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Open Mic Night : Forced-Placed Insurance Letters

GDNI 82 | Forced-Placed Insurance Letters

 

Insurance is a critical part of every business and in this episode, Chris Seveney and Gail Anthony Greenberg discuss how they are incorporating insurances into loans. Specifically, they talk about forced-placed insurance as an integral part of their security agreement. Moreover, they answer critical note related questions from Dave and Eric who share some experiences of clients not paying up and kept giving false hopes on paying and BPO concerns respectively. Listen more from this Open Mic Night as Chris and Gail answers their queries and relates it to personal investment experiences.

Listen to the podcast here:

Open Mic Night : Forced-Placed Insurance Letters

Welcome to another episode of the Good Deeds Note Investing Open Mic Night. I’m here with the always surprising Christopher Seveney. Let’s start talking about things that people are asking. Do you want to talk about forced place insurance letters?

You probably be better to discuss this because I use Madison.

I’ve sent a lot of these. I use JB Lloyd for my insurance. When I first became aware early on that I could send these letters to people and then start charging their insurance to their loan if they didn’t start getting insurance on their own. I was very excited. Honestly, with a lot of the loans that I have are land contracts. I don’t know if those people are ever going to get to the ends of their loans and they’re ever going to reimburse me for their insurance. I look at it as something that I pay for liability reasons, but yes, to your point. We have a question, “When I asked, they gave me copies of the letters that you sent, but they are available online also.”

They’re standard form letters that somebody puts them out there of what a CFPB or somebody, but they’re pretty standard form letters.

The main thing that they say is, we don’t have proof of your insurance, so we have obtained the insurance. It’s very possible that the insurance that we have is more expensive and not as good as insurance that you could obtain on your own. You need to show us your insurance and until you do, we have no choice but to buy our own insurance and it is being charged to your loan. I saw a reference to three letters. There are only two required. You send them 30 days apart and you don’t have to send them certified or anything.

You don’t have to do much, you send them. Until your servicer that you’ve done that, they will ask you for the individual bill for each insurance policy. When you have a master policy and then each individual property is like a little piece of that premium. JB Lloyd’s call it a notification. You generate that. Even though I pay the insurance monthly, it will generate an annual premium. You send out to your servicer and they will slam that baby onto the loan. We may or may not have received the money.

I’ll explain how I run the insurance. The day that I buy those notes. Usually that day or next day, I send Beth or JB Lloyd a template. I fill out that template and send it to them and I put insurance on the properties.

You don’t go into the portal and just do it?

If you’re buying more than ten, they’ll put them in for you.

How many people buy more than ten regularly?

You buy the note and you log into the portal, the next day or a few days later, I put insurance based on the date that I acquired to note. People are going to say, “Why are you doing that if you haven’t notified the borrower yet?” One makes you pay the full year in advance, but with JB Lloyd, you’re paying monthly. What happens is if you find out that the borrower has insurance, you send them the proof of insurance and they will retroactively cancel that and not charge you.

They refund it. 

You’re putting insurance on it even though you don’t know sometimes. If you could check the servicing history, you can see whether or not the borrower had it or not, but I put the insurance on it no matter what. The worst case is, if I don’t get refunded $50 for a month or whatever it is, then you don’t have $50, but the insurance is well worth the risk.

If it’s a contract for deed, you have liability. That’s a big part of it, too. Say you’re willing to lose the money that you’ve got invested in the house because it burns down. That’s one thing. You don’t want to be personally liable for something that happens.

Back to the question about the letters. Certain servicers will send the letters for you. Certain ones don’t. When you interview your servicer that’s questioned ask because Madison Management sends those letters for you. You don’t need to send those letters if you use Madison.

You always have full service with them. You don’t do client managed. Will they do it if your client managed? 

You need to ask somebody what they're prepared to pay because it doesn't matter what they can afford. Click To Tweet

When a loan gets boarded, I have it as full service. I only transferred to client managed after we’re in foreclosure, bankruptcy or there may be a point in time where after a month or two I will swap it out. I intentionally keep it managed by them to start because I’d rather have them deal with all of that. For them to remember to send out the letters and stuff. To me, it’s worth $50.

$50 being the difference between the $40 you pay for servicing versus $90. If you have a contract for deed, once that deed transfers to you, you have to have insurance. You could be personally liable.

Anyone can sue anybody for anything, remember that. We ask questions, “Is that from Madison the insurance itself?” You can get force-placed insurance through your servicer. A lot of times the servicer uses the same people, but what they do is a mark it up by $10 or $15 extra. If it’s a performing asset, you got the borrower who’s paying that, but if it’s non-performing it’s probably coming out of your pockets.

Bad money after good.

I find it easier to control it because also if you get it and the borrower has it and you’re trying to get that refund from Madison, good luck.

Do you know who Madison uses? 

I started out using Ross Diversified and the policies were good, but you had to pay a year in advance. If you’re paying ten notes at $1,000 a month, that’s $10,000 coming out of your pocket and then you’re getting back in three months. You have to mail the check. It’s a lot of money going out of your pockets.

Try to hold the money.

Don’t spend it on things you shouldn’t. Christina said, “How are charges for FPI charge a borrower? How does it show up on their end?” It’s part of the escrow.

The charge it doesn’t become part of the balance. 

For people who use Madison on the front page of the loan detail, if you scroll down, there’s a charges and information. In there, you can see it would show your force- place insurance and that would be considered sometimes an advance or as part of the escrow. Depending on whether it’s performing or not performing and that’s where it goes.

You asked about the first-timers going through non-performing. I had a performing CFD that I got and it’s a pretty good deal. It was about $16,000. 

The UPB was about $37,000. The home with Zillow added around $60,000 to $70,000. I was like, “This thing is safe.” $60,000 it’s not a bad thing. I went and got it. I picked it up and they were paying ahead, what could go wrong if they split up and then they stopped paying. I tried reaching out. Because this is Nebraska, that was my first mistake because Madison doesn’t service Nebraska. Elrod doesn’t service Nebraska. I had to go with FCI. I know we’ve said some negative things about them, but their customer service with me at least had been pretty good. They’re answering the phones or they’re answering emails and I’m having good luck.

Things crossed so I can continue. They’ve stopped paying and then I’m doing the foreclosure process. It ended up contractor for deed. The lawyer said, “We’re going to do the foreclosure and it’s better.” I was like, “I don’t know. I’ll take your word for it because you’re the lawyer, you’re in Nebraska and I’m not.” We’re in the foreclosure process. The one strange thing about this one is that they did had to assign a military something. I asked him about that and they said, “We do this for all the cases.” because one time they went through the process and because they didn’t check for the military service member relief.

It’s a service member relief.

They turn around and burn them. They do that for everyone, this particular law firm. The thing that we have is the first hearing. Apparently, it’s my telephone. That’s what’s on my list and this is the first non-performing I’ve ever had. I’m a little nervous about how it’s going to go and what’s going to happen. I doubt very seriously, I did get a hold of the borrower one time and then talk to her and she’s been very nice and say, “What’s going on? We’ll try to work it out.”

GDNI 82 | Forced-Placed Insurance Letters
Forced-Placed Insurance Letters: Anyone can sue anybody for anything, remember that.

 

Are they battling about who keeps the house or who should be paying for the house?

The borrower won’t even talk to me. I’ve called multiple times and apparently when I call because I’m not calling for my personal number, I have an 800 number and I use that and she’s automatically blocking them. She has my number. She knows how to get a hold of me. They never answered the phone and I can’t get anything. All I know is that her husband left and it’s just her. It’s only $300 a month. That’s what’s unreal. The rent in this area is $600 a month and in Nebraska in this particular town. Better off trying to make a deal with me. I tried and she didn’t answer the phone. I already had insurance because I couldn’t find any proof in the documentation, so I went ahead and got first place with Ross Diversified and did like you said Chris, get on there and then try to get the proof later on. They never gave me proof and didn’t answer the letters. I went ahead and got her on there.

How long ago did they stop paying? When did you buy it?

I bought it in June 2018. At that time, I got a couple of payments and then they paid a couple more times. I think I had December’s payment in October. I’m jumping for joy. I bought it cheap and they’re paying ahead of time. December goes around and no more payments. January comes around and then I started calling and I’m trying to get a hold them and try to get the ball moving.

You are probably thinking, “It’s the holidays, maybe they got a little behind.”

I don’t know. They would never answer the phone. One of the numbers I had was the wrong number, and by the time I found out it’s the wrong number, I wasted a lot of time.

David, you mentioned there’s a hearing coming up. Is it a foreclosure hearing, mediation hearing? What type of hearing, do you know?

The hearing and the lawyer said that as soon as this hearing is over, they can file immediately a motion for review. She says this is pretty quick on Nebraska once this hearing goes. She expects that within a couple of weeks after the hearing and said I should have the house back unless she declared bankruptcy.

When did you start legal? Did you send a demand letter at the beginning?

The attorneys did a demand letter.

Was that in January, February, March, April, somewhere?

No, it was a little later. It was around May. My first one and I’m trying to be positive. When I looked at the servicing notes, she was calling in and said, “How much did she owe?” The servicing notes that she was going to call him back in a couple of weeks with payments, “I’ll pay him by check.” She did one time. She did make a January payment and the note said that she was going to call in and pay and get caught up at the end of February. I wasn’t going to do anything. She’s already calling in. About that time, that’s when March and April rolls around.

I’m trying to call her and try to get some details, “What’s going on?” I found out that they had split up. When I call, she wouldn’t answer the phone because she and her husband would split off apparently was using some free 800 numbers. I’m trying different phone numbers to call her and she didn’t answer. She didn’t know it was me, but I have called and when I did get a hold of her and talk to her, I gave her my number, I said, “You got my number if I call, please talk.” She sounded like she wanted to stay. It was in June and she said that she was waiting for her tax return. I was like, “When do you expect them?” She said, “I have to file.”

She didn’t want to file them because her husband was going to be on it then as well, you’ve got to do something. I told her that she had to think about her position and what she would like to do. At this point, I’m realizing that she’s not going to be able to afford to stay. I hinted that maybe I can do some financial assistance, Cash for Keys and get her out. She didn’t seem receptive to that. By the time we got off the phone, I said, “Let me know within a week what would you like to do?” I give her a week. It ended up being two weeks, over for the 4th of July holidays was coming around and I gave her a couple of weeks. Nothing going.

You mentioned with the payment being in a $300 and rents in the $600, it’s working against you because if she moves out, she’s going to have to pay double the payment. If she can’t pay the $300, how she going to pay the $600? It’s almost like she’s probably feeling stuck and figuring, “I’m going to ride this out for as long as possible.” 

I checked the servicing notes again. She had called in and asked what her options were because we’ve already went through the steps and demand letters and things like that. She didn’t respond to those. She did call FCI and asked what her options were, and said you got to call the lender at this point that it’s under foreclosure and try to work something out. I was hoping that maybe she didn’t want to try to work something out. I don’t think so. I think exactly what you’re saying. She’s riding this out. I’m moving forward. I did as best as I could to give her as many chances as possible. Maybe too many chances. It is one of those.

When people have legitimate problems and want to work it out, they call you or they certainly answer when you call them. Click To Tweet

That’s tough. She doesn’t sound like someone who has a career.

It did not sound at all that she was one of these types of people that have been there for several years and they did a modification. They were doing well. They made payments ahead of time. I didn’t see anywhere where they were overly late like a month after the modifications. Unfortunately, she doesn’t have a very high paying job and she’s not getting a lot of hours. It sounds like she’s part-time. Making $8.50 an hour in Nebraska.

She’s probably not in a hot Airbnb area where she ran out. 

Once this goes through and I’m going to have a house to deal with. I wish I could take off a few weeks and go there and see it. Look at it but I can’t.

We always say there’s nothing like Nebraska in February.

David, few questions. One is on the contract for deed, are both borrowers on it or is it just her or just him?

Both borrowers.

That makes it a little trickier too, was part of any deal. If he’s gone and you work something out, you’d have to have him relinquish his rights to her. The other question one person asks is, “Who were you using for an attorney? Was it through FCI or did you find your own?”

As you know, FCI, whenever you have loans with them, you have to use their approved attorneys. They gave me two or three attorneys that they used in Nebraska and I’d call them and reach out to each one of them. None of them are interested in this case, unfortunately. I went back to them and says, “Everybody else?” There was one person interested, but they were expensive. I asked if they had anybody else and they gave me this other name and I called them up and they seemed reasonably priced. They were in a town over, so close by. They’re still pretty expensive. The demand letters about $75. This one was $200. 

I paid $450 for one.

This was a learning experience.

It sounds like it’s going well. I can relate how excruciating it is when you have someone who keeps giving you hope. I spent 24 hours in the airport in Jamaica where every two hours they told us the plane was about to come. All told 24 hours of this, hopes dashed over and over again. When you think about it, you could have had a nice day on the beach. You didn’t have to be there getting disappointed. It’s emotionally difficult. I’m sure it’s very difficult for her also.

When I did talk to her, I did find out that the basement was flooded one time. I’m not looking forward to knowing what’s in there. She rented one and pumped it out.

David, another question for you because a lot of people who are on here and reading are always so fearful of talking to borrowers. Gail convinced me to start talking to borrowers. A lot of people sometimes feel intimidated or scared to call the borrowers. This is one of your first notes you bought on your own. You’re talking to the borrowers. Can you give people some confidence and share your experience? It’s people talking. I’m curious if you could give an opinion?

Were you nervous about calling the borrower the first time? 

Absolutely. I was nervous. There was a podcast. I was reading about how to talk to borrowers and I talked to you Chris, things to say and I knew to do the Miranda. I was more nervous in the military. I was an interrogator. That’s a different thing. I was still pretty nervous. I’m talking to somebody that maybe is going through a hard time. The thing that I did, and even though I was nervous, I can tell she’s nervous too. I diverse-off voice and asking, “What’s going on and what are your plans? Here’s the situation. What would you like? What are your goals? What do you foresee?” She kept foreseeing herself as being in that house and she was trying to figure out ways to afford it.

GDNI 82 | Forced-Placed Insurance Letters
Forced-Placed Insurance Letters: It does not matter how much people have if they can’t make you a priority.

 

We started talking about her job some of the expenses that she has. She has two daughters. One of them had some health issues. I didn’t know much more than that, but some health issues. It was sad. I was more of a sympathetic voice. I didn’t tell them I was the one making the decisions. I said, “We’re a small company. We don’t like to ruin somebody’s day and we like to work something out. You’re going to have to decide how. Here are your options. If there’s anything that we can discuss, let me know.” I told her, “Here’s my phone number. I’m always available by phone.” I’m easy to talk to. Unfortunately, that was the last time I was able to talk to her.

I try and humanize the conversation. Ask people, how’s their day going? One of the things I typically will ask them is, “We’re trying to work with you. How can we help you?” When you ask somebody and when you say, “How can we help you?” It’s almost like an ice breaker in that sense as well. I don’t know. I don’t have any too much experience. 

That’s a good point, too. When people say they can’t afford it, and then we send them the financial package where they give us all their financial information. It always felt a little weird to me that we would look at a financial package and decide what they can afford. You need to ask somebody what they’re prepared to pay because it doesn’t matter what they can afford. If you’re not a priority with them and we can’t make ourselves a priority somehow, it doesn’t matter how much they have.

When people come to me and say, “How much do I need them to pay on a monthly basis?” I go back to them and say, “We need to see how much you’re going to afford?” I can throw a number out there, but if the number doesn’t fit your budget and you can’t afford it, it doesn’t matter what that number is. If I say $1,000 and most can afford a $600, I’m not getting the $1,000. Once we work to a common goal to try and get to a point that if the person’s making $100,000 a year. It’s not going to be a $300 a month payment. That’s where sometimes it’s good that I never make a decision right then on the phone. We’ve talked in past episodes say, “I got to bring it back and talk to the investors and partners on any deal.” That’s one thing too, as a component is trying to work to that numbers and understanding. I can throw any number out there, but if people can’t afford it doesn’t make any sense.

You handled it very well, Dave. This is not a harrowing story. It’s very unfortunate that it’s going the way it is and they end up with a house. The house hopefully will be in decent condition.

One thing I noticed is that she waited until the demand letter was about to expire. You have 30 days. She called me that day had expired and say, “What can we do?” What are your experiences guys? Did the borrowers always wait until that last second and follow through ever or generally the ones that follow through the ones that call you immediately? 

My borrowers have called me immediately. They get very spooked. If they’re serious about keeping the house and they think they can, they call you right away. You have nailed it, and I hit the nail on the head with her. She is trying to buy herself some time either because she’s trying to figure out how to get it together or she doesn’t have any options and she doesn’t want to deal with whatever’s next.

We send the demand letter, the demand letter expires, and we file the complaint. It’s a CFD. A complaint is a lawsuit, which gives them another 30 days to answer. They need to pay $3,500 to reinstate. This is in Michigan or Indiana. It’s $1,100 to file a complaint. They send in a check for $1,500. If you accept the $1,500 you have to drop the complaint or you send the $1,500 back to them and continue with the complaint. It’s like you’re almost damned if you do and damned if you don’t because you don’t want to foreclose on this person. This is the third time that you’ve had to send the demand letter that they’ve continued to reinstate with the same instance. These are the situations you run in all the time as you start to grow. These are the great areas where you don’t know what the right or wrong answer is. It’s like, “You owe me $3,500, and they cut you a check for $1,500.” It’s going to cover your legal bills. Do you take the money and work with them and start the process over again or what do you do? 

You have to refile because that’s the last time they give you money. It’s like liar’s poker. Who is psyching each other out? When people have legitimate problems and they legitimately want to work it out, they call you or they certainly answer when you call them. If people are hard to reach, they’re not getting back, they’re waiting the last second, that’s a desperate person who doesn’t have their next move figured out. They’re not coming back to you unless they win the lottery.

Eric Smith mentioned if you get the house back, he lives in Omaha so he could go by for you.

Where in Nebraska is it, David?

It’s in Cozad. It’s not out in the boonies. It’s in a town and it’s only a couple blocks away from the hospital.

What would you do with it if you get it back? I assume you are getting it back.

I’m going to get it back and I was very inspired by your show with Bill Greismer. I’m not going to rehab it. How he owner-financed it, I will probably do something like that. Put it for sale and owner finance it if I have to and take cash if I can. I’m not wanting to do anything in Nebraska. Sometimes good opportunities present itself. Don’t always stick in a couple of states. I have a good opportunity exist over here. Why not? Don’t be afraid of it.

I’m encouraged about Nebraska from what you’ve said. It doesn’t sound too expensive or too difficult to do something legal there.

Remember you have to go to the FCI servicing. They’ve been pretty decent with me. 

Finding success in note investing is all about continued education and networking with good people. Click To Tweet

It’s helpful. They’ve gotten in my way when I’ve had an attorney that I wanted to use and she wasn’t on their list. I’ve also had them approve someone. You can ask them to vet someone if you have a great attorney recommended by other people. In some cases, they save you from using that attorney. I wish they’d been there when I chose my attorney for my Pennsylvania foreclosure.

Dave, before we head on to a few other questions, do you have any pearls of wisdom for the people out there who are in similar positions you’re in?

Just keep networking and educating yourself. You guys are not marketing. You’re telling it like it is the good, the bad, and the ugly. I love it. I still consider myself a newbie even though I’ve had several. I got into notes because I created a note in the beginning and then I had to learn about it, and I was like, “People do this for a living. This is cool.” My first note why I created a note for somebody to help them out. The pearls of wisdom is continued education and networking with good people.

Why don’t you tell us about creating that note? That’s not a typical first entry point into a note investing career. Were you in real estate before that? What were you doing? 

It’s a very long story. I had a friend of mine and he had left me not to me personally a couple of million bucks for me and this other guy to do a Christian charity. He had several properties. He was a hoarder. Properties were filled to the max with stuff. We were selling off properties. We were doing all these things, at the same time to do this charity. It’s one of those 503(c)s you have to turn on an income. We started funding flippers as part of money lenders. A friend of a friend, there was this guy living in a trailer house and he rented this trailer house for years from this old lady who had this farm. There was a couple of acres set aside. This guy was slow mentally. He wasn’t able to pick up and move. He ran a business out of it doing wood chopping and cutting down trees. The lady that owned the land and the property died, the son comes in and wants to kick him off. It was cruel to make a move at this point. What we did as a charity was we bought the property and rented it so that nobody could kick him off.

We didn’t want to hang onto the property, especially because he started finding down things. We’re doing things on there that I don’t want the county to go over there and look and then come after us. He was coming out there were bulldozers and doing all this landscaping and stuff. I was like, “We don’t want to hang on to this where we get in trouble.” We ended up turning it into a note to sell it to him. Even though he’s slow mentally, he’s the type of guy that he saves his money and puts it in beer cans in the yard buried up. We ended up selling two acres and a trailer house back to him for $120,000. He puts $20,000 down and he’s paying every month double payments and $30,000 at a time. He’s paying it off and this is a trailer in the middle of nowhere, two acres. That’s how I got into notes. We did this for him and I had to learn how to do it because it’s a Dodd-Frank. I’d never heard this stuff before. I had to learn how to do it. That’s how I got to Scott Carson’s podcast.

When you have such a fantastic first experience, it can be a good thing or dangerous, “This guy is paying us all his money. He leaves us a whole bunch of money and put $20,000 down.”

We set up the loan with Madison to do it right. I looked at one day and he paid $30,000 twice. He’s paying it off. This was one of those situations where it’s a good deed. We kept this guy from getting kicked off the land from the son who wanted to take over and now he owns it. We hold the note. This is a note of contract with deed.

You gave him a path to be an owner. In the spirit of what the guy who left you the money had in mind. It would be a good thing you would do. It’s hard because you’ve got triple right out of the gate. In my career, I’ve had probably three times when I got an amazing result. There’s an awful lot of plodding along in between the exciting things that happened. David, thank you for sharing that with us.

David, thank you.

Thank you for having me on.

Gail, why don’t we move on to Eric’s question about the BPO. Eric who came up and mentioned that he had a BPO for NPN in Alabama and he’s trying to purchase it for $10,000. It’s a second note and it looked good. The comps he was running were in the mid-30s and all of a sudden, he gets a BPO back and it’s a quick sale, ten to 30-day sale at $15,000. How would you approach the seller with that information?

I would share that BPO with the seller. Seller supplied BPOs, I don’t know if the seller did supply one. They’re often ridiculous. Chris loves DataTree. I would love it if houses were worth what they say they are.

I use it in the sense of I’ll look to pull comps for stuff that’s sold nearby, but I still put eyes on the property to see what condition it is compared to some of the comps. It’s how I use it. I don’t go off of their value. I go off of the properties that sold nearby.

It would be crazy to spend $10,500 for a non-performing note on a house that’s worth $10,000 to $15,000. 

The other thing with Alabama, you have to remember there is a twelve-month redemption period after foreclosure. The foreclosures is not that cheap in Alabama. After you foreclose, you have to wait another year. Alabama can be tough for notes.

GDNI 82 | Forced-Placed Insurance Letters
Forced-Placed Insurance Letters: If you’re dealing with a fund or a legitimate broker, they know the issues that happen. The joker brokers are typically the ones who get upset.

 

Eric, where in Alabama is that? Is that Birmingham or some rural area?

It’s in Birmingham.

Birmingham’s famous for some inexpensive houses. I would also ask a property manager what it would rent for and see what condition it’s in. Eric’s relatively new. I like Birmingham. These experiences are an opportunity to start to get to know Birmingham a little bit. I don’t know if you’re interested in owning rentals, Eric. They have pretty decent rents relative to the value of the houses.

He likes rentals, but $10,000 to $15,000, if it’s a $20,000 to $30,000 house in Birmingham, maybe. First off is the seller, if I was going to buy that from the seller, I’d probably offer him $2,000 to $3,000 is where I would probably come in at. If I was going to fade the bid and then at that point, if I’m going to deal for $3,000 to me that’s not a lot. Maybe you’d roll the dice on something like that. Back to your original question, I would send an email to the seller saying, “The BPO came back, here’s a copy of it. It came in at this price and this is what I’m going to do. Whether you fade your bid, whether you say I’m going to pass because I don’t buy houses under $20,000, that’s fine.”

The other problem with a $10,000 house in Birmingham is it could be a bad neighborhood. Birmingham is famous for that. I drove around Birmingham with our wholesaler for a day and a friend of mine who’s a realtor there, when he found out where we had gone, he’s like, “You must be out of your mind going in there.” Even with the windows open and the doors locked in the steaming heat of June.

Do what you want in the sense of whether you want to fade the bid or walk from it. When something like that occurs, you give the information to the seller. That’s what you can do. I went back to a seller on six assets and said, “I’m passing on these assets and here’s a reason why.” Two of them had been demolished. That’s pretty clear.

That’s easy. 

Two of them had title issues, and two other ones the report they showed said there was $210 owed in taxes where it was about $17,000 in taxes. A little bit of a difference there. When you explain it to them just say, “This wasn’t what I was expecting.”

It’s hard to be a truth-teller to a seller. They do not want to hear these things.

The ones who get more upset are the joker brokers more than anything. If you’re dealing with a fund or of a legitimate broker, they know that happens. The joker brokers are typically the ones who get upset.

They’re the guys who come to repave your driveway and they put a tar slurry on and smooth it out and then we need to be gone as quickly as possible before one steps on it and realizes, “I didn’t do anything.” They want you to take the things and they want to be gone. They’re not looking to build long-term relationships based on real value, unfortunately. 

Gail, anything else you would like to add based on any of the topics we covered?

Eric is into rentals. We should talk about the relationship between lip notes and rentals sometimes.

I’d like to bring on my partner in crime in North Carolina who I’ve taken a bunch of properties back and owner financing to her where she turns them into rentals. She’s an agent property manager everything in the area and she handles them. It’s a win-win because I’ve got somebody who’s got 800 credit and getting financed these deals and she’s happy because she’s cashflowing on them. When people look for seller financing it’s interesting because most people you think when you’re seller financing, it’s either like a fix and flipper or somebody who’s got a 40 or 50 credit score. There’s a lot of people you can work with who are out there. They may not be able to go to the banks and get the loans or they don’t want to have to deal with the banks.

Where they’re contractors and they’ve got too many properties. Those are our favorites, contractors who want to buy your houses.

The big thing is finding somebody who isn’t trying to low ball you on the price every time. It’s getting to a number where it’s comfortable for you, but it also works for them. It’s win-win for both sides. Gail, I think we’ve answered most of the questions for everyone. Any last second thoughts?

No, I have to call someone. I have a closing on my terrible property in Pennsylvania. The buyer is texting me. This better not be bad news. 

Thank you all for joining us on this episode of Open Mic Night. One little tidbit I’ll leave is for people who do renovations. I did upload in our Notes and Bolts, Facebook group some sample contracts and sculptural works for people, as well as if you’d leave us a review on iTunes, Stitcher, Google Play or anything else, we’ll send you that bank data tape. If there’s anything else we’ve talked about, send us an email and we’ll figure out a way to send it to you. We would appreciate it if you could leave us a review on one of those stations if you do appreciate the show. As always, go out and do some good deeds.

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