In my green Cash Flow System that comes with our Quick Turn Real Estate School are all the forms and complete instructions needed to walk into a seller’s home with a folder and walk out owning it, (i.e.) with a “table top closing.”
For years I’ve taught the process, done countless bets on stage, perfected the craft myself in a few hundred houses and worked closely with partners who did the same.
In my case we rarely had a problem with this process, had none we didn’t fix quickly and picked up millions in free equity doing it.
But, that’s my case. I’d been in the business ten years before I took over my first house subject to. No one was teaching it back then and I discovered it by accident and I guess I’m somewhat responsible for thousands of investors using the technique today. Too bad I didn’t patent the process. I’d be getting royalties that would support the Donald, (or my jet).
If I could go into every home with my students and make sure they do the process right and don’t make promises they can’t keep, I wouldn’t be writing this article and my opinion would be different. But, that’s not the case and I strongly recommend…
You Cease And Desist From
Doing Table Top Closings
With Few Exceptions
First I’ll describe the problem, then the solution and then justify my statement.
Here are the problems:
- New investors want the deal so bad some will say anything the seller wants to hear to get the deed. Stuff like: “I’ll guarantee your payments,” or “I’ll have your loan paid off in _______ months,” etc. Making these promises you can’t keep can lead to back end problems if they’re not.
- New investors are reluctant to get a CYA letter signed acknowledging the bank can call the loan due and you aren’t assuming it. They fear it will kill the deal, so it’s easier not to bring it up: This is a no-no and will probably lead to problems if not completely disclosed in writing.
- If the table top closing is managed by a new investor who is unsure of himself, the lack of confidence may be transferred to the seller and cause doubt about the legitimacy of the transaction sometimes after the sale. By the time it gets discussed with relatives and friends a few times after the seller problem is solved this doubt may lead to some further action on the seller’s part. There isn’t much they can do, but who wants the aggravation and possible attorneys fees to answer.
- Many new investors are so paralyzed by fear of doing a table top closing they wind up doing nothing. Frankly, that’s not hard for me to understand since it involves a contract and a deed that literally changes ownership on the spot. That’s a lot for a newbie to absorb. Therefore, it would help many folks to relieve themselves of the pressure and let an attorney handle the legal docs, which I’ll discuss shortly.
- Since a deed is involved, it must be done correctly or the investor may have to track down the seller later to get a new one signed, which may not be easy to do if they’ve left town or had an attitude change. In addition, a notary must sign on the deed before it can be recorded and some folks let that be a stumbling block. All attorneys have notaries on staff. Do it my way and you won’t need to find one.
The Solution
You guessed it; let your attorney do the closing for you. If you do, all problems above go away.
- If you make promises, they will be corrected at closing because your attorney must disclose the reality.
- All the proper forms and agreements, including a CYA, will be prepared by your attorney so you don’t have to.
- Your seller will know it’s been done professionally and lingering doubts will disappear.
- You won’t lose the deal because of fear of agreements.
Here are a few more reasons why you should let a professional do what he does best so you can do what you do best:
- It will only cost you about $300.00 to get it done right.
- You will save more than that by not buying title insurance because an attorney is closing, not a title company. Title companies can’t prepare legal documents unless they write insurance which can cost $500.00 – $1500.00 or more. No need to buy title insurance if you’re not at risk, but you must still get a title search.
- If you ever do have a problem with the seller later, your attorney will be a great witness and the chances of even getting sued are drastically reduced simply because it was professionally closed.
- If your attorney closes he/she will do the recording. That keeps you out of the court houses.
- Legislators in a few states are taking a look at ‘subject to’ deals because a few unscrupulous investors did not keep their promises and you’ll sleep better knowing you’re doing it right. You should go to www.NARHRI.org right now and become a member so you can stay abreast of our national efforts to head off bad legislation and any new laws concerning real estate proposed in your state and others.
What’s The Downside?
There’s only one I can think of and that is you may lose a deal sometime because the seller has a cooling off period and changes their mind.
That’s certainly possible, but if it does happen, my experience tells me it’s for the best. Investors create problems for themselves when they try to force their will on people who have a change of heart after they come to grips with the fact there may be a better way to sell then leaving the loan in your name. For most who agree to do so, it’s the right thing for them. For some its not, especially if it wasn’t clearly disclosed or they didn’t understand until the next day when they sought help.
It should only take 3 days for you to get it professionally closed by your attorney. If they want out during that time, you’d be well advised to cooperate and leave the door open when they come back later, and many will if you were pleasant to deal with.
Frankly, if you’re using the yellow letter and following up properly, you should have more deals than you can handle and the small risk of losing one shouldn’t be a big concern.
Come see me at Massive Income Strategies Boot Camp in December in Daytona Beach and I’ll show you how truly easy it is to send letters, sort prospects, get house while still in your PJ’s. I’ll mail some letters to homeowners in the area the day before the class, answer calls on the red phone during class and send someone out to buy the houses on the spot…right before your eyes.
I did this in Phoenix in May and sent Brian and Lynette Wolff out since they live there and here’s the verifiable results:
- Sent 1200 letters
- Bought 5 houses while there
- Got $255,000 in free equity plus a ‘67 Mustang
- They had several more hot leads to follow up on when I left.
This stuff just ain’t that hard, yet most people want to over complicate it and spend their time doing non productive crap that doesn’t make them money. I spent about an hour answering numerous calls live before forwarding to Patlive and the Wolffs spent about 3 hours getting 5 houses with a quarter mil equity. Compare that to your day job.
By the way, here’s a strong word of warning…
This Will Be The Last MIS
I Will Personally Teach
If you intend to make it, procrastination will surely prevent you from going. It’s already 2/3rd full and we’ll have a waiting list as long as your leg. This event is always full, even if it weren’t my last, due to the Christmas party and Masters graduation and past reputation. No doubt it will be packed to the rafters this year and Daytona Beach doesn’t hurt. It’s better than Chicago in mid December.
If you can’t pay the whole $5,000 up front call 1-800-567-6128 and ask my staff to put you on a payment plan or something, but don’t miss out.
You might ask about our Masters program while you’re at it cause MIS is one of the requirements to graduate and it’s a better deal. Tell them you’re an FFN member and get a nice surprise.
I’ve got a few more nice surprises for you at this event, too. Such as how you can start making $20,000 per month from all the worthless leads you’re currently getting and throwing away. All from the same yellow letter campaign with no more cost. This baby is a business within your business that can easily produce more cash flow than your real estate. It’s just one of many of Papa’s better ideas I only disclose at MIS.
Just to clarify, I didn’t say I was quitting after December. I only said it was my last MIS, so don’t let the rumors start flying. Five days of brain sucking teaching in a row is just getting a little much for this 60 year old body to handle and Beverly said it best…”Ron, the older you get the harder you work. I thought it was supposed to be the other way around!!”
She’s right of course, but crap, I’m just now in my prime. I’m not quitting, but it wouldn’t hurt to drop down a gear or two so anything that’s 5 days long is the first to go.
One last thing. There will be a time when you get to a house and a U-Haul is in the driveway and the sellers are leaving town shortly. In this case you may have no choice but to do a table top closing, the old fashion way, and get all the forms and Warranty Deed to Trustee signed yourself. If you have to do it, but make sure the CYA gets signed and full disclosure takes place. If a U-Haul is present you won’t lose the deal. Don’t forget to tell the seller if they prefer, they can leave all or some of the furniture behind. It’s one of the benefits of dealing with you. You’ll be amazed at what you’ll get if you open the door for opportunity to enter.
Peace
Ron
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