Mark Podolsky discusses ways to close on a land deal that’s less than $5,000. Instead of closing at a title company, he shares lower cost ways since it’s an inexpensive deal.
Mark Podolsky elaborates on his 3 ways that he closes on inexpensive land parcels, including mobile notaries. Listen in as he shares how this is done.
Mike: Welcome back to the FlipNerd.com REI classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now let’s meet today’s expert host.
Mark: Hey, it’s Mark Podolsky, the Land Geek, with thelandgeek.com, and I’m thrilled to be back as a host of the REI classroom. So, for today, I want to talk about, in our land niche, three ways to close as a buyer on a piece of property.
Mike: This show is sponsored by passiverental.com.
Mark: Now, I know you’re thinking, if you’re in traditional real estate, “There’s only one way to close on a real estate transaction, and that’s through a title company.” And, yes, that is the best way to close on a typical real estate transaction.
But sometimes, in our little land niche, when we’re buying and selling these raw land parcels for less than $5,000, it doesn’t make a lot of sense to actually close through a title company, because we can actually outsource a lot of our due diligence or our abstractor might have cost $80, but for $11 overseas, we hook in with a title company that has access to US-based data, and they pull the chain of title, and a piece of raw land that’s $5,000 or less, we don’t have to go through the expense and the delays of a title company.
So, how do we close on these parcels when we feel really comfortable that we can just close directly with the seller? So this is what we do. We say – and I know you’re going to laugh, but this is what we do 90% of the time – just like this. You can take notes if you want.
I’ll say, “Hey, we’re going to buy this piece of property.” Now, this is, of course, after due diligence. “I’m going to go ahead and email you the deed. You’re going to print it off. You’re going to sign it. You’re going to go to your local bank or UPS store, have it notarized. You’re going to send it back to me. Once I get it back, I’m going to record it. Once it gets recorded, I’m going to send you a check.” Ninety percent of the time, when I say it just like that, they say, “Okay.”
Now, again, we’re not talking about real money here. This is $5,000 or less. They’ll do it. Ten percent of the time, they’ll say, “Wait a second. I’m going to deed you my property, you’re going to record it, and then I’m going to wait for you to send me a check? No way, José.”
So I say, “Okay. Okay. That’s okay.” This is the second way we’re going to close. And what we’re going to do is what we call a “mobile notary.”
So we’ll have the mobile notary act as de facto escrow. So what we’ll do is we’ll have a company like 123notary.com go out with the deed, meet them at a local Starbucks or McDonald’s or wherever they want to meet, right? Our seller will then sign the deed that we’ve prepared in front of the notary. The notary will then notarize it. We will then have a company called Simplifile. So the notary will then record that deed, right there and then, with Simplifile.
Once we get confirmation that the deed has been recorded, we’ll have the notary give them the check, right? So we always do this in the morning so that if there’s a delay with the recorder . . . But usually, with Simplifile, it’s instantaneous recording. So that is the second way we close.
Now, if it’s in a county that doesn’t use Simplifile, then what we’ll typically do is we’ll give half the money to the notary, and then we’ll hold back half the money until it gets recorded, because if that deed gets kicked back, we want to have that protection.
So the first way is to close directly, the second way is to close via mobile notary de facto escrow, and the third way, and this is on transactions that are $5,000 or more . . . We want to sleep really well at night. We don’t want to take any risk. We will go through a title company.
Anyways, I hope that’s really helpful and informative. If you want to learn more, I’m Mark Podolsky, the Land Geek. Just go to thelandgeek.com and I’ll see you on the other side. Thanks.
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