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Hi! It’s Lou Brown. With another my 101 ways for real estate investors like you to win, close more deals, and accelerate your cash flows. Today is tip number 10. “Always have the right contract with language to protect you and yield all the possible profits available”. Well over the years, of course, I’ve been in this business now for over 40 years. And I’ve learned a lot of things about what to do and what not to do. And I can tell you that one of the most powerful things I ever learned way back, in the beginning, was to have the right paperwork. And I’m not talking about a Standard Realtors Agreement. Because the Realtors Agreement, first, is designed to protect the realtor. Second, to protect the seller. And third, to protect the buyer. What I found is that I really needed two different contracts. I needed a buying contract and I needed a selling contract. And I needed one that had negotiation built into the paperwork. And I needed one that had profit centers built into the paperwork.
Hi! It’s Lou Brown. With another one of my 101 ways for real estate investors like you to win, close more deals, and accelerate your cash flow. Today’s tip is number 11. “Have the seller pay all closing costs”. Alright, so I have a contract that I’ve spent many years putting together in my career. There are 40 plus years now. I’ve been buying, selling, and holding property and I created something called the Standard Real Estate Purchase and Sale Agreement. Now I’ll just take this one clause and focus on it because I talked about the agreement in tip number 10 so let me tell you about this particular clause. Now, this is our Standard Real Estate Purchase and Sale Agreement. It is loaded with profit centers, protection, and negotiation for you. And this particular one says.
Hi! It’s Lou Brown. With another of my 101 ways for real estate investors like you to win, close more deals, and accelerate your cash flows. Today’s tip is number 12. “Always file a notice of purchase and sale agreement to protect your deal from being taken”. Let me speak about that. It’s amazing.
Hi! It’s Lou Brown. With another of my 101 ways for real estate investors like you to close more deals, accelerate your cash flows, and make more money. Yeah Baby! Alright! So, today’s tip is number 13. “Have a contract that states disputes should be settled with mediation, then binding arbitration”. Alright. So over the years, I’ve developed an amazing agreement and it’s what we call our Standard Purchase and Sale Agreement. Now this standard purchase and sale agreement is amazing because it takes care of profits. So it’s got profit centers in there. It negotiates a lot of your transactions for you without each point having to be negotiated by you. And it’s also got a lot of protection in there too. So the purchase and sale agreement, it’s three pages long. And it actually goes through, one of the things it does is collect up all the money together on one page so you don’t have to hunt through the document to actually find out what the money looks like.
Hi! It’s Lou Brown. With another of my amazing 101 ways for real estate investors like you to win, close more deals, and accelerate your cash flow. Today’s tip is number 14. “To assure your contract is binding, always give consideration”. Now let me explain what that means. Contracts in order to be valid must have certain things in there. And of course, you’ve got to have the parties in there. You’ve got to have the subject matter. And you’ve got to have some kind of consideration between the two parties that binds the contract. So here’s what I recommend and it’s something that I’ve been teaching my clients to do for many, many years. And simply it’s when your seller goes ahead and signs the purchase and sale agreement. Then you go ahead and bind that by bringing a check with you. You make the check payable to the seller. Whoever’s signing that contract or sellers, if there’s two of them or more. Make the check payable to all of them. Have them sign it on the back.
Hi! It’s Lou Brown. With another of my 101 ways for real estate investors like you to win, close more deals, and accelerate your cash flow. Today’s tip is number 15. “When there is equity, always ask for owner financing”. Now of course this is when you’re buying a property, go through your, what we call the cost to sell worksheet. I’ll be explaining this in another video and what we do is actually sit down with a seller. We make a presentation to them and we end it with something called the cost to sell worksheet. We get down to a final number and at that final number when we’re actually making an offer to the seller, simply say that when you get to that final number, you’ve already taken to account if there is any existing financing on the property, so that final number is their equity in the property. Now at that point in time, you want to ask the seller, how would it work for you? Or excuse me, would it work for you if you were to receive this in the form of dependable monthly payments?
Hi! It’s Lou Brown. With another one of my 101 ways for real estate investors like you to win, close more deals, and accelerate your cash flow. Today’s tip is number 16. Now, these are all buying tips that I’ve been given through this series. And this one is, “When getting owner financing, ask for first right of refusal if the mortgage is sold”. So one of my favorite ways to buy property is to have the seller by the bank. Write that down. The seller is the bank. Now when the seller is at the bank, it’s a really cool thing because of course, you didn’t have to go to the bank. You didn’t have to qualify for a loan. You save all the points. You save the closing costs. You save all of the pain and suffering of qualifying for that loan in the first place. A very, very powerful thing to master.
Hi! It’s Lou Brown. With another one of my 101 ways for real estate investors like you to win, close more deals, and accelerate your cash flow. Today’s tip is number 17. I’m going through some of the contracts closes in our amazing standard purchase and sale agreement on the buying side. Now I’ve got one for buying and I’ve got one for selling. So I’m focusing on the buying side here in this tip. “When getting owner financing, ask for substitution of collateral”. Now that’s a powerful one. So I’m going to teach you how to master the process of getting sellers to carry back financing. I love the idea of the seller being the bank. Now when they carry back that loan, there’s a mortgage. And in that mortgage, you have some stipulations in there, some clauses. And one of the clauses I recommend that you have in there, and it’s included in my purchase and sale agreement, is that the seller agrees to something called substitution of collateral.
Hi! It’s Lou Brown. With another one of my 101 ways for real estate investors like you to win, close more deals, accelerate your cash flow. Today’s tip is number 18. And it is, Offer to buy the property subject to the existing financing. Oh my goodness! Changed my life. The first property I ever bought was when I was 18 years old. I was able to do that by taking over the payments, taking over the existing financing on the property. How powerful that was? Back in the day, they had a thing called NENQ Loans, Non-Escalating, Non-Qualifying loans. But Congress, in its infinite bought wisdom. Of course the banks, we all know the influence the politicians by a thing called contributions to their campaigns. Right? And so one of the things they created in 1982 was a law called the “Garn-Saint Germain Federal Depository Institutions Act” which allowed the banks to put a clause in their mortgages called the Due Upon Sale clause.
Hi! It’s Lou Brown. With another one of my powerful 101 ways for real estate investors like you to win, close more deals, and accelerate your cash flows. Today’s tip is number 19. Build an extension into your contract. Now, build an extension into your contract. What does that mean? So I’ve been talking in this series a bit about a thing called a standard real estate purchase and sale agreement. And I’ve seen what sellers do and I’ve seen when they don’t do what they’re supposed to do. And I’ve seen that they can pull back on you and cause you a lot of expense and a lot of loss of money because you could have gotten a title search, you could have spent money getting a survey. Maybe you had the home inspected, it’s a lot, it’s a lot. You could have invested by the time you get to the closing.
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