter is a little more thorough and says, “Well, this isn’t clear.” What’s the kind of a-ha there that could… Give an example of something that could kind of bite you.
Kevin: Title companies, by nature, used to order lien searches all of the time. But what they usually do not order is the extra search for permitting because permits are not covered in title insurance. The bank’s title company, which is representing their largest and best client, sometimes they don’t even order a lien search, period. They make you close without a lien search because it’s not covered in title insurance.
You have to order it on your own. So a perfect example of an investor is buying a property and there’s an expired permit. Let’s say there’s an expired roof permit for someone that took a permit out for a roof, did it, and either didn’t get it finaled or started the process and stopped the process. It’s now an expired permit.
The problem is is when that investor buys that house and throws a coat of paint on it, they fix the landscaping, they put it back on the market and sell it to that FHA buyer, that first-time home buyer, I guarantee you that title company is going to pull a permit search for their FHA buyer.
So when that expired permit comes up, it’s going to say a roof permit. Now guess what the investor has to do? They have to spend the money either getting the permit opened and closed, worse, open an engineer’s letter and then close. Or even worse, opened, replace the roof completely because it wasn’t done to code or they say, “We can’t see the type of nailing that was done and we’re not approving it.” And even worse, lose the deal.
Mike: Yeah.
Kevin: You know, lose their buyer.
Mike: Right.
Kevin: So there are things that are not covered. Permitting is one of them. Code enforcement is another. One of the big things we’re seeing here in south Florida are utility bills. Simple water bills in the range of $16 to $20,000 of outstanding utility bills.
Mike: Wow.
Kevin: So, imagine they don’t pull a lien search and now that new buyer goes to turn on the water and now there’s a big lien. Try and go back to the bank and ask them to pay for something, the answer is going to be no.
Mike: Right, right. The interesting this is that some of the things you’re talking about here are different by state, right? It could even be at the county level I guess. I know in Texas, where we’re at, we’ve had issues before where they won’t turn our utilities on because they were an unpaid bill. Usually if we provide them a HUD to show that we changed hands they’re okay with that. But I know that rules are different from state to state. How should investors, maybe just give a tip on how they could learn more about these things that are unique to their market.
Kevin: Yeah, I mean, Florida, it’s different. Obviously you go by Florida statutes.
Mike: Right.
Kevin: Here it’s actually every municipality is different.
Mike: Right, right, right.
Kevin: Some lien. Some don’t lien.
Mike: Yeah.
Kevin: So, check with their local municipality. The first step is make sure the title company is ordering a lien search, not just the title search. Title search is the history of the property that’s recorded in public records tied to the legal description. The lien search is everything that’s unrecorded. So, it’s going to be personal property for people that run businesses maybe out of their house that’s unpaid. It could be utility bills, permitting, code.
So make sure they order that search and then call the municipality and say, “Do you lien for tenant water? Is there outstanding utilities that I need to know about? Are there any open permits, expired permits that I need to know about?” Is how they could do the research on their own as opposed to ordering the search themselves. And even when you order the search, they’re not necessarily 100% reliable because people make mistakes.
Mike: Right, right. I have a story of, I don’t know if this would get caught at all in any of the things that you’re talking about here, but it was basically a demolition order on a house. So, I know somebody that wholesaled, basically assigned the house to somebody.
They went in and the windows were boarded up because it had been vacant for a while. Somebody had passed away but it wasn’t a bad house. They just boarded the windows up for some reason. The guy went in, left the boards on the windows. He’s like, “I’ll just take those off at the end.” Rehabbed the house, but it still on the outside pretty much looked like it had for some time.
Apparently, even at the time he bought the house, there was a demolition order on the house and nobody knew it. Title never caught it. The guy went out there one day and the house was gone. They had literally bull-dozed the house. So the title company just said, “Look, we don’t do searches on demolition orders like in county records and things like that.”
So there’s some things that a lot of investors probably think would naturally get caught in a title search that don’t necessarily happen.
Kevin: Yeah, I mean, for sure that’s something, depending on how it’s indexed. Here in Florida everything is a public record so most likely the order probably had to go through some type of court jurisdiction so there would probably be some type of code enforcement order that was recorded.
Mike: Yeah.
Kevin: So we probably would catch that here. But in a lot of states where things are not a public record, it may not be found.
Mike: Yeah.
Kevin: It’s something that definitely may not be found and again, there’s a perfect example how the title company will probably say, “Well, we didn’t know about it. We wouldn’t have known about it. We’re not paying it.”
Mike: Right.
Kevin: So now what does the investor do? The investor is stuck. We’ve paid back taxes on property, of no mistake of our own just because of the relationship with the client. So the answer is what do you do? Do you pay it? Or do you let the house go into tax deed sale and you have an angry client?
Mike: Right.
Kevin: So, it’s this thing. You need to know each municipality, which is why most investors work in their own niche market because they understand how to deal with the county and those people, the code enforcement people in their own little area. They get comfortable with them. They know them on a first name basis. So they understand the ins and outs.
Mike: Right, right. So would you say that, you’ve been in the business for a while, would you say that this is a natural occurrence? That over time title companies, not calling out specific title companies like you but just for one reason or another, the number of exclusions that exist have gone up. Therefore, they’re able to make more money because there are less opportunity for claims. Is that kind of a phenomenon that’s kind of happened over time?
Kevin: Well, I mean, the exclusions, yes. You are seeing more and more exclusions as far as permitting and code stuff. The scarier part are the actual requirements. So, we just did a closing with an investor that got stuck holding a property for 30 days. So we both hold title searches from the same underwriter and the title looked totally different. Our commitment was totally different. We had about five or six items on there to be cleared that they didn’t have. So the answer is why is theirs different than ours if it’s the same national underwriter?
Mike: Right.
Kevin: The difference is is when it came in from the underwriter, they look at it, they say, “You know what? That’s not a big risk. We’re going to insure over those items.” Where a company like myself is going to say, “Absolutely not. I’m not insuring over those. Those could become issues.”
Mike: Yeah.
Kevin: There’s the big difference, which is scarier than the exclusions to the policy. They’re just removing things like re-foreclosure orders, where we call for re-foreclosure and they say no because they just want to pass the property off the books. So now when we pull our backup search, we call for a re-foreclosure and they say, “Oh, we must have missed it.”
Where if you were only buying and not doing a double closing, you’re just buying from them, you would have now bought that re-foreclosure. When you go to resell, imagine having to now pay to re-foreclose out an old owner when you’re supposed to be the owner and you’re ready to sell it to an FHA buyer in 45 days for a huge profit.
Mike: Right, right. So, maybe talk about some common exclusions that are in a typical title policy that investors may run into issues with that they thought they were covered but they’re not.
Kevin: Absolutely. Well, in Florida we have your standard exclusions which are mechanics liens, which are city stuff, so would be municipal stuff, which are permit code, water, things like that, survey exceptions.
So, we see so many times that you get a buyer who ordered a survey. The seller signed the affidavit stating that there’s nobody else in possession, there’s no leases on the property, there’s no mechanics liens as far as contractors do. But for some reason, the title company doesn’t remove it from the policy.
So when these issues become a problem, they say, “Well, it’s not covered by your policy.” So where do you go now? Let’s go back to the owner. So now you go back to the owner, who you can’t even find. They were probably in short sale, foreclosure. Usually investors are buying distressed houses. So good luck trying to find the seller or to get the bank to agree that they made a mistake.
Mike: Right.
Kevin: So, those are your standard exceptions. Some of the larger things we’re seeing are old code enforcement issues, easements that were expired years ago, restrictions of land use that were expired years ago. That they don’t do the proper research which is where like that company you had on a couple of weeks ago, they do the research. They’re an investigator. Investigate the history of title, which is similar to what we do, but we have to take it one step further to say, “What is a standard exception and what can we remove?”
Mike: Right.
Kevin: Because if it’s a title company, they don’t remove the standard municipal exception and there’s a code enforcement issue that comes up, the title policy won’t cover it. So that means the national underwriter won’t cover it. Do you think the local title company is going to have the funds available to defend that for you? Probably not.
Mike: Right, right. So one of the things you said just a minute ago was mechanics liens. So you’re saying, that’s something I would have assumed is easily covered by a title policy, but you’re saying that’s typically an exemption where a vendor has some sort of lien against the property and it’s not covered by the title policy. Is that right?
Kevin: It’s a standard exception.
Mike: Wow.
Kevin: It has to be removed. So on a title commitment here, and a lot of the forms are the same throughout the country, but our forms, there’s five standard exceptions and that’s one of them.
Mike: Wow.
Kevin: One of the standard exceptions are mechanics liens for vendors and people that are due money. So if you don’t remove the standard exception and someone comes back, they’re going to say, “Well, it’s an exception to the policy” and they’re probably going to try and pass the blame. Now, you could push the envelope a little bit and try and get them to cover it. But the reality is, is if the title company doesn’t remove the standard exceptions, now you’re messed up.
Mike: Yeah.
Kevin: So make sure they’re removed. When we’re doing double closings, we protect the, we make sure the front side removes them and we remove them on the backside. But many of them don’t, especially the banks. The REO companies are not even signing those affidavits, and then you sign that Hold Harmless that says you’re assuming all risks in buying this property.
Mike: Yeah, yeah. I want to, something just kind of hit my mind that I think would be interesting for other people to know, me included. I’m excited to hear you talk about this. So, a lot of investors will typically, if they have a contract to buy a house and the seller backs out or somebody tries to go around you or something, they’ll typically do what we typically refer to as clouding the title. So you just kind of record the contract or some sort of affidavit of fact in the county records to say, “I effectively have a claim on this house to purchase it.”
I know states are different in terms of homestead exemptions and whether that will actually fly, but maybe take a minute to talk about what that is and how that really works because I think a lot of investors throw that around, “Well, I’m just going to cloud the title and it’ll come back to me in a few months or a year.”
But maybe talk, the theory is that it’s effectively like a lien that no title company will insure so it’ll come back to you. But maybe talk about that for a second.
Kevin: Yeah, I mean, what you’re talking about is an investor. They get a property under contract. They want to protect their interest. They have a valid contract but the contract isn’t recorded anywhere. Or you have some sellers that are just getting cold feet and they decide they don’t want to sell for whatever reason. So the investor will basically take a memorandum of contract and they take it down to the courthouse.
We’ve actually worked with many investors. What they do is they get the memorandum, they send a courier to the courthouse to record it, get three certified copies, and they serve the title company, they serve the realtor, they serve the seller.
I think it’s more of a scare tactic. I think it’s more of a scare tactic to make sure they’re aware that they’re selling to you and only you and if they don’t, they’re going to have to pay. Typically those will be paid. They only last a certain period of time, but a lot of investors do it.
Mike: Yeah.
Kevin: Do I necessarily agree with it? Not necessarily, but from a legal standpoint, I won’t give the legal advice on it because I’m not an attorney.
Mike: Right.
Kevin: But I’ll tell you from a procedure standpoint, a lot of investors do it and they win.
Mike: Yeah.
Kevin: Because now they know that this property is locked up. They don’t have a choice but to pay you. So you either sell to me or you’re not going to sell, at least for a while, until you go through the process of getting that vacated.
More so, because the title insurance company isn’t making enough money to have the claim. We’re not making thousands and thousands of dollars. If on an investor deal we make $5 – $600, we’re not going to take a risk of a $10,000 cloud on title. It’s not worth the legal defense…
Mike: Right.
Kevin: …to defend it. So the title companies back away and say, “We’re not closing.”
Mike: Yeah, and that’s when you see that it’s clouded by somebody else. Is that right?
Kevin: Yeah, we would see it when we pull our update on title, we would see. Plus, typically the investors are serving the title company saying, “Hey, by the way, we’ve recorded this against the history.” Because a lot of times they won’t catch it in the update. So you want to make sure if you are doing it, you actually serve the notice to the title company so they’re aware that this cloud now exists.
Mike: Right, right. That’s fascinating. Well, Kevin we’ve got just a few more minutes here. Maybe you could take a few minutes and talk about some kind of obvious things that investors should start looking for, paying attention now that you’ve got their attention a little bit here. What are some things that they should look for that are some typical holes in the boat, if you will, that going forward they should pay a little more attention to?
Kevin: Absolutely. First one is the settlement statement. Very easy, you have the settlement statements all over. Look at your fees. Make sure the fees are not ridiculous. If they are, go to the title company and say, “These aren’t reasonable and customary. We need to reduce them a little bit.” So tip number one is save some money.
The next two are the searches. We do two types of searches, the title search and the lien search. Make sure you’re ordering lien searches. Lien searches, again as we said, are covering code enforcement, permitting, utility bills. Make sure they’re pulling these lien searches and you’re reviewing them to see what shows up.
The third one is looking at your title commitment. The buyer is supposed to receive that title commitment and as you said, you received it but you don’t really know what you’re looking at. You expect they’re doing the job. You need to look at it and have them explain it to you. What are the requirements and are these all going to be taken care of? What are the exceptions? Are they all going to be taken care of?
If you’re using the bank’s title company and you’re not flipping the deal where you have a title company such as myself shadowing the second closing to make sure the first goes smooth, hire a research company like the guest you had on to do that research to match it up and make sure that all your ducks match up and the title looks pretty clean.
Mike: Sure.
Kevin: So those are kind of the three things you really need to look out for. But most importantly is that lien search because the banks, the REO title companies now aren’t ordering them anymore. They make you responsible for requesting it and responsible for ordering it and reviewing it. But permits and code issues can come back to bite you, especially when you’re selling to that FHA buyer because they’re for sure going to do the proper research to make sure there’s nothing that’s going to put that loan in jeopardy.
Mike: Right, right. Awesome. Kevin, if folks want to learn more about you and absorb some more of your knowledge, where do they go?
Kevin: Our website is Title Rate, R-A-T-E, so TitleRate.com. You can download all of my books on there. My best-selling book with Ron LeGrand, “Title Insurance Tips & Secrets” book with Lex Levinrad. The books are all on there. We have a mobile app on there, a closing cost calculator that they can use. Everything is state of the art. Or just give our office a call. I’m available. My staff is available. We’re all trained on investor procedures so we’re happy to answer any questions and kind of walk you through that process to make sure that you’re protected, we’re protected, and we all get out of the deal making some money.
Mike: That’s fantastic. Kevin, thanks so much for your time today. I appreciate it. That’s great information and this is exactly, I’m sure there’s a lot of people that are listening to this right now that just learned a ton. Me included, so thank you very much.
Kevin: It’s our pleasure to educate, empower, and make sure we’re all making money.
Mike: All right buddy, have a great day. Appreciate you.
Kevin: Thank you.
Mike: All right.
Thanks for joining us for today’s FlipNerd.com podcast. To watch or listen to more great shows, please visit FlipNerd.com or visit us in the iTunes store. To access the most robust social platform in existence for real estate investors where you can find off-market wholesale deals, great vendors, literally in your market, and to socialize with other like-minded individuals, please visit the one, the only FlipNerd.com.
If you’re not yet a member, you can set up a free account in about 30 seconds. It’s pretty much the coolest site that’s every existed in the real estate investing industry. So get on over to FlipNerd.com.
Thanks for joining us for today’s FlipNerd.com podcast. To watch or listen to more great shows, please visit FlipNerd.com or visit us in the iTunes store. To access the most robust social platform in existence for real estate investors where you can find off-market wholesale deals, great vendors, literally in your market, and to socialize with other like-minded individuals, please visit the one, the only FlipNerd.com.
If you’re not yet a member, you can set up a free account in about 30 seconds. It’s pretty much the coolest site that’s every existed in the real estate investing industry. So get on over to FlipNerd.com.
