- December 6, 2019
- Posted by: august19
- Category: Podcast
Note investing can be a lucrative investment while also helping homeowners with their loan. Transfer of deeds has different policies and requirements depending on the location or country you are in. In this episode, host Gail Anthony Greenberg engages with the audience in a fireside chat to discuss topics on quitclaims, FICO, the deed transfer process depending on location, and more about note investments.
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On Notes And Deed Transfer Process
One of the things that I would like to do is something experimental. I would love to have a real fireside chat with everyone. I thought it would be fun to do a lightning round of what happened. If you’re a member of the Notes and Bolts Facebook group, it’s fun seeing on Fridays what happened. I talk about it constantly that I’m renovating a house down South. The work started in the middle of August and it’s been puttering along slowly. I found out that the reason was that my contractor was renovating a much larger house nearby for an attorney from Chicago who scared and intimidated him. When he was supposed to be working on my house, if this guy complained or wanted them to run over and do something, they would do it. My house was like the little beggar child, always neglected and waiting for attention.
Something great happened. This lawyer from Chicago finally upset my contractor so much that my contractor broke up with him. Now, there are many people at my house working fast that I can barely stay ahead of them in terms of the decisions that I have to make. One of the things that happened when I was in the middle of a million other things was I got a phone call. I was told that I had to give them in an hour a complete map of where all the cam lights and the recess lights were supposed to be. I had to give them the actual math. I couldn’t say, “Six in the living room.” I’ve established myself as picky and detail-oriented that they’re afraid to make any decisions on their own, lest I will reject them and be upset. This is what I’ve bought myself. I have to do it. Roger said it’s a horrible decision.
There are many factors because these are LEDs. They’re brighter than normal bulbs, but the ceilings are twelve feet. I’ve no idea how many of those you need in a room to make it adequately lit. I don’t know how they should be placed, but thank goodness for Google. That’s all I can say because it’s a problem solved. I don’t know if I did the right thing, but I did something. Who’s next? What just happened? People enjoy reading each other’s, “What just happened?” comments in the Notes and Bolts. John is asking, “How come they didn’t ask me where I want all the electrical outlets as well?” I’ll tell you why, John. I gave them an unbelievable map. I don’t know if other people go to these kinds of lengths.
This is a long-distance renovation, but it’s not a business deal. This is going to be my house. I’m trying and somewhat succeeding. There’s a whole key here. I want outlets, like a normal lamp outlet and an outlet with a USB at table height on each side of the bed. I had to show the beds and everything. I did a whole separate map showing them exactly where the over the table light is. It’s ridiculous. After I created this, I felt like they’ll either be happy or they think I’m a complete maniac. This is probably why they wouldn’t figure out where to put the cam lights themselves because they thought, “Anybody would make a map like that. We better not make any of our own decisions.” Ian, tell us what you did. What just happened?
I paid off my own personal house or haven’t yet because I don’t want that loan to go away. My credit score knocked down a tad. I applied for the HELOC. I’m going to let that go through first and once that goes through, I’m going to pay off my own house and then roll it. I got my EIN number rolling. I’m going to use that to start a beautiful journey in the notes here. I got everything ready on my end, I just have to get educated.To get everything ready on your end, you have to get educated. Click To Tweet
You are not going to pay off your entire mortgage?
I am, but not until the HELOC goes through because that will ding my credit. My mortgage is my oldest line of credit. As soon as it moves away, it takes a hit and that might ding or giving me a worse interest rate for getting this line of credit. I have one payment left and I am done.
Did you consult anyone in the credit business about what the implications would be? I had a HELOC and no mortgage. It was very bad from the recommendation to improve my credit score. I’m not saying my credit score is bad, but they want you to have installment loans. When I paid off my car, there’s an instant drop in my credit score. When I had a HELOC and no mortgage, the recommendation was to get rid of your HELOC and have an installment loan. I understand that’s not what you want because you want the cash to do notes, which I think is a great idea. You might brace yourself for a little bit of a sag there any way in your credit score.
I can deal with it.
You might want to take out a small loan. I don’t know why. FICO, it’s the worst thing in the world. Chris was talking about how he almost sold one of his condos. He had two foreclosed condos in Florida at the same time, in the same building. One of them was under contract to a woman from England. The HOA wouldn’t approve her as a buyer because she didn’t have a FICO score because people in Europe apparently don’t have FICO scores. They live without the tyranny of the FICO system and they have health care. If you ever heard Merrill Chandler from CreditSense, he talks about FICO. It is not in the credit business. They are a predictive company and their biggest client is the NFL. What they do for the NFL is to tell them based on incredible research which teams should play each other on which days to garner the largest audience. Somehow, they’ve taken this brand of genius and turned it on all of us and made our lives miserable. Anyway, I hope it goes well. How much money are you putting on? If we’re not being too personal, are you hoping to put into nets in the next year?
Chris was telling me to always keep $5,000 to $7,000. I try to stay with performing because I have a full-time job and I have no desire to leave it, but I was looking to put around $70,000 or $80,000. I’ll spread that out over a couple and start small and see how it goes from there.
Are you going to buy performers?
Yes, even though that might not work out as well. That was his advice. I liked that. Anything can go bad, but I want to keep my job and I don’t have the time.
What kind of work do you do, Ian?
I work for the conservation district. Being a single dad, I still want to have my weekends for my son. I have the 9:00 to 5:00 for conservation districts. I love my work, so I’m not going to quit anytime soon, even if this does work out well. That’s what I am looking to do.Being able to select quit claim deed is going to take you out of that realm of having to pay the taxes. Click To Tweet
We don’t have that many people who love their jobs. I will tell Chris that you all were disappointed he wasn’t here. John is helping me with my electrical plan. John, I am so far away. I am just praying that this guy is going to do it correctly. I have a great general contractor. I’m thinking he’s great. They haven’t finished yet, so I won’t know until I’m living there and something goes horribly wrong, but he seems like he’s good at keeping an eye on everybody. Roy, what happened to you? I’m waiting to see you say something other than insulting FICO, which I’m totally down with. Bankers are looking to adopt the FICO in the EU. Have they not noticed how unhappy we all are? My property manager was just done. Ian, thank you so much for sharing your, “What has happened to us?”
I will move on to give you something hopefully of worth. Chris has asked me many times to do a demonstration of Simplifile. I don’t know how many of you are on Simplifile, but if you buy contracts for deed, you are faced every time with getting your deeds recorded. Oftentimes, it’s a very simple matter to do yourself. Even Chris, as much as he does everything, he did not ever attempt to eFile a deed on his own until we bought over 100 assets. Since we were interested in speed. Sometimes handing them off to an Orion as much as they are great at what they do and they’re very thorough, they are definitely the ones to use when you have a problematic deed or any kind of problematic paperwork to work through. They do great collateral reviews. They do great collateral repair. They do recordings. When I was starting a foreclosure, it was one of the very first notes I ever bought. I didn’t have the habits that I have now. Attorney looked on the eve of filing something that had to be filed very quickly.
He said, “Do you realize that your assignment of mortgage was never recorded on this?” Since I have a Simplifile account and I am not afraid to use it, I was like, “Give me half-an-hour. It will be sent. I don’t know how quickly they’ll record it, but it will be there for them.” It got recorded within a couple of hours and that saved the day. I would say, even if you’re not thinking that you’re going to do all your in-deed recording, it’s rather good to open an account with Simplifile while it’s free. There’s no monthly charge or anything. You only pay when you use it. It’s great to have it up and running and waiting for those critical moments where you might have to do something. With no further ado, let me take you into Simplifile. It doesn’t look too scary so far. I’ll take you into my account. When you sign up with Simplifile, you have to try to wave you through. You do have to apply ahead of time and be approved. It is not a difficult process. They just want to gather a little bit of information about you and get you set up in their system.
They take it a little seriously because they’re going to be the platform that you use to send stuff to all these different recording offices. They probably have agreed in advance with the people in the recording offices that they’re going to screen people a little bit and not kind of loose maniacs. Tom asks, “Do most counties except Simplifile?” Many do. I can give you an example. I had a whole bunch of deeds in Indiana and it tends to be the bigger cities. Indiana, Indianapolis accepts eFile. It’s annoying when you’re used to being able to use Simplifile to discover how many most major cities do allow it. They tend to have the infrastructure to be able to connect and work with an online platform. Though weirdly, Gary, which is a pretty big place in Indiana, they do not allow Simplifile. Some counties will allow you to eFile some documents but not deeds. That’s annoying because you do end up doing a fair amount of mailing of deeds. Out of the recent 100 or so deeds that we bought, there was a lot that we probably were able to eFile about half, maybe not quite. It’s definitely worth a try.
I’m going to tell you the basic. One of the ways that they could see who will allow us to come over here by and click on counties. It’s going to show the counties that I have already. I have three in Mississippi. I have one in Minnesota. It is too much because they require a lot of extra documents. Go to be with counties is on Simplifile. Most states have way more counties in this. Here’s Alabama. There are maybe eighteen counties here. That’s a fraction of the counties in Alabama. California has no one-click county. One-click county means that they will allow you to put them on your list by clicking on it. When counties are not a one-click county, they might still allow eFiling, but they’re going to put you through more of a process to be able to have access to them for eFiling. There are a lot of counties. I ran into this. It seems like more counties are requiring something called a memorandum of understanding.
What will happen is that you’ll be in Simplifile to do something. It’s going to prompt you. I am going to put in the county that I know is going to say no to me. It now says requires registration. There were other ones above that. These guys are all going to let you select them and go ahead and create an eFiling package for Sumter, South Carolina. When you try to click on there, you have to register and that is going a little bit of a process or a big giant process. These are the memorandums of understanding. You have to fill it out. It’s usually about nine pages long. It’s basic agreements about the disclaimer. It’s like, “Please don’t sue us if we do something wrong.” You send that in. Weirdly, if you don’t check the box, they won’t even get your memorandum of understanding. I went here and filled one of these out and submitted it to the county, but because I didn’t check this, the two weeks that they require you to give them for them to review it had not even begun. I didn’t find that out until I have complained to Simplifile that they were not allowing me to file any deeds.
There’s a little bit of a hoo-ha that you have to get through. Let’s pretend things are easy. I’ll tell you, if you buy in Birmingham, Alabama, they are one of the easiest places to file something. They will record anything within an hour. I’m not encouraging people to not submit things promptly, but just know that if you’re ever in a pinch, you can get it done very fast in Birmingham, Alabama. Here are a bunch of deeds. This is Charles City, Iowa. When you go to file something on Simplifile, it’s good to have the actual document up on your screen because the first things that they are going to ask you is for the county. We need Floyd County, Iowa. They’re not making us jump through hoops. This is 505 East Street. This is the first thing you do. You’ll select your county and hopefully, they will let you select it without a lot of difficulties. You’re going to give your package a name. The only thing that makes sense is to name it the address of the property.
This is the moment of truth. Select document type. This is where you’re going to find out whether even they’ll let you do a deed. You can type it in to see if anything comes up. These people not only let you do deeds, but they let you have all kinds of deeds. If you have an opportunity to choose quitclaim deed, that’s what you want to do because when you’re eFiling a deed, the main difference you’re going to discover between a quick claim deed versus another kind of deed is that with quitclaim deeds, you do not have to pay delinquent taxes to record the deed. With a trust deed or pretty much any other kind of deed, you do. Being able to select quitclaim deed is going to take you out of that realm of having to pay the taxes on here or basically have your recording rejected because it hasn’t been certified by the treasurer.
I keep different folders for executed deeds, which are the ones that have been signed by the seller and are all ready to rock and roll. I have another folder for recorded deeds. I found it very helpful to be able to go into recorded deeds and see if something has been recorded. Here is the deed we need. Feel free to ask questions because I know this is exciting stuff. The dots show the area in which you can have text. There will be an occasion where your document will look like this and you’ll be like, “Now what?” What you need to do is get familiar with the taskbar on the top. This allows you to either move the page or shrink it down. Ohio requires very strict margins on every page of a deed. It charges you extra money for $20, but if you’re doing a number of them, it’s annoying. Who wants to pay extra money over something like that? Now you can see the whole deed.
There are no margins in the second, third pages. That’s easy. This illustrates something else that happens. They want you to fill in the information for this case. You hit the little plus to make it jump up. The grantee is Onyx & Shadow Equities. That’s one of Chris’ LLCs. I don’t know if he uses this generally be known, but Onyx and Shadow were his beloved Greyhound dogs. He doesn’t have a dog right now. I think he misses it. They’re looking for the execution date which is October 3rd. Tax-exempt. They are not asking about property taxes. They are asking whether it is tax-exempt for transfer tax purposes. There are many types of transactions that, depending on the county and state, might be tax-exempt. Transfers between family members, transfers from you into a trust that you own, transfer to a borrower who has paid off their loan, a transfer to a nonprofit. There’s a whole bunch of categories that none of which applied to us generally. You are going to say no.FICO is actually not in the credit business; they are a predictive company. Click To Tweet
Tennessee definitely asks for it, Arizona. There are a lot of states that want that. It’s just a sheet. I’m not sure why they ask for it because you are having the deed, what amount of money changed hands here, but it gives a few more details of the deal in a more concise and standardized format. Some of the states wanted it notarized by the buyer and the seller. Some don’t care. It’s a very mixed bag. You’ll run into this. When you see something like this, you could ignore these and go ahead and try to record this. What is going to happen is that you will get a rejection. You’ll see a million websites that are like Deed.com that will give you that form that you fill it out. When you try to then save it so that you can upload it here. They’re going to require you to pay them.
You don’t want to look for any website for these forms other than Michigan.gov or Iowa.gov. These are official and free a website. You have to go find the form, fill it out, scan it, and save it as a PDF. They only accept PDFs on this website. Uploading your Word documents and when you’ve added, you’re going to come back and hit add and click on it. It’s going to take me back where I can view the document. This is highlighted. It shows you that’s uploaded. We still have our original right here or deed is still here. I uploaded the wrong documents. Let me show you something else that’s very handy to know, which is how to erase something that’s in here.
The little trash in here, that lets you delete the page. If this was a multi-page document, it would give you an option. We also have our declaration of value. This document is ready to go. The final thing to do is to check the box that says it’s recordable and hit done. If you have multiple entities, you can have a payment account. These are all bank account numbers. They even let you break it up according to. I always pay recording fees out of this account but the taxes, I don’t go out of this account. They let you mess around with that. If by any chance you submit a deed and then you realize, “I didn’t have the right account.” You basically have until that evening to change this and it should come out of the right account. If everything looks good at this point, you check the box and you hit submit. I’m not going to do it because this deed is already recorded. It will mess things up. That is how it is done.
Does the type of deed affect whether transfer taxes are applied? No, if you’re in a county that charges, transfer tax, it doesn’t matter what kind of deed, you’re going to pay the transfer for that. The big tax difference is for a quitclaim and another kind of deed is whether they make you pay the delinquent taxes or even the current due taxes in order to transfer the deed. A trust deed, as it would be if you were doing a closing, everything has to be paid for that property to transfer. Transfer tax, some counties don’t even charge its very building. There are places, like most counties in Pennsylvania, my state. I hate to be down on Pennsylvania, buy I dislike Pennsylvania from a real estate standpoint. My personal home is the only thing I will ever buy in Pennsylvania. They charge an insane amount of tax. The transfer tax in Pennsylvania is not based on what you paid. It’s based on the assessment value. It doesn’t matter how much of a bargain you got. It’s insane. We’ll spend recording quitclaim deed in Pennsylvania.
Hopefully, this is helpful. Does this make you feel like, “I can do that?” Does it feel like, “Forget it, I’m going to hire Ryan to do all of my recordings?” A few brave souls saying they might do it. Are there any other questions? Jamie says, “My wife has been using Simplifile for us and she seems to like it.” There are other ones. The funny thing, Jamie, about Simplifile is I have a friend in Florida who uses a different eFiling website. The reason she uses it is because Simplifile charges people different fees, like membership. I guess your per recording costs. They penalize people in some states. Like my friend, who lives in Florida, for some reason, it was going to be ridiculously expensive. I should correct myself. It’s been so long since I joined Simplifile. I can’t remember if there was a joining fee or a setup fee. Maybe there was because that was probably what she was having trouble with.
Do you have other thoughts or questions about Simplifile or about anything else? There are certain things that to me have become very important. One is the ability to do wires from home on a computer. That’s something that I would look for because having to go to a bank, if you’re a major player in the note business or if you have a regular job, how many things are going to end up buying, but it is hugely valuable to be able to send wires from home. That is something that I would absolutely look for. Chris loves Wells Fargo. Mostly because he has a great relationship with his local Wells Fargo bank manager and he gets lots of princely treatment there. Personally, my Wells Fargo, they’re difficult and did not give me the kind of freedom that TD Bank gave me. TD does let me wire from home.
My problem with TD and why I wouldn’t totally recommend them is they have a limit on your wires. Their limit is $15,000 and if you need to send a $16,000 wire, you can’t. You can’t call them for approval. You can’t do anything other than go into the bank, which totally defeats the purpose. You can apply for a larger limit, but if you don’t use it a lot, they take it away after a few months as it’s a security issue. It’s cumbersome and difficult. I wouldn’t totally recommend it. I don’t know where you live, if you even have a TD but for that reason, I would not recommend them. Post in Notes and Bolts where you live so people can also recommend local banks if they know of good ones. I think that would be absolutely the best way to proceed with this. I love TD in general, but this wiring thing has been a problem because I’m big shot now and I sent gigantic wires.
Anybody else? Any old business? Any new business? It looks like that’s it for us. Thanks everybody once again for joining us. It’s always great to spend this time. I’ve been away for a couple of weeks, so I’m particularly delighted to have this time and to have you all to myself. Everyone have a wonderful time. I won’t be back the following week because there’ll be back visiting my house down south. Hopefully, the weather will be better. It was 40 degrees when I was there. Thanks, everybody. Please be sure to join us at Notes and Bolts from the Good Deeds Note Investing Podcast on Facebook. If you’re not already a member. Please stay in touch and remember to go out and do some good deeds.
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