Jade Jean Blog

If you plan to be successful you will need a group of experts to guide you.

Attorney
Accountant
Property Management
Mentor
Realtor
Banker

The key attributes are knowledge and creativity. You are looking for creative blue-vasers, just like yourself, who will persist until they find solutions even to the most difficult problems. These are rare talents, and when you find a particularly creative expert, add his name to your growing network. The following tips will guide you in finding creative local experts to guide you.

1. Word of mouth: by far the most effective method. Ask successful local investors which experts they have found effective. One creative professional can usually recommend other experts to round out your network.

2. Attendance at creative financing seminars: Those experts who frequent seminars are usually interested in self-improvement and enhancing their creativity. Ask for their cards.

3. Who’s Who in Creative Real Estate: This publication lists those creative individuals who specialize in real estate services. $25. I highly recommend it. Call 1-805-643-2337 or write P.O. Box 23275, Ventura, CA 93002.

4. An investor/expert: Someone who not only provides client services but also invests for his own portfolio is going to be more understanding of your needs and desires. You can find such individuals at local investment club meetings. For names and addresses of the presidents of investment clubs in many major American cities call my toll-free number, 1-800-345-3648.

Taken From:The ROAD TO WEALTH

“Let’s review, then, what we’ve learned,” I continued. “We learned that a title company officer, such as Nancy, can help us walk through the myriad details that accompany the purchase and sale of a piece of real estate. I’m sure that most of these details, such as trust deed, settlement costs, and title insurance, went right over your heads. It’s all rather confusing at first. But so was baking a cake your first time or learning how to drive a car or preaching your first sermon. It always looks so much worse to the beginner. After your first property, you’ll wonder what you were so afraid of. Nancy is an expert at this. Let her be your guide. That’s what she gets paid for. Nancy becomes a vital part of your network. It is as if this were your own office and Nancy were on your staff. And you don’t have to pay her until she performs. She even tries to make it easy for you to use her.”

“Absolutely,” Nancy agreed. “We try to make it as convenient for the customer as possible. This is our main office here in Clayton; we also have a city office downtown and offices in West County, South County, North County, Charles County and Jefferson County.”

“All successful people rely on a network of experts to call on when necessary,” I said. “You have already begun to establish your own success network. You have me, you have Nancy, and you will be adding bankers, accountants, real estate people. This will become your own mastermind group. And having such a mastermind group is essential to all success. It is a wealth secret.”

Taken From:The ROAD TO WEALTH

“Now,” Nancy continued, “let’s cover two very important documents. The note and the trust deed. Here I have a standard St. Louis County note.” She held up a piece of legal-sized paper for us to see. “When filled out, it shows the amount of the loan that is being made to you, the interest rate, the amount of the monthly principal, interest and payments, and when the payments are due. This note in turn is secured in the state of Missouri by a deed of trust. A deed of trust actually secures the amount of money that the lender’s lending you on this note with theproperty that you’re buying. In other words, if you don’t pay that note, the trustee for the bank will foreclose on the property.”

“To say it in fewer legal terms,” I added, “A note is an I.O.U.”—I promise to pay you this much” The seller says, ‘I believe you but just to be sure I want you to sign this other piece of paper called a trust deed, or mortgage” It says, ‘If you don’t keep your word, you’ll have to give the property back” There are other ramifications, but this is the general
picture. Speaking of foreclosure, there were people who this very day, about an hour ago, lost their property.”

“Yes,” Nancy said, “it happens almost every day, at noon, on the steps of the courthouse.” “Why?” Steve wondered. “They didn’t live up to their agreement with the lender,” I answered. “They didn’t make their monthly payments—due to divorce, neglect, bankruptcy, unemployment, all kinds of reasons. Dealing in foreclosures is tricky, so I’d be careful.

Taken From:The ROAD TO WEALTH

When Jim left, Frank, the $1,000-a-month brother, was called. “Frank,” said the supervisor, “I wish you’d go out to the airport and get an inventory of the cargo plan which was just brought in by Far East Importers.”

An hour later, Frank was back in the office with a list showing that the plane carried 1,000 bolts of Japanese silk, 500 transistor radios, and 1,000 hand-painted bamboo trays.

George, the $1,500-a-month brother, was given identical instructions. Working hours were over and he finally returned. “The transport plane carried one thousand bolts of Japanese silk,” he began. “It was on sale at sixty dollars a bolt, so I took a two-day option on the whole lot. I have wired a designer in New York offering the silk at seventy-five dollars a bolt. I expect to have the order tomorrow. I also found five hundred transistor radios, which I sold over the telephone at a profit of $2.30 each. There are a thousand bamboo trays, but they were of poor quality, so I didn’t try to do anything with them.”

When George left the office, the employer smiles. “You probably noticed,” he said, “that Jim doesn’t do what he’s told, Frank does only what he’s told, but George does without being told. The future is full of promise for one who shows initiative.

Taken From:The ROAD TO WEALTH

Some years ago, three brothers left the farm to work in the city. They were all hired by the same company at the same pay. Three years later, Jim was being paid $500 a month, Frank was receiving $1,000, but George was now making $1,500.

Their father decided to visit the employer and find out the basis for the unequal pay. The employer listened to the confused father and said, “I will let the boys explain for themselves.”

Jim was summoned to the supervisor’s office and told, “Jim, I understand that Far East Importers has just brought in a large transport plane loaded with Japanese import goods. Will you please go over to the airport and get a cargo inventory?”

Three minutes later, Jim returned to the office. “The cargo was one thousand bolts of Japanese silk,” Jim reported. “I got the information over the telephone from a member of the crew.”

Taken From:The ROAD TO WEALTH

“The seller pays it.” “Good. Now, there are other miscellaneous closing costs associated with buying property. This might include fees paid to banks to make loans, appraisal fees, insurance and tax impounds, miscellaneous transfer costs.”

“Correct,” Nancy said. “You’ll find that the largest costs in any real estate purchase are generally the loan closing costs on new financing— points and lender’s fees.”

“To clarify,” I said. “A ‘point’ is an up- front fee charged by the bank for the privilege of borrowing their money. One point equals one percent of the face amount of the loan. There are usually one four points involved with any new long-term loan. So on a fifty thousand-dollar loan one point would be one percent of fifty thousand, or five hundred dollars; two points would be a thousand dollars; three points, fifteen hundred dollars, and so on. Most of the time the buyer pays these points—except on some government backed loans. But remember, everything is negotiable. There are always creative ways to come up with closing costs without having to pay them out of your own pocket.”

Taken From:The ROAD TO WEALTH

“I’ll help you avoid that mistake in the future,” Nancy said. “What kind of costs might be expected at a closing?” I asked.

“To handle the paperwork, the closing costs run anywhere between thirty-five and one hundred dollars. The next cost would be for the title insurance. The premium for title insurance is based on the selling price of the property. It’s not like car insurance, where you have annual premiums. For instance, on a hundred-thousand-dollar house, the approximate premium would be a one-time six hundred dollar charge. Even after you sell the property, you are still insured for the period of time that you owned the property.”

“In some states, the buyer pays for the title insurance,” I said. “In other states, it is customary for the seller to pay this. In still other states, only attorneys are allowed to handle closings and check title. Nancy, how is this handled in Missouri?”

Taken From:The ROAD TO WEALTH

“Correct,” Nancy said. “Now, let me tell you about title insurance. Ticor is in the insurance business. We insure titles. The policy that we issue guarantees that there aren’t any defects in the title to the property you are buying. For instance, suppose an heir, who was thought to be dead, turns up ten years later claiming an interest in the property that you now own. Since we insured your title, it’s our problem to work things out with the heir. Or suppose Mary and John Doe own a piece of property as husband and wife. If John deeded his interest to another party without Mary’s consent, this would become a cloud on the title of the property. And you wouldn’t want to buy that property until that situation had been resolved. So we search the entire chain of deed. We report any clouds, liens or judgments against the property on what we call a title commitment. And if there’s anything on the title commitment report that you or the lenders don’t like, we work toward solving these things before closing.”

“Just as everyone needs life and health insurance,” I added, “every buyer needs property insurance. Nancy guarantees us that the property we are buying actually belongs to the seller.”

Nora joined in. “That reminds me. Someone once sold me some property he didn’t own. When I went to the title company to search the title, I learned that of the ten lots he was selling, he didn’t actually own them all. He’s still got $295 of my money.”

Taken From:The ROAD TO WEALTH

In the center of downtown Clayton, on a corner across from the park where we had jogged that morning, is a brown, two-story brick building with white trim. Emblazoned on the front in big black letters are the words “Ticor Title Company.” The Challenge team arrived just after lunch and was greeted by Nancy, a senior closing officer for the firm. She ushered us into a quiet conference room in the back on the main floor. We sat around the conference table.

“Nancy,” I explained, “is an expert in closing property. She makessure all of the details come together smoothly.”

She took my cue. “This is a closing room,” she began. “As soon as you have a signed contract between you and a seller, you bring it, and any other pertinent information, to me. We’ll sit down here and create an escrow account for this transaction. We call this `opening escrow” That’s just a fancy term for starting a file of all of the necessary documents to close the transaction—the sales contract, the, earnest money and your loan commitment letter if a new loan is required.”

“Nancy, if I could interrupt for a second,” I said, “We haven’t yet discussed the details of an earnest-money agreement. Earnest money is your deposit to hold the property. If we back out, the seller keeps our money, in some cases, as damages. Nancy will hold this deposit until the closing. If there is any dispute between you and the seller about the earnest money, she’ll keep it until things are resolved.”

Taken From:The ROAD TO WEALTH

“What do you think?” “Well,” Philip observed, “he was selling below the appraised value. Couldn’t we have profited from it?”

“Not unless we could buy it at least twenty percent below market. The seller claims it’s worth $44,000, but what if it’s only worth $42,000? Then it’s only ten percent below market. We need to get the price to $35,000 or lower—twenty percent to thirty percent off.”

“I’m still not sure of what to ask,” said Mary. “Just remember the five questions of value—flexibility, location, financing, price and condition. With practice, you’ll become as confident as you were yesterday morning picking a diamond out of fifty pieces of glass.”

The next experience I had designed for them was to take them to a title company and walk them through a simulated closing on a house. Within a matter of weeks each of them would be required to sit at a closing table, white-knuckled and nervous. It was time for a dry run.

Taken From:The ROAD TO WEALTH