How to be in the Top 10% of the Real Estate Investing Market Year in and Year Out - by David Whisnant

From REI Academy

You should know that a lot of people out there in the real world have bought all the same guru real estate investing courses that you have seen advertised on TV – Carleton Sheets, Russ Whitney, and Wade Cook to name a few. They are all driving neighborhoods looking for “for sale by owner” signs, and they are all looking for classified advertisements in the Sunday paper that say: “Needy seller who owns investment property free and clear and will let it go for 50 cents on the dollar. I'll owner finance or lease/purchase to anyone. Please come today!”

Unfortunately, these real estate investing opportunities don't come along very often in the real world. Don't worry. You can run circles around 90% of the other real estate investors out there, and face little competition doing it. There are more real estate investing deals for the “top 10 percenters” to take than for the 90% of investors who rely upon the tired technique of calling sellers from classified advertisements. (I refer to the top 10 percenters as those investors who are in the top 10% of people making money through real estate investing. They are in this position because they understand how to use the public records in order to improve real estate investing decisions. Real estate investing skills such as using public records are not difficult to master. Unfortunately, real estate investing skills such as these are just not taught in any of the real estate courses I have purchased or reviewed.) I want you to become one of us and share in the real estate investing market.

I have a unique mastery of the public records. This is a real estate investing skill that can be learned easily by anyone, yet few people do it. As a real estate attorney, I received extensive training on using public records to perform my job. I trained both attorneys and non-attorneys to use the public investment property records for real estate investing purposes. The tax assessor's office, the probate court, and the record room are the key areas that you can use for real estate investing. Unfortunately, this real estate investing article does not allow me to get into the mechanics of mastering these areas of your local courthouse as my real estate investing course does, but you should be aware of what they can do for you. You should also know that I am giving you more content for free on real estate investing, which appears in Carleton Sheets' real estate investing course, which as we know is not free!

The tax assessor's office can tell you who is paying the taxes on a piece of investment property. Usually, whoever is paying the taxes is the owner. If I were interested in a piece of investment property, I could look it up at the tax assessor's office, and it would give me the owner's name and mailing address. I would then send out one of my Magnetic Marketing Letters to their tax bill mailing address and prepare to work a deal. Note that we can usually tell rentals from owner-occupied properties at the tax assessor's office. Investment property rentals will have the tax bill going to another address than the property address. The landlord wants to receive the tax information, not the tenant. The tax bill is generally mailed to the landlord's home address. Other clues to check for are exemptions. A landlord should not have a homestead exemption. Rental investment property is not eligible for homestead exemptions, thus if there isn't one, it's probably a rental. The mailing address for the tax bill is the primary tool that I use, but you can double-check by looking at exemptions.

Often the tax records will list ownership information in the following manner:

Carl Sheets c/o ABC Investment Property Management. While ABC Investment Property Management may be a company owned by Carl Sheets, it probably isn't. This probably is a real investment property management company that is handling the management of the investment property for Carl Sheets, including paying the taxes. If I mail something to Carl Sheets at the above address, it will really go to the investment property management firm, and they probably will not forward it to her. (If she sells, they will miss out on their investment property management fees.)

Most people involved in real estate investing would just mail to ABC, and if no response is received, cross it off their list. This is great for me, because this type of investment property is often easy to pick up at a steep discount. If the owner is not interested in managing the property, they probably aren't all that interested in owning any investment property either. I may be able to land a great deal with a motivated seller. Under our example, I could find Carl Sheets' real mailing address by looking for any investment property he owns where the mailing address matches the property address. This would probably be his home. Or, look in the phone book to see if you can find his name with an address. Remember, owner occupants (people who own and live in a particular house) will have tax records with the property address matching the billing address for the tax bill. Investment property rentals will have the bill going somewhere else, usually to the private house of the owner.

It might be helpful to go to the real investment property record room if we are striking out (recorders office in some states, or clerk of court.) You want to go to the area of the courthouse where the deeds are filed. You would pull the most recent deed filed for that piece of investment property to see who holds title. If the deed is into Carl Sheets, and we found no clues at the tax assessor's office, you can do one of two things:

1) Send a letter to the investment property tenants asking for help in finding the investment property owner, or send a letter to all the surrounding houses asking for their help in finding Carl Sheets. You can tell them that this is a personal matter and that you are not trying to collect money or sell her anything, or

2) call the investment property management company and see if they will give you any clues.

I will usually dig a little deeper at this point before writing or calling anyone regarding the investment property. Look at the three most recent deeds in the chain of title. This will help establish ownership of a given piece of investment property. (These are the last three deeds transferring title). For example, in January of 1985, Rusty Whitney sold to Wade Cook. In March of 1989, Wade Cook sells to Sheila Sheets, and in December of 1990, Sheila Sheets sells to Carl Sheets, who is our current investment property owner.

If the investment property was conveyed from someone who is a family member (same last name), or quit-claimed with no money being paid to purchase the investment property, or if there is an executor's deed, you may be in luck. For example, Sheila Sheets may be related to Carl Sheets, our current owner. (Recall that Sheila sold the piece of investment property to Carl in the example above.)

Write down the names of each of these family members (Sheila). Go to the county probate court and see if you can find any records involving those persons. (Look in the estates indices). If so, the court records will have an address for each heir, as each heir must be given legal notice of the proceedings. You can now mail your Magnetic Marketing Letter. If, on the other hand, you went to the record room and found that title was actually vested in someone named Sheila Sheets, not Carl Sheets as the tax records stated, there are a couple of options.

Real Estate Investing - Option Number 1:

The tax records are usually not “up to date” in that they are generally updated once a year. Carl may have in fact sold the investment property to someone else, who is the new owner on record, but the tax records still show him as the owner. Eventually, the tax records would be updated (January 1st typically) to reflect the new owner. Obviously in this situation, Carl couldn't sell the investment property to us, as he already sold to someone else.

Real Estate Investing - Option Number 2:

Carl Sheets may have recently inherited the investment property. We might suspect that Sheila Sheets was a deceased spouse or other relative. The tax records may reflect an order of the probate court, but the deed might not have been filed in the record room. Go back to the probate court and look for an estate of Sheila Sheets. This would give us a mailing address for Carl Sheets.

Note that we don't need to scour the public records for every deal we make, but it is a wonderful tool to use when you want to get past the guru course graduates, and make easier money for less time and effort. While this may sound hard, it really isn't. Two or three trips to the courthouse should make you familiar enough with how these records work to satisfy your goals. When you think of all the abandoned property in your area, rental property with absentee landlords, and other special types of property where finding the owner is not so easy, you can start to see how many deals are out there for the 10 percent club that are not out there for most people dealing with real estate investing. If the above has seemed confusing, it is only because these remarks have been reduced for space. What I hope you come away with from this article is an understanding of how the public records can be used to further your real estate investing career. In addition, the public records can show us how long people have owned investment property, what liens are against them, what they paid for the property, and give us great insight into their general financial condition. Is this valuable? Would this help you strike the best deal you can? You bet!