Real Estate Investing Tips | Title Insurance Tips | Investing In Real Estate

Real Estate Investing Tips | Title Insurance Tips | Investing In Real Estate

– Welcome, welcome back folks. This is Liz Soria, your host at the Tax Advisor and Biz Coach Success podcast. And today, as always, I
have another amazing guest joining me, and our
topic is gonna be about real estate insurance title tips. And I have Kevin Tacher,
and he is with the Independence Title
Company, or as he’s known, the king of the title of South Florida. Kevin, welcome to our show, it’s such a pleasure to have you here, how are ya? – I’m doing fantastic. Thanks for having me, I appreciate it. – It’s really my pleasure. It’s always an honor
actually to have experts like yourself join my, you know, my show. So tell me a little bit about your company and the service that you provide. That way the audience, my audience, understands a little
bit more your expertise. – Absolutely, so the company
name is Independence Title, we’re located right over here
in Central Fort Lauderdale. And one of the things I
like to always start off and tell people that they
don’t realize is we offer a product that is different than
any other type of insurance. Most insurances are
purchased for future risk. So if you think about,
let’s say, car insurance. You think about, will
I get into an accident. Health insurance, will I be sick. We offer a unique type of
insurance when buying real estate, which is called title insurance. Title insurance is going
to check the opposite, so it checks in reverse. So we go back up to about
30 years checking for the root in title, which
will basically tell clients that are buying, prospective
buyers in the state of Florida, whether they own free and
clear title to their property. And then we’re gonna
issue a insurance policy, like any other insurance, that is going to insure that coverage for the buyer that is purchasing that piece of property. – Very interesting, that
is very interesting. And that is not a common service that has been offered by
other title insurance? – Yeah, I mean everyone offers it. I usually like to connect the dots between the different types of insurance
because a lot of people feel that, you know, do I really need it? And then I always tell people, would you drive your
car without insurance? And with title insurance,
another unique point is that it’s only purchased one time, when
you purchase the property. So it’s not like there’s
a ongoing premium. So there’s a very low cost
to buy into that policy to protect these buyers for the life that they own the property. – Wow, that is excellent. Okay so it’s a one time fee, and so it’s a well worth investment then. But you can only purchase it on the time that you’re closing on the property? Is that right, Kevin, or
how is that done, please? – Yeah so it’s usually
done through the purchase. So we serve two roles in the industry. One is a title insurance company to issue the actual insurance policy, and then the flip side
is the escrow agent. So we’re the ones that
are holding the money. So the buyer puts up a
deposit, they get a loan, we take all the money in, and
then we pay all the money out to the seller, the real estate agents, and any other vendors that get paid. So we serve two roles, usually
one is tied to the other. So we usually do not handle
one versus the other. So if someone said, I just wanna buy insurance, we don’t offer that. And if someone said, well,
I just want you to handle the flow of money, and
I don’t want insurance, we wouldn’t handle that either. That’s usually done by
real estate attorneys. – Gotcha, and I think
it’s a very good point. If you don’t mind on
kinda digging into that, because I know there’s a
difference and I do recall. And by the way, for the
audience, you know, Kevin and I, we met quite a few years
ago, and it was in another, a wholesale real estate
group here in South Florida. And I’d say again, I’m really
happy to have him in the show because I know he’s
gonna bring great content and value to everyone out there. Especially because one of my
niches is really real estate. And a lot of people getting
started, or others do have experience, but not aware
of the different initial, you know, what’s in title insurance versus to even a lien search. Which is something I
wanted to discuss with you because you’re an expert in that. And I think from my own
experience, I had a bad experience when I purchased one of my
properties because the title company decided not to do a lien search. Do you wanna get into that a little bit and offer some kind of tips on that? – Yeah, absolutely. So one of the things
I like to tell people, I was gonna actually, it’s
funny, I was gonna change the way the world sees these types of
searches because it’s unique. And a lot of the buyers
and real estate agents and investors, they don’t
understand that a lien search doesn’t actually check for
liens, believe it or not. That’s a title search. So we do two types of searches,
one is a title search, which is going to check everything
that is a public record. So everything that’s recorded
in the public record, typically tied to a name
or legal description of a property, that’s one type of search. And then the second type
of search is a lien search that a lot of title companies do not order because the contract doesn’t require it. And that type of search is going to check for code enforcement violations. It’s going to check for permitting, open, closed, and expired permits. And the one I like to
tell people which they always find amusing is that
the last part is they check for utilities, which is a water bill. And a lot of people do not
realize, we’ve had closings with bills in the thousands,
tens of thousands of dollars for years worth of water
that somebody didn’t pay on. – Wow, you hit it right on the
spot, and I’ll tell you why. Because that’s exactly what happened to me at one of the properties that I purchased. And then when I went back to
the title company and said, well what’s going on? I said, I thought that
you had a clear title and everything was
settled before my closing. And they said, oh no, that’s
a lien search, we didn’t look into whether there was
any open utility bills. Anyhow, I ended up having
to pay out of my pocket because apparently it just
attached to the property, so whoever buys it now
is responsible for that. – Absolutely, yeah, and
then sometimes there’s some different cities that,
if it’s tenant utilities versus owner utilities,
it could be different. Some places are able
to go after the owners for the tenants, and some are not. But definitely it’s an important search, it’s one of the bigger searches that we do in order to make sure that
our buyers are protected. – So what really sets you
apart is that, like you said, you have, you know, an
additional service, which is, like you said, it’s not only
as someone can come and say, okay I want you to hold
my funds in escrow, but I can add this insurance
to protect your assets, which is, you know, very
beneficial for anyone who really is, you know,
wanna have that kind of peace of mind before
they purchase a property. – Absolutely, it’s important,
it’s important and, you know the challenge
is that even if you order a lien search and utility
bills come up and it’s missed, one thing that sets us
apart from some of the other companies is they don’t
own it then, they will turn the buyer away and tell them,
file a claim and go get it paid somewhere else, where
we just cut the check. And there have been times, you know, it’s a risk-based business. There are times where our searches have missed something, and we’ve owned it. We own it, we pay the claim,
and if we have to submit it to our insurance to pay because
it’s a little bit larger, we would be more than happy to do so to make sure that that buyer is protected. We never want a client leaving
feeling as if we didn’t have their back and we
weren’t protecting them. Because when that problem
arises is when they’re gonna come back to us, not at the closing table. At the closing table, we’re typically there saying everything is great. It’s going to be one,
two, three, 10 years later that these buyers are going
to feel the issues coming up and they need to make sure
that there is a stable company behind them that’s going to own it and take care of that
problem as quick as possible. – And a point I’d like to
bring up, and if you don’t mind kinda going more in-depth
with that, Kevin, since you’re an expert in this. Again, when it has to do with
permits and things like that, I’m sure from your
experience you have seen, especially we call it
a newbies where they’re coming into rehab, you
know, doing these major renovations to these properties. Where they have probably done
some work in the property, and they have a permit
that was not taken out, and now they have fines
and things like that. So what would you recommend
someone who’s getting into the real estate, actually as
an investor, and watching out and being careful about this
because with these kinda permits, that could be a major issue now. Isn’t that correct? – Yeah, absolutely.
It comes down to research. Understanding that the
title company is only as good as the data that we can see. So we only insure the
land, we insure the right for that buyer to own free and clear land. We don’t care about the house when it comes to title insurance. So we don’t care about how
many bedrooms and bathrooms, if the pool was done with permits. That’s not something that
is related to our business, we care about the right to
use the land, the boundary. If you took like a
diagram and you drew a box around the property, that’s
what we’re concerned about. That that land, which is
called the legal description, is given to that buyer free
and clear of any liens. But one of the tips I’d like to tell the investors is you’re
absolutely correct. Back in the old days, people would do a lot of work without pulling permits. They would close in carports
and make them third bedrooms. They would close in patios and make them closed-in family rooms
because they wanted to add to the square footage of the property. – Right – And understanding that,
as a buyer, if you’re buying a property, you have
your inspection period, which is usually 15 days, to
uncover all of these items. The title company is not going to uncover these items for you. You either need to hire a
home inspector or a general contractor, or you need
to do the work yourself. So what I tell some investors
is, the first step is to look at the property appraiser,
and the property appraiser is going to tell you how many
bedrooms, how many bathrooms, and how much square footage is the house. And if you see on the property
appraiser that it says there’s a carport, and then
when you go to the house, you realize you step down into a bedroom, there’s probably a problem. It wasn’t done to code ’cause
they would have had to raise the foundation to match
the rest of the house to be part of this square footage. And the same thing if you
go into a patio or a garage, and you see that the garage,
you know the front five feet of the garage is the actual
garage, but when you go behind that, there’s no room for a car because it was turned into a TV room. And those are the things you
need to be careful of, and to do your research to make sure
you don’t get stuck with that. Because if you’re an investor that’s gonna buy and sell, you could have a problem. – And you know, and this is
the reason why I brought this up, because unfortunately a
lot of people don’t realize. And again, especially, you
know, newbies who are coming into the market, as you
know, the market’s high, it’s good for the sellers
right now versus to what happened a couple years
ago, which we went through that big bubble in real estate right? I can feel that we’re
going through that again, but the inventory is low,
which makes a big difference to what happened a couple years ago. – Yeah, absolutely, and the
prices aren’t inflated as much, and lenders were being a
little bit more conservative. But I tell people, I was here in the good, I was here in the bad. I went from doing, you know,
20 or 30 closings a month when I first got into the business, down to two or three in a given month. I’ll never forget, years ago
I used to pay my assistant on my credit card ’cause we didn’t do enough closings to meet payroll. And now you turn around and fast-forward as the market grows. You know, we’re doing right now on average 90 to 100 closings a month. So I was here with the good,
then I was here through the bad, and now we’re back
here through the good again. And we do see a slight turn. I did predict about five
years ago when I knew we were coming up with
the presidential election. I did predict that this
election we were going to be solid for the first year, and
then starting the second year we were going to see a slight decline. And now I think we’re gonna see it even more coming into 2019. And we’re prepared for it, we’re prepared to market to different types of clients. That’s one of the unique
things that we do differently, is we market to every clientele. So we have real estate agents,
we have lenders, private lenders, regular lenders,
we have investors that buy. So if one is slow this
month, the other side is typically busy, so when we
get into a declining market, we’re now gonna be able to
focus back on the investors that are hopefully going to buy
and rent to these homeowners that are facing foreclosure, short sale and having to move out of their house. – That’s excellent, so
from your expertise as a title insurance pro, you
also can help buyers come out and assist them with
actually borrowing money from lenders and things like that. That’s wonderful to know that, absolutely. Because I think one of the
things that, when we invest our money, especially something
that we want long term, is we wanna be able to have a backup of a company who has expertise in it. And that’s wonderful that
you really are able to have that additional service
besides what you do. Right now, how do you see,
you said that by next year your prediction is that
it’s gonna be declining. How can you tell the
red flags or the signs based on the market, how it is right now? – Well I think, like any
business, you’re able to track. You know, you said we met at
a real estate investment club many years ago, and that same investor is a very good friend of mine. And he was probably one
of my first clients, and I’ve been doing this
15 years this past July. So, you know, we can look at– – Congratulations – Thank you, we can look
at the signs of the market and I can see the investors that are busy have lighter inventory now. The ones that were buy, fix,
and selling two to three deals a month are now doing
one to two deals a month. The lenders that were lending
five to 10 loans a month are now doing three to five loans a month. So, you know, we’re able to tell that. We know that, ’cause we
value our relationships, which is the most important
part in our business, is it’s all about the relationship. So I have open conversations
with these investors and say, hey investor, what’s going on? Hey realtor, what’s
going on in your market? Tell me, what can I do to help you? And they say, well inventory is light, or I’m having a hard time
getting this house sold, it’s been sitting on
the market for so long. So I think we’re seeing that there are more challenges in the market. And we can also tell by our
numbers, if we’re statistically growing X percent every year,
year over year we can look at the market factors to
say, what’s inventory, how many homes are listed,
how many homes are closing. And then we can tell, I mean,
we’re one of the top five title companies in
Broward County for sure. I’m not 100% sure statewide,
but definitely here in Broward County, we were ranked in
2017 as one of the top five. So, you know, we have our
pulse on the market to know who’s doing deals and
how the market’s going. And I can reach out to real
estate brokers and say, are your brokers doing business? If you have one of the larger
firms that we represent, Charles Rutenburg Realty,
they have over 800 agents and I can look at them and
say what is your agent count? Are your agents growing? Are you growing at the same
pace you were growing last year? Is it down? So we’re able to see our pulse on not only the amount of deals, but we can see what the industry professionals are doing. The insurance, the other
insurance companies, the home inspectors, the
lenders, the general contractors. So by networking with all
these people, we have a great pulse on the market to
tell, where are we going? And the consensus across everyone, is we’re in a slight decline right now. I don’t think it’s gonna hit
rock bottom like it did– – Me neither. – But we’re definitely in a
downward market right now, which is just means it’s time to change your business in order to grow. Change your business model, focus on a different part of the business. – So it’s shrinking,
inventory is definitely shrinking at this moment, but again, like you said, I have the feeling either. I’m not into so much like
you are on a daily basis into the real estate sector. But yeah, I believe the inventory is definitely shrinking
at least here in Florida. Again, I mean it’s not gonna
be a major burst of a bubble like it was, you know,
10, 11 years ago, right, when we had so much distress here. One of the things I wanted
to bring up, and I think it’s important because I think
there’s some confusion out there. One of the things I did
learn when I was actually in the meetings with the
real estate group is, the difference between what
happens with an attorney holding your escrow versus
to a title company like you. You have certain laws and
regulations that a lot of people don’t realize that it’s
preferential to what attorney can hold their moneys in escrow. Can you explain that a
little bit please Kevin? – Yeah, absolutely. I mean we’re pretty similar,
there are three different, let’s call them categories
of holding escrow. One is a real estate broker. A real estate brokerage
is able to hold escrow for their agents’ deals,
and if there is a dispute, they have a resource to submit that to what’s called an escrow
disbursement dispute. And it will go to the state
of Florida that governs real estate agents, and they
will set up a type of mediation and get involved to help mitigate that. So I always tell people it’s best to put it with a real estate brokerage. But the flip side are
the real estate brokers don’t wanna hold it ’cause
they don’t want the liability, they don’t make money on holding escrow, so they don’t want to. So now they turn to a title company or a real estate attorney, which
are the two other pillars. So pillar one are the real estate agents, pillar two are the attorneys. And the difference with the
attorneys is legal advice and fighting legal
claims cost them nothing. So if a real estate attorney
is holding the escrow and there’s a dispute, sometimes
the attorney will just make the determination to give it
back to one party or the other, and as soon as they’re
served with a legal demand, they just respond in their daily routine. Now you go to a title
company, the title company is different because we are
an independent third-party, I like to make sure
people understand that. We are not representing the buyer, and we are not representing the seller. We are representing the transaction. So if there is a dispute,
clients come to me all the time, good clients of mine, I wanna
put a claim on the deposit, and I said, I appreciate that,
but I cannot automatically release it to you because
I have a fiduciary duty to the other side that
if they do not agree. So from a title company
perspective, you either need to agree to release it,
agree to negotiate a release, so maybe 50/50, give the seller
$1000 and get back $3000. You need to negotiate or you
have to move to small claims court and get a judge to decide
who gets that money back. – And that’s a long process
(laughs) by the way. – It’s a long process, and
we’re holding money for years for disputes that we
continue to follow up on. And for a $1000 deposit, it’s
not worth going to court over. But I am not allowed,
people have to realize, as a title company, so
don’t put the money with me. I always tell them, put it
with the real estate agent. You have a much better chance
of getting that money back in a dispute, than putting
it with a title company. Because we can try and convince
the parties to negotiate, almost like, mediate the
deal, but we have a fiduciary to both sides, where, you
know, you look at these attorney-owned title
companies, and the attorney is typically representing
one side or the other. Usually the side that’s
paying for title, and I think that’s a little bit of
a conflict of interest. They need to step out
of the attorney role, and make sure they step into
the role of managing the money and looking out for both parties. – I agree with you, absolutely. One of the things that I
just wanna clarify here, and correct me if I’m
wrong Kevin, I know that for attorneys, I believe
they don’t get audited with their escrows with
the money that’s sitting in the account, but
the title companies do. So that’s an extra layer, I find it an extra layer of security. Am I right about this or? – Yeah, I mean we go back a
long time, so you probably remembered me speaking
about that at an event, and that was many years ago
before it was, you know, if you look at the history,
in one of the books that we wrote, we went
through a lot of fraud cases. And in all the fraud cases,
it wasn’t title companies creating fraud, it was the attorneys. Because the title companies
are under much higher regulation, so those times have changed. Once the market took a
decline, the underwriters now require the attorneys that write title to submit their bank
reconciliation for audit. But one of the things to
realize, and you know, our audits are done
monthly, and they’re done on the first of every month. So my bank reconciliations,
and I’m sure you’re familiar with that ’cause, you know,
you’re in the tax side of it, is my bank reconciliations
are done the first of every month, not
the 15th, not the 30th. And we actually balance daily,
so we go through the month and we reconcile every
single day, so at the end of the month, click of a button. If our balance matches,
we know where we’re at. And one of the things I like to say is there are a lot of
even title companies, that are three months
or six months behind. ‘Cause I talk to some
of these underwriters, and to go after them is very
difficult, so it’s a catch-22. ‘Cause they want the premium,
’cause they wanna earn the income on the title insurance,
but they’re not up to par on their audit, and it’s very scary. So I always tell one of the
tips to tell people is ask your title company, how far out
are they on their audit? Are they up to date, are they monthly, are they two months behind? And find out, because if
you’re using a title company that doesn’t balance daily,
you’re in the wrong business. ‘Cause they make it so
easy now with software and companies that even do it for them, there’s never an excuse
to not balance daily. To know if money is missing,
if maybe a wire didn’t go out, if you received a credit that
maybe you didn’t know about. So it’s very important to balance daily. – That’s great. Kevin so far you have offered
so much incredible tips, and all your knowledge that you have. You said 15 years that
you’ve been doing this on a daily basis, and I
think that’s so helpful. How can the audience reach you, again, your contact information,
that way they know they can reach out to you, please? – Yeah, I always tell
people, the best thing is to just go to my website. If you go to my website,
all of our contact is there. We do a Tuesday newsletter
called title Tuesdays, it’s a video newsletter
on our youtube channel, but all of the videos and
the links are on our website. So they could subscribe
to that and go back, this week was our 101st episode. – Congratulations, I remember I made it– – 101 weeks, it’s tough. – Yes, I know it is, and
it’s kinda funny that, because I came across after
all this time, with your video. Your video really ranked high, and I just saw the 100th episode and I said, Aww congratulations Kevin that’s amazing. I think I’m, by the way
I’m not too far from you, ’bout sixty-something so I’ve been doing the YouTube channel now, oh
my god like 16 years now, but it was in the interest
really of adding more. Part of my podcast, a lot
of people that look at my YouTube channel, they
don’t realize after a while that it’s really a podcast. What happened was, you
know, it was very good that my subscribers in the
YouTube channel will get to see the interview instead of
just listen to it, right? ‘Cause it’s a different kinda
audience, so I definitely try to keep everyone as happy as possible. But Kevin, it’s been amazing, you know, conversation with you. Any other tip that you
wanna leave at the end or, I know you’re an author
too, you’re a book author. So if you wanna mention
that, where they can probably buy your book and hopefully
get more information. – Yeah, absolutely. So the website is triple w titlerate. So don’t go to independence
title because that’s a company out in Texas, it’s
titlerate, R-A-T-E, .com. And on the website I have all of my books available for download. We have title insurance tips and secrets. I have a motivational quote book. I have several books that are
on there, our YouTube channel. Our, we just launched our new
Instagram campaign which is all about educating people and
trying to reach the masses. So that’s a good way they can reach out. And then we have our
closing cost calculator, which we’re very famous
for, on that website as well that people can download
and calculate closing costs, see what they’re gonna be. So, you know, the website
is usually that central hub and then I ask people, subscribe
to YouTube or Instagram and comment, send us a direct message. I monitor it personally
myself, so I get back to each and every person and try
and just help them educate and learn a wealth of knowledge. Because for me, it’s all about education. If I can teach you something you didn’t know yesterday, I’ve accomplished my job. And one day, when it’s your
time to buy a piece of property, you’re gonna call me to facilitate it ’cause you’re gonna know
where the go to person. – And that is so true Kevin, I have to agree with you 100% on that one. And I think that a lot
of people don’t realize, and say well why we give out
this free content and so much information is because
we really wanna educate. We wanna help the people
out there, and, you know, if you can avoid making a
mistake, by all means get someone who’s gonna be an expert,
understands what they’re doing. And Kevin’s here to help
all of you, so if you are in the process of closing a property, by all means reach out to him. Like I said, I know him personally, I know he’s got a phenomenal service. He’s still around, that’s a big plus. So, Kevin, once again,
it’s been a true pleasure, and like I said, I hope we stay in touch. And definitely at least people know where to reach out to you. So thank you so much for
taking the time to be with us. – You’re very welcome. Thanks for the invite, I appreciate it. – It is, thank you and
a lot of success to you. And to everyone else,
thank you for watching, remember to like and share,
and stay connected with us. Thank you, and have an awesome time. Bye-bye, have a great day, bye.

3 thoughts on “Real Estate Investing Tips | Title Insurance Tips | Investing In Real Estate

  1. روعه

  2. Great knowledge !

  3. Congrats 13K subscribers that is awesome! Our chat in this video was amazing and I am thankful for experts like you that share so much knowledge and experience in my podcast. Hey made it top 30 itunes!! 😉

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