Luck is we're hard work meets opportunity.
Speaker 2:This series has everything to do with sales, marketing, real estate, digital media, specializing in the real estate space, joys to hear from some of the top leaders in the industry and what makes them successful in the title space. There is only one choice. Dean, title Guy Dot Com.
Speaker 3:That's better. That's better. Alright, so now I say, I want to say thank you so much and welcome to Red Hill Country Club. Um, if you've never been here, it's kind of a hidden gem in my opinion. If you haven't had a chance to before you leave, make sure you step on the patio, check out the view because it's pretty priceless. We should also be able to send out an email. So please know that the content will be available after today's class or a couple of other items are. Most requested tools are quick links on this website. I'm one of them. Which by raise of hands, how many people here have used ticor agent in the past by raise of hands if you haven't used hyper agent board, one of our sister brands. Um, please know that there was a huge honor updates that happened about a week and a half or two weeks ago. Um, so I have not logged into it in a while. You might want to log into it, check it out. Things are laid out just a little bit different, but very nice, very conversational and incredible tool to have in your tool belt when people ask you questions. We're always available to train and teach and educate, so please let us know, but we can book that time with you individually. Also. Um, in that regard, there was a button here on our website. It says book appointment on the book appointment. It gives you the opportunity to check your calendar against our calendar and then put it on both of our calendars so you can always look at appointment this way as well as call, text or email next. Mexico. Does anybody feel maybe like a little bit of a shift in the market and the last several weeks or maybe months or so? So things are definitely happening and I do believe that market data and content is absolutely imperative to success for us in the future, especially when we're speaking with our clients on our website. There is this tool, it's the market of the tool and yes it does say protected. There is a passcode for it and I'm about to give that to you. Should you want to use this tool? What do you get with this market update? Number one, the cost is amazing. It's free. Ninety nine free,$99, right? All you gotta do is put it in that passcode. If you would like to subscribe to it to get monthly or weekly updates, you can do that. The coolest thing about this is that it's so hyper local and you can plug in any zip code, city or county and get market information about what's happening now in the real estate market place. So for example, right now, this is all the zip codes and Cucamonga. It says, I can read that. Um, it says the median list price in range for Komodo overall is 88 market action index at 45 last month it was 50, so obviously it's showing a little bit of a cooling trend, but that's also okay to a degree. With this chart, you can look through the information and find a over the last three years the trends as to what's been happening are short. It is a 90 day hr based upon activity and what things are happening and that the chart down below is going to be based upon several different parameters. This is a three year chart based upon the information. And then this chart at the bottom breaks your marketing information downloaded into quadrants. So in Rancho overall you have four 80, six, 26, seven 65 and almost one point$1,000,000. And you also get to see reflected days on market for those specific quadrants. I think this information is invaluable whether you're door knocking, doing an open house or going on a listing appointment. So if you don't already have access to this information, this is a great way to get it. So questions, anybody enough? Oh, one other little secret thing on here. There's a little dropdown days on market because I know this is a really hot topic right now as to what's going on in the market likes. Alright, high points are higher days on market here that says February. And by the way that's a springboard in 2016 that says January, February 2017 and this is January, February 2018, right? Well let's look at the low points. We Got July 29th, we have July seventh and so far we have August 10th, right? So you can see there's definitely trends. So if you're seeing days on market go up, don't be totally alarmed. Yes there might be a shift, there might be things happening, but it's, it's traditional over in this area for sure that this is what happens in our marketplace. So leverage this. The best of your ability. Know that when you break these things down on market segments, these lines correlate with each quadrant here. So it's on[inaudible] dot com. Check it out. Great. Great tool question. You answered. Cool. So team title Vi Dot Com. Under the market update, it's in the middle of the page. Um, all right. Last but not least, before I turn it over to our first speaker of the day, I'm a really smart agent. Came to me one day and said, Hey Ryan, I'm you youtube general. And I said, yes, yes I didn't. She says, do you have videos on it? Yeah, she says, but do you have like how to gel on youtube videos on it? So came back and said you do so many different trainings and so many different things, but sometimes I'm embarrassed to pickup the phone and call you to ask you to show me what you've just shown me. So I started creating two to four minute how tos with screenshots and walk them through step by step how to do specific tasks. So if you're looking, there's quite a few on here, there's still a part of you to be added, but this might be a great resource library for you as well. So never be afraid to call, text or email as we want to help. We want to support, we want to be a part of your team. But just wanted to give you different options as to how to get those things done. It makes sense. It's also a great little throw out there for you guys once this, when you, uh, when you get questions from your clients do any of the questions. I have a tendency of repeating themselves. Right? So what about you, Margaret, with inside of the questions you need to ask the to somewhat repeated. Repetitive. Yeah. I think everybody in the room can say that. So I'm sure that if you haven't done this yourself, someone brought it to me and I thought it wasn't great tidbit about creating a how to channel to help educate our clients. Maybe what we can't answer the phone or we're not thinking that they would actually go and watch the videos won't. We may not be available or at night or weekends. So food for thought. You might have a youtube channel, but the question is do you have answers to questions that they're asking regularly that they can find or other people, potential clients can find. It makes sense. All right. Now there is a tremendous amount of information about to be shared with you about these topics and so I want to make sure that you're taking notes. Number one, you can throw the notes away when you leave, but we are a lot more likely to remember what we learned when we write it down. Also, you've heard people mentioned about the ideas of sharing is caring a don't be a secret agent. Those kinds of things. Rather than, I don't understand this social media thing, how does it work? You know, social media is a blessing and a curse, let's be honest, right? You're trying to find content like I'm going to do an email newsletter next week. I'm take notes, write it down, add to your email content next week. What do you put that stuff together? Also, as you find big nuggets today, feel free to put out there your social media. I'm like, Gosh, I just thought that you can say don't, don't give away the store, but you know, tell the story. Let people relate to see in many cases when I asked people, what are you doing to market to your sphere, your friends, your family, and past clients? I don't want to sell them. I don't want to sell them your sales people. Hello, number one. Number two, if your an educating you are not selling them. Does that make sense? If you're educating your not selling them, so you're not to shame anybody because we have only a little bit for Christmas, but number one questions here, right? You don't want to find a new farm. Can you do farms? Yes, we can do farms. Absolutely. One hundred percent. Before you do a new form, let me go back and get one of my favorite sales coaches. Jeffreygitomer was in a seminar about this size, or actually probably three times the size. He says how many people in the room were raised on the farm? Anybody raised the maybe? What do any of those dairy farms were read by and Ontario. There's lots of areas, right? It's all right. People. When you got up in the morning, did you go to your neighbor's farm and build their cows first? This is why the hell don't we do that in our own business? Why are we always trying to go? But until you do farm, before we go back and establish ourselves with our, with people that know love and trust us. Right? So here's the question. Raise your hands. Have you ever known somebody that's bought or sold real estate and did use? You might expect everybody to raise the number one question to ask on that is number one to answer. Oh, they forgot I did real estate. Number two, most common answer is they didn't want it either grade school information, personal. What are you going to do? Right? If you never asked, will never right. You never educate. If you don't understand those items, 80 percent of agents fail to follow up with their clients after the close of the sale, within the first 12 months, 80 percent. And then we wonder why most of the businesses done by 10 or 20 percent or will they just bought. They're not going to do anything else. What about the friends and family to people that they do know, so never take those people for granted. What I'm saying is during today's training, take the nuggets, take the notes, share them on social media, social media and email, social media, email, and a newsletter you never know who they know that could be looking for this and they're looking for the answer and they just didn't even know who to ask. Right? So I think I've said enough for now, but I feel so confident and passionate about that, which leads me into a big thing for many of you guys in the room here, but a week or so, we received the letter from the corporate office in Jacksonville, Florida and said that we were honored with being one of the top five percent in the nation for all fidelity, national pedigree of random.
Speaker 1:So that's.
Speaker 3:I don't only believe in teaching and training what I know what actually the house that I probably shouldn't be the house. She would've been just not only the president, not only client and the president or the president of client. Two things. Industry took it for about two lenses. You good? You said? Excuse us? Anyways, we can't basic, you know, they always
Speaker 4:tell me this. Say God only make so many perfect heads and the rest of you put hair off. Is there? I'd rather it's all got to, you know, we're fighting the same fight. I got to. Alright, well the first speaker this morning is Mr Greg burdens from a ipx 10:31 exchange and I'd like to read him with a warm welcome. So Ms Dot Bradford. Yeah. One time to get a mic like this. I feel like I'm doing standup comedy so we're good with that deal and walk and talk. So good morning. Good morning. Uh, my name is Greg Burns. I worked for a company called the investment property exchange. We are a wholly owned subsidiary of fidelity national financial, which makes type or ivf sister companies where the qualified intermediary for fidelity. Uh, you know, people call us an accommodator facilitator. Just don't call me late for lunch. So I've been in the business for about 20, about 19 years, almost 20 years now. Um, I last month ended about 235 transactions. My client's total about$600 million dollars for the real estate. Um, so a lot of people out there, they're doing exchanges right in our company did about 2000 exchanges last month or so, and we turn over about$4,000,000,000 in exchange funds about every 90 days. So there's a lot of people out there. They're doing exchanges. I think the baby boomer generation is the big ones that are out there doing exchanges. They're doing it for various reasons. They're doing it to, you know, consolidate assets to increase cash flow, right? Because I'm going to be retiring from my job at some point and I need to dig these investments and I don't want to change my lifestyle. So I might be looking for something that maybe doesn't do as well for appreciation that maybe does better for cash flow for me. Right? And so, uh, they do it for geographic reasons moving into different parts of the country. Remember section 10, 31 is the federal tax code. Basically this code for. So we're all on the same page, says that you can sell a property that you've held for investment or business use and exchange it for another property that you intend to hold for investment or business use, and you could defer the capital gains tax, you would have paid on that sale. And then the new property, it's actually interesting because up until the beginning of this year, it doesn't say real estate, it says property held for investment or business use. So before, uh, you know, at the beginning of this year, we used to exchange all kinds of things. We exchanged artwork, you know, tug boats, aircraft, uh, artwork, uh, you know, changed a farming equipment back to pick only thing. I haven't figured out how to exchange your husbands and wives, but you have to be someone Robbins told me that there was a website for that. I just took their word for it. Um, but with tax reform came out a limited 10 section 10, 31 only to real estate, right? So now 10, 31 only qualifies for real estate. So I think the one of the places you've got to start with 10:31 right here. Let's say I own a duplex in Rancho Cucamonga and I load it for 10 years and you were talking to me about listing that duplex for sale and at some point during that conversation I asked you if I just decided to sell my property today and pay my taxes, what kind of taxes would I have to pay? What would you guys say? Talk to your CPA so I can take that away. That's easy way out, right? I'm of the opinion that anytime that you are talking about something that's not in your area of expertise, you want to give them a answer, not the answer. The answer in this case certainly come from every account. An easy way to get out of that question is tell them at a minimum they're going to pay 24 point three percent, right? That's 15 percent federal, nine point three percent state. Those were the two minimum taxes they could pay on the sale of that property. Now that number could certainly go up and I've seen it take, you know, get as high into the 40 percent range, but the reality of it is, is that what I've found is when I start throwing numbers out like, Oh, you got to pay 15 percent federal, 25 percent recapture depreciation, and then you're going to pay somewhere between nine point three to 13 point three percent on the total gain and if the gain exceeds$250,000, we're going to pay another three point eight in healthcare taxes. It's like glaze goes over their eyes and I'm like, right, so 24 point three is a good answer. So I'd say, listen, I don't want to pay that tax, but what I would like to do, I'd like to sell my duplex here in Rancho and I'd like to 10:31, exchange it into a vacation home in Hawaii. Can I do that? Absolutely. I can do that. Right? So vacational qualifies as an investment if it's used by the taxpayer, less than two weeks out of the year or less than 10 percent of the time it's been rented. And they have to show at least two weeks of income on it. The two weeks of income is relatively new. I would say it's probably three or four years old. He used to not have to show any income on the property, but now you have to show at least two weeks. Also, if you're applying is they're making any kind of repairs to the property. It does not account against their two weeks. So needless to say, I have clients that do a lot of maintenance on their properties so they can spend more time with their property. Um, so that's one of the things that we're seeing people do at. One of the things that we think that's going to happen is, is that we think ultimately they probably will convert these to the retirement homes, right? So because in section 10, 31, it doesn't say, hey, you gotta hold, it's an investment forever. It just says that your initial intention when you purchase a property had to be the dude. We're going to hold it for investment. So fine bought a property, let's say in Hawaii. And at some point I wanted to convert it to my primary residence. How long do you think I should hold it before implemented? Two years. Where do you guys thing one year. So there's a revenue ruling out there that says any property that's been held for investment for two years or more in an audit, the irs can't challenge to help for investment portion of the exchange. So if I hold that property for two years as an investment, I can pretty much do whatever I want with it now. There's nothing in the code that says if I build it for less time, that they will challenge it. But we know that if they hold it for two years, they don't have any issues. Right. So that's, you know. So we're seeing a fair number of people that are doing that. Let's face it, it's very expensive to live in California. I know that because I just spent about, uh, last week I spent my entire week in Oregon and uh, I could cry probably, you know, in the area I was in maybe the biggest house and the whole neighborhood for half of what my house costs here. Uh, you know, my wife went to trader Joe's, she called me up and she said, I can't believe that I got out of there for under 100 bucks. I could never do that in California, especially since we have four kids. But the fact of the matter is it's expensive to retire in California and, and uh, and so in this particular area that we're importing nine Californians a week into this particular market to in Oregon. And so I think we are seeing people that are exchanging, you know, out of properties here in California that were held for investment in other markets that where they're going to, you know, ultimately probably retire right. Is something that they could definitely do. I think one of the things that we are challenged with as agents as we know a little bit about 10:31 and we assume that our clients that own investment property also understand 10:31 and one what they could do with it. I can tell you from all the phone calls I get on a regular basis, but that's not the case. I get people to call me all the time that say, listen, I know that in a 10:31 I've got to buy like kind property, so I'm selling this duplex. I know I probably have to go buy another duplex or maybe I could buy three units. The reality of that is the asset class of the real estate doesn't make any difference. I can sell a duplex, I can go buy an industrial building, I can go buy single family residence, I can go buy apartments. I can go by at least doesn't make any difference as long as it's real estate. As long as I hold that property for investment or business use at qualifies under section 10, 31. Right? I can also consolidate assets, right, and I could sell multiple properties. I've got a client right now selling five properties, which is a little bit aggressive, I'll say, but you're selling five properties and exchanging them into one property. She's trying to consolidate your assets because she's tired of managing these five holes, right? So she's going to consolidate them into one property that could be professionally managed to free up her time. Right now, what if I came to you and I said this, I want to sell my duplex and I want to buy a property that produces income for me, but that has no manager responsibilities. What kind of real estate exists that can do that? Is there a real estate that exists that can do that? Or am I just making this up? So if I sell one to sell my duplex, I want to do a 10, 31 exchange. I want to go buy more real estate. Right? But I don't want to have any manager responsibilities. What can I go by that? Does that cemetery cemetery that's out there? Has anybody heard of a triple net lease? See them all over the place, right? Walmart, Walgreens, Jack in the box, Mcdonald's, you know, the reality is, is that somebody owns the land and the building, right? And you know, Mcdonald's or Jack in the box for Walmart, is there a tenant, they pay the rent every month, but they're responsible for all the maintenance on that property. So I'll tell you guys kind of a funny story. So my stepfather theory in real estate was we own apartments because people always need a place to live and no matter what happens, we can keep our apartment's full, we can lower our rents, we can give away free. But whatever happens, we can always keep them full, which is, you know, pretty good investment philosophy. He made a lot of money doing it. But about 12 years ago we had sold the property, not department, apartment building. You already had a bunch of units under management. If he was personally managing, which is not a great. And uh, uh, so we sell this property, we're going to 10, 31 exchange in about 10 days into it. He has a stroke and is completely out of it. So I have to step in with a power of attorney to complete this exchange. So at the time I'm friends with a guy named Bob Nardelli who was the CEO of Home Depot. Home Depot owns a lot of their own stores, but they do sell some of them. So I'm out of a meeting with him and I said, hey bob, I made this trade. I really need to buy a property. Will you sell me one of your properties? And you said, yeah, we've got this property in Alabama that will sell you. So I ended up buying this home depot in Birmingham, Alabama. So four or five months go by, my stepfather starts to kind of feel better. The cobwebs started clearing and he calls me one night and he says, Hey, whatever happened to that exchange that we did on our property and Amani. I said, well, we completed a dad. He said, oh, well what did we buy? I said, we bought a home depot. So let me get this straight. I'm going to have to go and put on more of those orange aprons and go down to the home depot. And I said, no, no, we don't know the business. We own the land and the building. Uh, and uh, you know, and hope people's, our tenant, they pay us rent. He said, oh, okay. He said it's the one demo mountain. And I said, no one in Glendora. I said, no, he's always the one to no money right now. So when I said it's an Alabama dead, he said, son, how am I going to manage this property in Alabama? And I said, dad, they don't want to slump or like you managing their property, right? But people want to be responsible for the, for the way that their property looks right the same way. But you know, Mcdonald's or Carl's Jr, they're responsible for the maintenance of the property. They want to put a new landscaping. They just do it right. Take care of the insurance. They pay the taxes. So they act like the true owner of the property. But you know, Home Depot's primary business is not real estate right there. Re, you know, they're a retailer. That's what they want to spend their money on. They don't want a bunch of the money up in real estate, right, because they have no stock that they got things. They got to keep in stock. So three or four years down the road, my stepfather's and Georgia visiting my niece and he calls me up and says, Hey, since I'm in this part of the country, I'm going to go by and see our property. I said, okay. So he texts my drag my mom out of the hotel, you know, drive by this property, and two nights later he calls me and he says, Hey, I went by and saw that property. I said, what'd you think? He said, you're right. It looks just like a home depot. When I first started in the business about 19 years ago, I knew one person that didn't get this right, and I'm not suggesting that you guys, anybody in here become an expert in that. Nice. Right? That's not, that's not the answer, but the thing is, is that just know that it exists. Right today, they're probably no more than 400 professionals that only sell that these. And it's opened up a national market and it took a while for my dad to kind of get to the point where he was like, you know what, I don't have to be able to go drive to see my property. I know home depot is going to pay their rent. Right? So the point of that story was just to kind of open up your mind to the other possibilities that existed in real estate. You may have a client that owns three or four investment properties, either single family homes and they say, listen, I'm just tired of managing these properties right at the terrible teas. Real estate, you know, the toilets attacks is the termites attendance, all the fun things that are all with owning those properties. You know, the exchange process. What I always tell my clients is it's pretty easy, right? It's just a sale and a purchase. I get clients call me all the time, Greg. Oh my gosh, I got your number from Ryan and I am so nervous. I'm like, what? I've never done an exchange before. I just got this listing. I'm like, it's not a big deal right? It's not a big deal, right. And get the property, you know, they signed the listing agreement and you market the property for sale just as you would any other property. A lot of people ask me the question like if I know it's an exchange, should that put that in the comments of the mls? My opinion has always been known and I'll tell you why. Ten, 31 is not a condition of sale, right? The buyer does not have to cooperate with your sellers exchange. The only requirement is that they notify the buyer that the seller of the property is doing the exchange. I could write that on a piece of paper, wad it up and throw it to the buyer if I want. Right. That's all that I have to do. So it's not required to be in there. And the reason that I say is I don't like to put it there is because I received maybe, I don't know, a couple hundred phone calls over the years for people who say, Hey Greg, you know, so and so told me to give you a call. I've got this buyer and I'm out shopping for properties for them and I found this property in the mls. I'd really like to show them, but my buyer doesn't want to do an exchange and says the property subject to an exchange and I say, well, the seller of the property is doing an exchange. The buyers responding and they're like, well, we don't want to be involved in that. So I spent the next 15 minutes explaining it to them and you know how the process works. Prefer every one phone call I get like that. There's probably a hundred that I don't. Right. And so you may have an agent that has a good buyer but just doesn't want to look foolish from their customer because they don't understand the exchange process. Right. And so I tell the story at the inland valleys association, realtors and Retina redlands and there's room for like this right? Agents from all different places. And some guy raises his hand and says, yeah, I was that guy. I was like, I'm not sure you want to admit them for longer periods, but whatever. Right? So get it listed for sale. Offer comes in, you need to put some language in the contract to the effect that your clients doing the exchange, right? So that's the first thing that's a little bit different, right? The other thing that you may want to do is you may want to try to build the extensions in to the contract for your client. The client only has five days from the date that escrow closes to identify a replacement property. It's a pretty short period of time right now. What I explained to customers, like as customers, they get nervous about putting the property on the market because they feel like they're not going to have enough time to find the property that they want to buy. I explained it to them like this. Listen, a standard contract has the 21 day financing contingency, right? So you can add that onto your 45 days, right? So let's call it 20 days. So 20 days before your escrow even closes on your sale, right? You can aggressively start making offers because you have that 21 day contingency. So now you have like 65 days to identify property while 65 days still doesn't seem like a lot of time. Well what if we negotiated in one, let's say 15 day extension. So the seller has the right to extend the escrow one time for 15 days. Typically buyers aren't, you know, don't push back very often on that 15 days. And so if you add that 15 days, that 65 days, now you have like 80 days to find a replacement property. Eighty days seems like a significant amount of time to find the property. Right? That's an easy way to kind of explain to the people. Listen, we don't just have 45 days now. I like the 45 days as an agent. I called the dating period, right? Because within the 45 days you can make as many offers as you want. So before I was married, right? I could date as many people as I want it. Right. But once I've identified property and I passed the 45 days, it's like now that I'm married with four kids, right? My wife could probably run me over with the car, I just crawl back into the house. They're married to those properties they've identified, they cannot change them. Right? So it forces them to get over, you know, little insignificant things. I had a client call me, you know, a couple months ago, big transaction in Dana point, he said, hey, I think I'm going to blow out of this deal. I said, why is that? He said, there's a bunch of Gfi switches that are supposed to be in this house and it's going to cost about$5,000. I said, well, what's your tax liability? So about, uh, talk to my accounts about 700,000. I said, well, do you want to just like spend five grand and just put the switches in or do you want to pay 700 grand tax? What do you know? What do you know? And so ultimately you decided to, you know, put the Gfi as a so. But the point of that is, is that you have a very motivated buyer, right? Once you get past that, closed the best girl to sail the 45 days with very quickly and so we have the one difference, right, that we had to put some language in the contract to the fact that the sellers doing an exchange, right? That's one difference of a traditional sale. The second thing that you need to do, right, which is different from a traditional sale because you have to hire a company like ours, right? Ultimately, it's not your responsibility to do that, but normally you're the person that's doing it right? So, and that's as simple as typically getting me the escrow officers contact information and we contact them and get the exchange set up. That typically happens within like a 24 hour period. So you know, if you're closing on a deal today and you client called you and said, oh no, I talked to my account and have to do an exchange. We can still get it done today, but it's not the end of the world. But typically you want to get, you know, a week or two before escrow closes at that point, get an exchange company involved. Hopefully those ipx but so sale closes, right? Just like any other sale deed goes directly from the seller to the new buyer, but the proceeds from the sale come over to us and then typically Ryan and I will go to like Cabo or we'll go to vegas or something. Just a quick trip. Right? So at that point, that 45 day identification period starts. There's two or three actually ways to identify property. Here's the three property rule allows us to identify three properties. There's the 200 percent rule, which doesn't limit the number of properties that they could identify. It just limits the aggregate value to twice the value of the property that they sold. So if I sell for 700,000, I can identify up to one point$4 million under the 200 percent rule. There also is a 95 percent rule. I'm not going to talk about it. You're never going to use it. I've seen it used like five times in the tens of thousands of transactions that we've done. Pretty simple selling one, buying one three property rule, selling one, buying multiple properties, probably the 200 percent rule, right? Typically that's what built the way it goes. Client identifies properties. We send them out a form, they fill in the property addresses on the form signed and dated, sent into us. We'll countersign it, and David now they've been undefined properties. They have 135 days after that to get one of those properties close, right? Or multiples, right? You could sell one buy multiple properties will assign into those new properties as they go under contract and into escrow. When you're ready to close. Client gives us written authorization to wire the funds. We wire the funds, get it closed within that 180 day period. That's basically what a 10, 31 is. It's just a sale and a purchase, right? It's not that big of a deal. The most important thing when talking to somebody about doing an exchange is to have a plan in place, right? Most of my customers that get into trouble, that are doing a 10, 31, don't go into it with any plan, right? They call me up and they say, Greg, I'm really having trouble finding the property that I want to buy. And I say, well, what's the problem? Well, everything is just so. I say, well, did you get a lot of money from the property that you sold? They say, well, yeah, that's why I sold it. Do you think everybody else is giving them properties or whatever? Right. It's not the way that it works. It's a trade, right? I'm selling care. I buying here St Market, right? Not, not. So I've got to go into it with a plan. What am I trying to accomplish? Right? Am I trying to find a property that produces better income for me? Right. Am I trying to reduce manage responsibilities? Am I trying to buy a better geographic location? You see a lot of people right now buying properties for their kids, know a lot of the baby boomer generation and finding out, or maybe it's my generation, they're finding out that you know, their kids are graduating college and they're getting these jobs where they're making, you know, 30, 40,$50,000 a year and they're never going to be able to afford a home in the next 10 or 15 years. So these parents are saying, listen, we're going to sell our investment property, we're gonna buy a house for you and then you're going to have to pay us rent, right? As long as you pay us fair market rent, know you could live in this property. I mean it'd be your home, right? So we're seeing a fair number of people do that because those prices are crazy right now, right? It's super expensive to own property. Now there are a variation of this kind of these businesses, reduced management responsibility business, right? And so they're gonna have the next gentleman. That stuff is going to talk to you about trading into. Because not everybody could go out and buy their own McDonald's, not everybody's by the walgreens or home depot. And so because of that, it's created a completely separate market called the dst market to the Delaware statutory trust market. And uh, our next speaker is going to kind of talk about that. So I don't know if I'm just gonna bring him up or if I'm going to. Ryan's going to come up or Ryan's on the golf course. Okay. Ryan's on the golf course. He's running, he's running it. We don't, we're gonna answer questions at the end of it. So as soon as. So write it down and ask it. All right. Thank you sir.
Speaker 3:Also, in case this is a very important question that gets asked each and every time. Yes. The bathroom is out the door to the left and an immediate left. No word there. You're still company will stand in the back. I see. Maybe one chair over here if anybody wants to second part. There's one more chair over there. So we're looking, we got, um, also, congratulations. You guys have posted and you said to your peer learning, but you got to post nugget, you got to put yourself in a question. What was something from that first part, that first session then if you're going to post, you need to pose as either a story or a question to your database. You know, it is great to be able to post and put things out there, but if you don't get the engagement, what's it all for it in the day? It's like a door they opens. Would you agree? All right. So if we're gonna learn, we're gonna take the time, invest in ourselves and be here. We needed to not be like every or many of the events that we attend where we bring stuff in, we put it here and then we never let it happen. Right? So people don't know what we're doing and how we're doing it and why we're doing all right. I'm going to curse for a minute. So plug your ears if you don't want to hear. You're ready. Disruptive, purple bricks, Red Fin, you know? Um, and the reason I want to say those things to you is those are disruptors in the marketplace. There may be people here that might be part of those organizations in that spot. Everything runs its course and does it thing. I totally get it. The big thing about this though, at the same time is if we don't show the value that we bring to a transaction, if we don't show them value based upon the education work continuing to put into our heads that we're just the same as the transactional online system. You to get it. So if we want to be able to be that resource for our clients, for our people, we need to make sure that they understand they don't. Most people have no idea the complexity as to what goes into a transaction on a daily basis. Make sure that they know, educate. All right. Just to reminder this once, once the, once the thoughts leave, once the patient leaves, you may not remember what to post. So I want to make sure that I'm very aggressive at promoting that part. Alright, well I probably didn't turn a note round. Sure. You're really go.
Speaker 5:Alright, thank you. My Name's Phillip Board and I'll be one of the shortest speakers today. You haven't met Joliet. He's told her. Um, so, uh, I own a one on one financial financial planning asset manager for it with Joel and uh, for thinking, well, why are we here? Because aren't we? Are competition trying to take the money when you're trying to sell them the property? And the answer is no. We actually have a niche project of products that, uh, after you're done with your 10:31, if you've got somebody that is unable to identify a property or for some reason it falls out of escrow, like the guy that didn't want to pay the five grand to do the Gfi switches. We can be a backup property. So can I steal this for a second? So on the sheet right here, this is a list of current 10, 31 exchange properties available and it shows where they are in the country, what they pay to the client. So case in point, uh, I'm going to pick up my parents. My parents are 77 years old. They bought some rental real estate up in northern California. They bought it for a couple hundred thousand dollars on a 10:31 whole. It's worth$500. Grand trouble is they've been renting it like it was 300 grand. They've been paying maintenance, insurance, taxes, all the things that they're dealing with. They see these nice refrigerator, air conditioner, what have you. They were done with it. They sold the property, we put it in to some of these things here. They own a multifamily in the other part of the other parts of the country, but now their income's gone from a net of$1,300 to$2,600 a month. Not a huge deal. So we're not here to take that multimillion dollar deal. But let's say you're playing identifies a property that is worth less than the rules that were outlined by a rick. Right? Greg, sorry. Um, and uh, you've got some money left over. Well, we can take that so that it's not subject to taxes if they don't want to. So we can fill in that gap if they're having trouble finding a piece of property. We can be the backup property on any of these that are available and these change weekly, we get different ones all the time. So we're here to fill in that gap for you. So like I said, shortest speaker, we're here just to fill in that gap. It's not going to be for everybody. I'm one of the other pieces that you have here is produced by a company called Cantor Fitzgerald. Uh, if you don't know who they are, you should, uh, then probably one of the largest players in real estate in the patient. If the whole world, and these are the people that can help you get into that net lease. And it might be that you've got a client that might own 20 percent of it. You might have a client that owns five or what have you. So the groups, people together to own a piece of property, a, we had several a few years ago. Walgreens kept coming up there on the corner of every street. Prime corners, great units, triple net, a 20 year leases. Chances are you're going to, your client's going to be in five to seven years. The downside to working with us is that you can't park the money with us thinking that in six months from now, oh, I found a property for you and we can go ahead and move it. You can't do that. Just like any real estate. You need to own it for a period of time, so generally you've got to have a time horizon of five to seven years. One of the other benefits of doing what we're doing, just like any other real estate transaction is on the depth of the property owner who can still step up in basis real familiar with that term, stepping up in basis so you buy the property or your tax basis is maybe a couple hundred grand. It's worth a couple million. Dad passes away, fam children inherited for$2,000,000, sell it. When it comes up. They only been the capital gains on the difference between the stepped up basis of 2 million and the current market price, whatever that is, so that there's that opportunity as well. So going back to my parents, I was rather pleased that they work with this 10, 31. I've increased their income, which means I'm helping them out. Um, and uh, now they're, they're living much better. They spend less time managing your property, they have more income and when they pass away and they will eventually, it will step up in basis for me. So nobody pays accountable means there's kind of a nice thing now where things get tricky. Is there anybody in here that does commercial commercial in here? We've got a couple of people back here. Okay. So commercial gets a little bit trickier. Um, and they might be two components to a commercial deal and I'll need some help with. Is that 10:31 overseas? I want to make sure I'm not speaking. Murphy's not there. That's okay. So generally real estate is one thing. Okay. And I think he alluded to that. They changed the rules early this year. It is real estate. So you've been a business owner for a million dollars in real estate, but the business is another couple million. He said, based on what he was saying earlier, they can no longer include the sale of the business with the 10:31. So now you've got two components, you guys can go and do the real estate and the cell here. We'll go by there and let's go get up a home depot in Alabama. Sure why not? But the taxable gain on the business, and usually it's 100 percent because usually owners have depreciated the value altogether. So it's all a game. That's where our next speaker comes up, told you I was going to be short. Um, he's going to talk about something called for sales trust and that's where that piece fits in. But now I'm going to go off topic for a minute. As financial advisors, we're kind of in the same boat as you. We've got fee compression all over the place. You've got the breakfast, is that what it is that you guys have where they're just writing it down? It's the race to zero. And Brian's absolutely correct. Your value needs to be brought to the table. So one of the things that we do in our business is that our new clients are actually our best referral sources because top of mind. So we made sure that as a new client comes on, were reaching out to them and communicating with them every step of the way and then what their accounts we then continue to communicate with them because we know that first, the honeymoon period, that first three months to six months is one way to get the most referrals out of those clients. So it works in my business. It works in your business. So by all means, keep in contact with them. So with that being said, Joel and Brian will introduce, Joel told you shortlist,
Speaker 3:you stayed assault together. We're still way over 66 feet here, Joel and I, uh, we, we raised the bar, I guess a little bit. They can beat you again. We're going to bring anything. Alright. So Jo jo and I went to college together and we played on a collegiate volleyball team traveling the West Coast, driving down on the team up at pepperdine. And I drove down on us on that one. Anyway, it was a good time. And uh, so it's great to be able to find people that know what they're doing, what's happening comes out and says, Hey, we've got this niche product and I don't think too many people know about it, but it's definitely an option that people can leverage. So your real Mr. Joel Howorth
Speaker 1:right?
Speaker 6:Has anybody heard of a deferred sales trust? One? Okay, so we're going to go real high level. Um, obviously we have a table back there and we have our business cards. So if you have something that comes out and you want a little more education on this, please feel free to reach out with more than happy to sit down with you, talk through. Do you have a case? If you have something specific, it's on. We'll walk through whether it's different sales trust, whether it's 10:31, I'll walk you through that, that she has all these properties that are available under, under that scenario. So there's a lot of different things going on. Really depends on what your client is looking to do. So let us help you attended, you know, walk through that, figure out what questions to ask and get through that. So deferred sales trust. So the estate planning team is a group that we're associated with, some financial advisors, there's tax attorneys, there's trust attorneys that write the different sales strategies and actual trucks just like Kinda like your living trust. It's a document that controls the assets and tell us what that was kind of the rules of the game. And so through them we are able to offer this now, right now there's a, you know, taxes are a huge thing. So everybody's looking at taxes, am I going to sell this? What tactics am I going to incur? So I'm sure you guys have people that you're talking to and they say, well, I'm not going to sell this because I don't want to do that for a sec. We've got a couple of different options here that we can really take a look at to solve that issue. And right now it's a perfect storm between demographics, taxation, low interest rates. You know, the, the baby boomers are coming in, they're starting to retire. They're starting to take that wealth that they have amassed over these number of years and whether they're trying to sell businesses property a highly appreciate highly appreciated assets. So the first sales structure you can, I know they've done exotic cars, expensive by a Lens, our work, just anything that's highly appreciated, they can, they can typically use this for see taxation were pretty high tax rates. Does anybody think tax rates are going lower the next few years? Right? Let's just gonna keep going up. So this gives us the ability to really control what our clients are looking to do. And then obviously low interest. So there's, you know, if you're gonna, if they're gonna hold the loan, those interesting. I'm very attractive and get you know, four or five, six percent, but that's not very attractive and when they're looking to generate income and uh, you know, for whether it's retirement or, or just as a spending. So what's your options today? Obviously pretty simple. Don't sell because I don't want to deal with the taxes. Got a 10, 31 exchange options, deferred sales trust goes a little bit detail and then sound pay the tax, which is typically not a good option for anybody when they're talking about that.
Speaker 1:So
Speaker 6:this is kind of deferred sales trust in a nutshell. So you have your clients, they have some assets to sell, whether it's an apartment building, do a commercial building, anything like that. You're going to have a third party trustee that's going to manage those assets, that's going to control that kind of like are Kinda like Greg and the and the qualified intermediary. We're going to have that. That set up the trust. The assets are then put in the trust. The trust is going to sell those assets to the buyer, so it's not really a whole lot of different than a typical transaction. So you just have that middle, that middle person that the trustee that's going to be in the middle. We'll find that buyer. The buyer takes that cash and that goes back into this, into the trust. Now, from there, if I'm the person that's selling the assets, you're you. I'm using your services as a realtor. I'm selling my my 10 story commercial building here. Those are the. The money that we make is going to sit in their first sale stress. I still have the ultimate sand. What happens with those with my trusty, the gentleman sitting there, so we said we will break down what myself as a client and say I sold this building. I want to get eight percent income from it. Then I will have, you know, my advisor will then help me build that investment plan out and we can take that money that we sold from the real estate and invest in a number of different ways that we can invest it in the real estate properties that we have on that list, stocks, bonds, mutual funds, anything like that, and then that from the DSD, the DSD and is going to make that payment to myself. I sold that building, but the first sale, stressful report every month provide that income. They can even defer that income and if they don't need it right now, somebody sells that. You know, we're at towards the end of the year, if somebody says I don't need any income until 2019 because I have other income and I don't want to pay more taxes, they can just defer it. So there's a lot of different ways that they can control the taxes and the income from that trust. Basic basic example, selling a business of$5, million sale, million dollar cost basis. They just the sell and walk away. We got a$4,000,000 capital gain, almost a million and half dollars in taxes. Nobody wants to pay that. Right?
Speaker 1:Okay.
Speaker 6:Caesar with. But I don't want to pay Caesar Caesar deserves and there's a lot of flexibility within DSTL. You can, you can invest in real estate. You're going to have some physical real estate like the like the 10:31 that we talked about earlier, but you can. We can take that money from the diversity sales stress and within the deferred sales trust, again, there's a little more little more detail oriented, but you can take that money and say, look, I want to go buy another building and you've got some flexibility there and it there's a little less on the timing of when I've gone to per se, as long as that money stays in the trust, we can then go buy a piece of real estate investing business. There's a lot of different options we can do that. So lots of flexibility within inside the sales stress. And then on the legal aspect of it, it's really under the installment sale. Irs rules, um, the stress been around for 21 years with. There's numerous irs audits on an Olin came back clean group by Finra. Finra is our regulatory body is financial advisors. So they're pretty, they're very, very stickler for any, anything out of the ordinary. They reviewed it. They've, um, they've, uh, they've improved it every time. So. And then when you do a deferred sales trust tax attorneys and lawyers that draw that up, they're going to be there behind the scenes that should it ever come under an audit, they're going to step up and take care of the audit for you. It's for the client that are always going to the fees that they pay to, to do the trust is included for as long as you don't have the trust. So the trustee that is the one that actually holds those investments. So there's a little too fast.
Speaker 1:There's
Speaker 6:a network of trustees that way, that um, the state planning team has their, they have a kind of spread all around the country. So, um, you know, we're doing a transaction here. We have a couple of trustees in California that we use. There's some in Florida, some sprinkled out throughout the country. Um, but, uh, this picture of Bob Hinkley, he's the one that started with the estate planning team. So we work closely with him when we get into transactions like this. Amnesty know so much more than we're ever going to cover, so detail oriented. So anytime you come up with any, any situations like this, you know, reach out to us and we'll walk you through the questions to ask and figure out if this works best. And then kind of on a marketing side, you guys have the ability to, uh, become part of the estate planning that you choose. So like myself as a broker, I meet with real estate professionals, tax professionals, commercial real estate, you know, to try and get referrals, but we can also, you also have the ability to, uh, become members of the DSAP tooth to kind of start working with this. And then you get your own website that you can then refer the clients in. And if you have clients that end up doing a different sale stress, you actually get some compensation from it. So the trends of the trustee fees and everything that are charged, you can get a portion of that. So there's some, some additional ways to make money out of those. A, again, they talked about, it's kind of a niche product. You're not going to run into this every day. Typically these are much larger transactions would fit. We've seen Simon one to$2,000,000, but typically it's 5:10. I'm somebody front that it's connected to our. I was working on a$50 million dollar dst right now, so we typically very the transactions when you run into it, so what the website looks like on the right hand side and put some basic information. If you're got a client, we have our, our website on a. We walked through it and just plug the information in. That comes to us. Then we can reach out to start working with you on a. wouldn't get a proposal. It says how much tax are you going to save if you could do this based on the client situation and then we can start walking through what the next steps are if they want to follow through with that. And that's it for me. Any questions? We'll start taking some questions and open that
Speaker 3:we're gonna bring them back there. Alright. So while everyone's coming up also as a reminder or a heads up, we do love living in a free country, which is not always other reporting to the tax rules. Um, but you know, um, if you didn't already know, we do serve with operation community here, so there's quite a few volunteers in here. Um, our next big update is going to be November third and we are going to be assembling care packages for those people who are deployed. So if you want to mark your calendars or if you guys happen to know someone to work with someone live near someone that serves overseas. Um, operation community cares is the website on it. Also, we're very grateful that the Inland Valley Association of Realtors has chosen operation community cares is the sole recipient of their golf tournament in September. Um, it's going to be at hidden valley on September twelfth. Uh, there's information on the website as well as the facebook page for golfers sponsors, volunteers. So if that's something you're
Speaker 4:interested in, these keys keeps staring at me so someone won't get very far without them today. If you're missing your keys, they might be up here. Just put that there. Alright, now that to the menu and anterior, which is questions, does anybody have any scenarios that you're currently possibly going through a monopod through in the past? That would be a question for one of these gentlemen.
Speaker 7:If someone just bought a property.
Speaker 4:So if you exchanged the basic rules to defer your taxes are by something equal or greater value in which a soul reinvest all the proceeds of the sale into the new property. Now it's based off the net sales price, but it's not net of the loan instead of closing costs. Right? So if I sell a property, let's say for$740,000,$40,000 that you know, real estate commissions, escrow fees, title insurance fees than my net sales price to 700. If I sell that property, you buy a property, let's say for 600 I could still do an exchange, but I'm going to pay taxes on that hundred thousand dollar difference. A partial exchange. Yeah.
Speaker 7:Any interests?
Speaker 4:Yes. So Monday does trust. So the client can earn interest on the money, they can take the money and they're going to get 10 99 from it for the, for the man, for the interest that they earn. So they can take that revenue and themselves. Most of the time they just roll it into the next property. But it certainly, there's certainly interest or yeah, two separate parties combine 10:31 exchange property. Sure. As long as there's a tenant in common structure, right? So anytime you're doing exchange, you know, you always want to make sure that the taxpayer that's selling the property is the same taxpayer that's five a property. Right. And the reason I say that, let's say that Ryan and I own two separate properties, right? We sold these two properties and Ryan called me up and said, hey, I found a great property that I'd like to buy. Would you want to be my partner? Right? We're both in 10:30 ones and buy this property. Well, if we buy as tenants in common, not a problem, right? Because we now still the same tax payer. But if we form like an LLC or Ryan and I are both members, right and no longer on real estate, Ryan and I own an interest in a partnership, right. And the LLC actually is becomes a taxpayer. So as long as you structure correctly, no problem, you can certainly buy with multiple partners. We also see a number of people right now that are buying partners out. I had a client that just sold a property for an exchange. They own another property with some other partners and they'd like to buy a bigger percentage in that property and a couple of the partners are willing to sell. So what we're gonna do is we're going to need those partners out of the partnership, make them tenants in common. And then with this exchange he has open, he's going to go ahead and buy their interest in the property.
Speaker 7:Yeah,
Speaker 4:as long as you don't close. Otherwise you end up doing a reverse exchange. Right? So there are a few people right now that they're becoming increasingly more popular and in a reverse exchange, but you're basically doing is buying the property that you want before you sell the property that you have. When I say buying, I mean closing, right? And so the challenge with the reverse exchange is that the client can't be entitled to both properties at the same time. So we actually ended up having to take title to one of the two properties. Typically it's the property of the client is buying. So what happens is client fight the property that they want to buy, they put it under contract into escrow. They include just the standard exchange language in there. Typically what happens is they'll try to get the property they want to sell in the market and see if it'll sell, and enough time to get it closed. If they can't, then they hire us to basically assign it. So what we do is we create an llc to buy the property. Your client loves us the money to buy the property for that loan. We give him back a note and deed of trust. And the LLC acquires the property, then we have a triple net lease agreement. Right? We talked about triple net leases earlier, right. That leases the property back to the client. So the client has all the control of the property. Right? We're just holding title. So they, you know, they collect rents are responsible for the management and so from the date that we take title, it's a flip flop of a regular exchange. So they had them 45 days to identify the property that they want to sell and then they have 180 days to get that soul. Once the property they're selling goes under contract and into escrow, we assigned in just like a regular exchange. Right. So closes money comes to us. Ryan and I go to Vegas. We come back Monday though. Yeah, no, totally right. What the money comes to us and then we use that money to pay your client back that money that they loaned us to buy the new property and if there's additional money left over, we use it just to pick up the phone. So that's kind of the way of reverse works.
Speaker 7:Wow.
Speaker 4:That's only if the property closes, you can put something under contract into escrow and as long as your sale closes before your purchase, just a regular exchange.
Speaker 7:Yes. Part of underneath page. Right after.
Speaker 4:Right. So the day escrow closes as day zero, right? We've have 45 days from there to identify and then you have 135 days after that to close. So it's a total of 180 days.
Speaker 7:Yes,
Speaker 4:it'd be, let's say 50 percent. Right. So if they're, you know, there's splitting everything down the middle. You sell a property, let's say for$600,000 that each party would be responsible for replacing$300,000 a
Speaker 7:is
Speaker 4:right. So say you didn't put all the money down, that would be responsible for whatever be considered boot. Yeah, it would be. We would have to the fold. So if the money was, if they sold the property and 100,000 of it, they took his cash, he didn't send an exchange company, a escrow with cold would withhold the three and a third of the 100,007 to the franchise tax board. It's a withholding, it's like a prepayment and your California tax and then the balance that they would pay, you know, when they filed their taxes in April of 2019.
Speaker 3:So I have a question. Uh, I mean I'm just looking timeline, it's trying to go side by side comparison. I think sometimes 10, 31 is going to be a great option. I also think the deferred sales trust might be in another. I'm hearing 180 days on the clothes over here. What's the, what's the timeframe like when they get paid back out through the deferred sales trust?
Speaker 6:I think it paid back after the first session. It can be a number of thing. So I can say once we close, start sending me my interest right away or they can say let's defer for a year or two. They want to get some payments going or one or two years. And then everything that's done for interest only all the capital gains. And typically the trust is written in 10 year increments. So at the end of 10 years they can say go and cash it out and pay the tax it or do I want to go another 10 years and then they pass away their children
Speaker 3:and the idea is basically that they pay at a lesser rate because their income might be less at the time. Right,
Speaker 7:right. Okay.
Speaker 6:Last 10 years ago with others, right. A new thing. We're going to continue the same, the same payout for the next 10 years. And then it can be. They can rewrite it again and again and again. Yeah. They just bought to go further and wants the next generation of their income every year. They would say, why you say that again? Yeah, that's invested. Can Be invested in myself.
Speaker 7:The trust is there some kind of guaranteed investment because it says that you're investing in mutual funds
Speaker 6:depending on the client. So typically depending on what the client wants to get. So if they want to get, you know, they say, Hey, I want to get a ticket and a seven percent interest. Only note on the, on the, the assets or based on the investments in today, and interest rates would probably can't get to that level with a guarantee. So there are certain ways to build it to say we would guarantee your principal, but then obviously your interest, the interest that you're gonna get paid so much lower. So it depends on the client. Typically we don't see that with the people that are in real estate typically have a little more appetite for risk. So we can build out something and again, we're talking over, you know, so many years we can build it. So, so it's going to be able to continue to get that. Let's think of that song that was appetite for destruction at risk for the deferred sales trust. So when they, when you do the transaction, um, there's a, there's a upfront like one and a half percent to the right of the trust and get that completed. Um, there's a trustee fee, those are the trustee that's gonna, you know, kind of make sure that the assets are there. They have a small, uh, 25 or 50 basis point thing. Um, and then depending on how we build those assets, maybe there's a one percent advisory fee, so there's some fees that are built into their upfront one and a half, one and a quarter percent up front to get it all done. And then instead of management fees moving,
Speaker 7:I have a situation where defendant recalled by someone to do a 10:30 wanting to purchase using the proceeds from the sale of their investment property. What they did was important that the kids started to open up their own business and quit their jobs in the middle. So now they have$300,000, which is why they still want to avoid some taxes. So in that scenario, would that fit for you? This list here,
Speaker 5:because we can also take on debt as well, up to about 50 percent. So if they had a piece of property that was$600,000 with the$300,000 mortgage so that they've only got$300 to play with in cold, hard cash, we can take it and put the money to work and we'll take the debt. Now you'll only get the percentage on the cash, not the dad, but we've eliminated mortgage payment
Speaker 3:or they already sold it. It's already done. So now they have 300,000 sitting in ips was there was a small mortgage. We can, we can get rid of that too and they would just have to buy in that minimum investment, which depends on what it is. But like I said, that changes all the time. So if you want to talk about it, myself or Joel, absolutely be able to talk about it. The idea behind one of the ideas is that the, the uh, the client or the exchangers not qualifying for the loan, right? So you have the sponsor this qualifying for the loan. So for the one thing is they have to be accredited investor typically. So they have to have a net worth of a million dollars or more. So if they do, they should be finding actually during that situation, probably a great option for the parking lot's not necessarily net leased. So net lease would be something that you don't really have to manage parking lot. You've got to have like a parking lot attendant, you or you have to have a machine that, that uh, you know, collects money and so you'd have to go there and collect money from the machine make it's working, but it's pretty close. It's pretty close. We are. We actually have a real estate investment trust that is nothing but parking lots to qualify on a 10, 31, but don't the parking lot. Yeah. So it's income, property or real estate. She goes rendered for the test. Very cool. Gentlemen, will you be able to be around afterwards for questions? Also, if you didn't get a packet and you want a packet of information, make sure you, you see us a couple more pieces of information. Who and you guys are good. You can hang out and stay up or walk in and see if we have another hand. It comes out. Who has heard of a revokable transfer on death deed, even a revokable transfer on death deed are, um, if you hear about this run for the hills. No, but seriously, in all seriousness, it's a very challenging deed that we're encountering more and more right now in transactions. If you come across one and you're going through lists of property where one has been used, please don't tell your clients are going gonna close in 14 days or less. Is it possible? Yes. Is it likely? I'm not a big negative kind of person. Just not a big fan of letting people down. I like to, um, when I got into college, I worked for enterprise rent a car and they always said, hey, you got to under promise and over deliver a like to promise strong. But I like to be able to deliver. And when I say so, it is a challenging. Did you see this team was created as a need to be able to say, hey, not everybody can afford a trust. Not Everybody can afford an attorney to do this. Not everybody wants to use writers. Survivorship as an option, so transactions don't run the same exact way. When this comes into play, call me. Ask questions when you see this come up because what it does is turns out to the investigators and we have to ask for things that we would not normally ask for work in a traditional transaction. Also, we have to make sure that this deed is not fraudulent. You see with transfer identity after someone's death, it's supposed to transfer to the person that this tells us to and we may not have helped prepare that deed with maybe an attorney did and will vouch for it, but then in addition, if someone has passed, they might have Medicare and medical bills in depths and things that were still owed. Things that may not have otherwise, but now as part of this probate code, we have to do the investigative work to make sure all things have been taken care of before we clubs. So know that it presents a huge hurdle. Yes sir. It's revokable until the time of death. Revocable transfer on death deed. It's revokable up until the time that the person on the deed perhaps is. I think it was[inaudible] 39. I do have a blog post up from our last class. I'm honored the website here with the full rundown on it as well. Um, it just came into existence. It was signed into law in 2016, took place or took effect starting January first 2017. So now we're starting to see people actually use it and it's coming up on files you see here in blue mean it is not a great document and it's open for a tremendous amount of fraud and misuse and I really am not a big fan. So if there's any way you can convince your people not to use that need and use a different form, it would be more ideal if they have no options that maybe use it as that, but make sure that every piece of supporting documentation is available to you because it guaranteed that transaction will be difficult to close a improving. Um, another thing to think about is when family members agree, it makes closing transactions very simple. If anybody disagrees any of the errors, it's going to throw a kink in your deal. I'm trying to find the article real quick. Second wire fraud wire fraud. Israel, if you're not taking it this year, maybe 1:39, so it's of those probate one that was June 21st and that's the flyer revokable transfer and that's the. So it's on team title Vi Dot Com. I can send you this as well to be. She'd be in text or email or on auditory outside. There was a hand that went up but I didn't grab it. What's the difference is if the person had a living trust, they wouldn't be using the remote transfer on death. That is the most ideal situation. No Pot kettle. I know all about this stuff but I haven't done it yet. And so that's shame on me. We know we have the resources, we have the contacts, we should be practicing what we preach on this and I have not and you can make the time. So very, very big deal. Uh, it's, it's creating a lot of challenges as, as, as it relates to that. There's a number of interviews, intricacies. Yes. We're seeing it very commonly when somebody might be dying and they're like, hey, I just need to transfer this over to somebody else. And so they'll sign and shortly before passing and so forth. Is it better than go into probate? Yes, I'm the more documentation, the more supporting documentation you can have with these needs, the better off you'll be. And make sure you tell the family members to play nice because the only one that will win if they don't, his attorneys, I guarantee it. The state will get soaked up by fees. The same thing when you've seen these items, if people don't have their best things, right? Which is why I hold up the investing chart early. Her, um, some people will come to me and say, Hey, what's the best way of holding title? Um, and many people will go back and joining tendency. And I say kind of right, because the one of the, one of the people on title passes, it will pass to the surviving owner. Now, what of your partner, not your family. You didn't want to give you your half when the person passes, that person's portion goes to that surviving person. So in that instance, it may not be the best. What happens if husband and wife are married? Husband dies. Wife gets remarried, but the other half were supposed to go to the errors and now they did it as joint tenants. Well, now the new, the new husband gets everything and maybe that was supposed to stay within the family. So again, there's not necessarily one specific time, but a vesting that's best. It's going to be what's best for that scenario. That makes sense. The cool part about my trust having addressed is that it's a legal entity that tells us what to do with the assets. Should somebody pass, right? There's no question. There's no, no, not left up to fighting and bickering with, with families because families do that when there's money in and whatnot involved, uh, at the end. Right. I won't mind on my mind and it's say crazy because families do go nuts over the stuff. So questions? Yes sir.
Speaker 7:I can add to that. We do deal a lot with trust in what we do because we're dealing with investments and quite often the family home, uh, I would read, I'd open up title holding, but from my experience, holding it in a
Speaker 5:family trust is better than nothing at all. Uh, and we see that, in my opinion, it's the best option.
Speaker 7:Okay. Were your first name?
Speaker 5:So a revocable living trust, a family trust. All same terminology. The one you've got to watch out for is irrevocable living trust. That's a tricky one. That's an outright gift. Somebody else's in control of it. So most people, if you want to hear it, has a trusted here, the chances are it's a revocable living trust, a family trust. So the, you've got the trust makers, which would be in this case, perhaps the person would use on their deathbed, they have named a successor trustee, right? So while the person is alive, they can change who that trustee is, less sort of capacity in some way, shape or form mental incapacity, or maybe they're, they're in a nursing home, whatever the case is, right? So they can change that. Once they die, it becomes irritable, workable. Now that trustees, if they view the trustee lucky you, you're in charge, it becomes a revokable. So they can't change the beneficiaries. Now they can resign as trustee if there are provisions in the trust that allows them to do so. So you say, you know, I don't want to be trustee, you're better with money, you be trusting of you can resign now he has to live up to the rules of the trust.
Speaker 7:No it does not.
Speaker 5:Um, I, the only thing I want to make sure it comes with a healthcare durable power of attorney. So doorbell is another way of saying financial. So we actually have another line of business we work with where, let's say this person who is unwell is going into nursing home 10 to$15,000 a month and where are you going to get this money from? A, we actually work with gifting, selling house, gifting it away and I'm making sure that the errors get to the assets and mom or dad is taking care of my main account, which sounds terrible, but st room difference between retail and wholesale pricing. So that's something that we have a branch in our office that specializes just in now.
Speaker 3:So I think you've had jason up here. He's a great attorney. If you've heard him speak before somebody we use all the time. So give a clap. Thank you.
Speaker 7:Well, I think when you were saying that being a white,
Speaker 3:well the good news is this, the trustees really smartly, the successor trustee, they're not taking the first one at this point. They're just fulfilling the will and the trust or the the orders of the trust will probably not the best terminology to speak on that, so they would say that they're taking their marching orders so there's nothing that can be mad at them. The people that passed would have so people have been known. That part. You mentioned power of attorney. I would also. It would be wise for me to make a mention that if there's power of attorney that is valid while they are alive for a moment, they pass. The power of attorney is no longer valid. Another thing that was mentioned was capacity. If you have anybody that's on title and they do no longer have capacity, no one in your mind that you're going to need to get doctor's letters. Typically too. Sometimes we can suffice with one, depending upon the circumstances. Anytime somebody uses the power of attorney, we need to know why. Why are they using power of attorney when in many cases it comes back to either out of the country or incapacitated. And so we just need to establish a timeline. When did the person lose capacity? And um, did they have capacity when they signed power of attorney so that way we know it's all valid. So there's a lot of complexities that goes into what we do on a daily basis. Also, I'd be remiss if I didn't mention this at least once and in any form of title training, um, I think my wife and your legs are probably interesting enough in our real estate transactions. If you are not completing your statement and the information at the beginning of a transaction and turning it in and having a clear, you are making your life more interesting. Nine Times out of 10, as Saudis come back in when signed escrow instructions come back in when you sign it. Grown instructions to come back in three to five days before closing. Reminder reading, read, read, read, read. Government liens. Take an average of seven to 10 days to get your demands in seven to 10 days. If you're supposed to close in three, do you think this is going to put us in the corner? That's 90 percent of the time or more when I get the phone call that says, Hey, Ryan, titles holding up our closing. I called the office and say, hey guys. One was the statement of information turned it in. Like last night I called back and I'm like, every time I do a class and talk about the steak in the size, so here's your reminder. If you're not going when you go on their listing appointments or taking a 10 on three, fill out your SSI, take control back of your own transaction. Let us run that information so that if there is something, we got the time to clear it up and get it taken care of before closing. Here's the thing. That's a great question. Great question. The question is can we get a prelim before going to the listing appointment? Nope. No, I'm just kidding it potentially it's piece by piece. If it's like your family member and you're like, you know, I'm going to get this listing. Absolutely. We'll figure it out. You know, let's just run it. We can do the whole deal. The thing of it is when we run a prelim and comes to us about$200 in fees on our end that we don't necessarily pass on, so if you feel very confident about what you are doing an absolutely what we'll figure it out. Typically what we are advising, especially in. It's kind of weird to say this, but coming out of the downturn like we're so far past the downturn that robots do enough notes. Getting a. We bought so much stuff through the downturn that people didn't realize that was still there and so we highly recommend if you're taking a listing or you have a listing and you would like to get ahead of it to address those items. When you take your listing to normally when you take your listing or after we will open up what we call the listing friedland and start that search so we can start identifying things that need to be taken care of. Another thing that brought an ideal is you'll typically get an email from me about 2012 to 24 hours after you open it with a premium highlights, so we want to make sure you see things that are coming in. Then once the Prelim is done, we will highlight that prelim for any action items and send it back off to you so you have a great, uh, introspective on what's going on in that property. So you'll get those two emails leading up to, to get those things resolved. Reminder, when a prelim has opened its search on real property and the real property only what affects the person's name and social doesn't come in until we get the statement of information in and both the definitely.
Speaker 1:So good question. Any other questions? All right,
Speaker 3:so there's a ton of tools guys. Every Wednesday from three to 3:45, we have a small group training that's on standby. And three, two, 3:45 every Wednesday at our office in Ontario. You're welcome to join us. The full list of classes is on our team title Guy Facebook page each and every week. And I just want to say thank you so much. None of us in this room that I'm aware of, have some big fat salary each and every day. We are all aligned to the mission in this room. And so we hope that when you sell by or refined any specify teen town guy.
Speaker 1:Thank you.
Speaker 3:The back as well. Feel free to grab them, ask as many questions as you like and hang out as long as you can as well. Oh, and if you didn't check out the view and you'd never seen it, check it out.
Speaker 1:Picture.