Hey, so glad you guys are here. Again, real
estate … not a big deal. How many of you are excited about getting into the career
of real estate? Very very excited? What’s so exciting about it? What’s so exciting about
it for you? The money! What about the money? What would you do with
the money if we were to hand you a whole bunch of money?
I’d invest it. Oh gosh! What’s the first thing you would
buy? What do you got? I’d buy a house.
You’d buy a house? Listen, real estate, oh my gosh … it changed the world for me. It
changed my life. Real quick, real quick, I used to be a school teacher … some of you
know this, right? Making 28G’s a year … $28,000 a year and I was cool with that. I was okay
with that. I was raising my three boys on $28,000 a year. And then I got into real estate.
Talk about the money? I had no idea until it was handed to me how much money you could
make in this business. I had no idea. Close one deal here, close one deal there. You get
excited. You taste victory … and what happens when you taste victory?
You want more. You want more and you want more. Before you
know it you’re making … and some of the deals … I was making more money on one deal
… than I would make a whole year as an educator. Not bad! And at the same time, as far as I
was concerned, I was still teaching. Who was I teaching in the real estate business? Who
was I still teaching The clients.
My clients! I was teaching the buyer how to buy and I was teaching the seller how to what?
Sell! So in a sense, you guys, once you get your license you’re not only going to be an
agent. You’re going to be … believe it or not …you just don’t know it, I’m telling
you now. You’re going to be an educator, you’re going to be a counselor … you know that,
right? You know how many hugs you’re going to give them? I hope we got huggers in here.
You’re going to have to hug your clients who are going to need it badly. You’re going to
be a friend. Some of these people are going to be your friends for a lifetime. You’re
going to be all kinds of things to these people. They need you. And at the end of the day,
at the end of the day … after 30-45 days, which is the typical time for a what?
Escrow. For an escrow … after an escrow is closed and it’s recorded. Recorded … is
that a good word or a bad word? Good word.
It’s a damn good word! Now once it’s recorded. After you’ve done all you can for your clients.
They’re going to say, okay the commissions are in … here you go, here’s your check.
And all you did … you were good to people. You hustled and bustled and you do your thing
as a real estate agent. Can you guys handle that? No seriously, can you handle that? Along
with this comes money. It comes a career. It comes money … it comes trips and all
the stuff you want to do with the money. Ladies and gentlemen, are you sure you want to do
this? Are you sure you want to do this? Yep!
Let’s get started. I’m going to show you how this stuff works. Let’s do this! For some
of you this is a review. Take a look up here. You should have gotten an online message thing
… welcome to the program. Did you get that? Good, you should have got an online saying
welcome to the program. This will provide you to access to all of your online quizzes
and exams. Have some of you taken your exams yet? How did you do? Good, all that’s online.
Do it at home. Good luck to you. I’m sure you’ll be fine. Upon passing your three online
exams at home, you’re going to be getting your three what? Certificates … with those
three certificates right through that door there is the BRE … BRE stands for? Bureau
of Real Estate. They’re the ones who give you the exam. Right in there they’re having
a big party and you’re invited only if you have what? [Those three certificates. They’re
in there. They’re cranking the music up loud and you’re invited if you have those three
certificates. Here with this training … I’m going to show
you how to dance. We’re going to cha-cha. We’re going to disco. What else do you want
to dance? What else do you want to learn? Mango? I thought that was a fruit. Did you
say mango? Tango … you mean tango? Flamenco.
Oh flamenco, I thought you said mango. Flamenco … all that stuff. In other words, you’re
going to be pretty close to an expert as far as understanding the concept of real estate.
Got it? Nice and easy. Oh flamenco, I thought you said mango. Flamenco
… all that stuff. In other words, you’re going to be pretty close to an expert as far
as understanding the concept of real estate. Got it? Nice and easy.
This is where you’re going to get with the program as far as the training is concerned.
As far as the state is concerned you gotta pass three exams. No ifs ands or buts. The
state says you have to pass … practice … you got it? You have to pass what? Practice. No
ifs ands or buts the state says you must pass principals. You have to pass what? Principals.
No ifs ands or buts. The third one you have to pass is … anybody? An elective … an
elective. And there’s a whole bunch of electives. The electives that we have chosen for you
… well I have chosen for you because I have been in this business a mighty long time and
I think you would benefit from it, is finance. Now I’m not talking about finance working
and computing on numbers. I’m talking about finance getting along with a lender. Knowing
what the lender is going to do for you. Why is it important to know what the lender does?
He’s the one who gets the money for? For the buyer.
How many of you guys in this classroom right now believe you might have a buyer who wants
to buy a house right now? That’s quite a few of you. Are they going to pay cash? Probably
not. Which means we’re going to need a what? A lender. The lender is going to be the one
that’s going to help your buyer buy what? The house. Got it? This is why it’s important
to know what the lender is doing. He’s going to be on your team. He’s going to help you.
Let’s make sure we know what they’re doing. In this training session we’re going to learn
the concepts and terms of real estate nice and easy. When we get to the basic concept
in terms of real estate, ready … here it comes. Wait for it. Wait for it. When it comes
to the concepts and the terms, a five dollar bill is a five dollar bill. Say it with me
… a five dollar bill is a five dollar bill. Which means, it is what it is. Study long
… study wrong. Study long, study wrong. What does that mean? It means it is what it
is. Don’t overthink it. If I was to tell you … if I was to tell you RPA … residential
purchase agreement … just stick with me … this is just simply an example. Residential
purchase agreement. Oh my God, I’ve never heard this term before. What is it? Residential
purchase agreement. A five dollar bill is a five dollar bill. Residential purchase agreement
… what is it? It’s ann agreement. With me? It’s an agreement to do what? To purchase.
To purchase what? A residence. Boom, we call that an offer. See how easy that was? A five
dollar bill. Oh, you like that, huh? A five dollar bill is a five dollar bill.
Let’s try another one. How about a residential listing agreement? What is it? It’s an agreement.
To do what? To list. To list what? A residence. Are we going to represent a buyer or seller
with that? A seller. We’re going to list his property. When you get to the concepts, every
time we come up to a concept or a term, I want you to remember. A five dollar bill is
a five dollar bill. It ain’t 499 … it’s not 501. Study long, study wrong. Study long,
study wrong means don’t overthink it. It doesn’t mean go home and don’t study. Study like crazy.
It means don’t overthink it. All right? Nice and easy. We’re going to talk
about real estate experiences and the advice that I’m going to give you after 20 years
in the business … your typical labor day agent activities … this is important right
here … typical every day activities. How many of you want to make it big in this business?
I mean like really want to make it happen? Ready? Here it comes.
I’m going to give this gift to you right on this platter. It’s called RAD … R A D. Think
RAD, remember that? Some of you? Think RAD! R … what does R stand for? Reasonable. Think
reasonable. What does A stand for? Active! Stay active. There’s three ways to make money
in this business. Three ways … you need to wait for it … you could buy it, which
is market yourself … it’s going to cost you tons of money … and most of us that
just get started have a budget. We don’t have too much money. So you could wait for it,
you could buy it or you could go get it. You got it? Three ways to make business. We’ve
got R which is reasonable. We’ve got A which is what? Active. And we have D … what’s
D? Delegate. I want you to delegate. Which means I want you to get help when it comes
to a deal. Meaning when you’ve got something in escrow, don’t try to do it yourself. You’re
going to have a heart attack. There’s people that can help you. Who’s going to help you?
TEN … T E N … ten. Who’s T? Title. Who’s E? Escrow. Who’s N? NHD company. Simple as
that. You want to make it in this business? How
many of you want to make it in this business? I want you to thin RAD. When there’s a problem,
when there’s a challenging situation, you don’t freak out … you just don’t. You think
reasonable. We fix it. And of course we are going to go over some contracts and some disclosures
which are very very important when it comes to a deal.
All right, let’s get this party started. You guys sure you want to do this? Cause once
I get to the next one, this is it. You guys ready? You’re going to get addicted to this
stuff. I’m not kidding. I got addicted to real estate. I mean you really do. It gets
fun, it gets challenging, it gets exciting. You guys ready? Let’s do this.
All right, let’s get started. Here we go. Look at the very top there. Buyers. What do
buyers want to buy? Look at me, what do buyers want to buy? A house. From now on when I point
to this door, who is over here? When I point to this ugly door I want you to say buyer.
Who’s over here? Buyer. When I point back there to that beautiful opening back there,
we’re going to give that to the who? Seller. Back there?
Seller. Back there?
Seller. Over here?
Buyer. Your job is to put these two people together.
You’re the real estate agent. You’re going to put these two people together. What does
the buyer want to buy? What does the seller want to sell? What does he want for his money?
What does he want for his house? Money.
Money. You’re job is to put these people together. Now once we put them together, we are in a
legal and binding contract. You did this. You as an agent put these people together.
We’re now in a legal and binding contract. We have to have a company babysit this thing.
Take care of it … make sure every stipulation that contract is executed. We have to have
somebody to do this. Let’s give it to the person here, dead center. From now on when
I point to this dead center table I want you to tell me it is … escrow. You got it? So
far so good? Nice and easy. Escrow will handle all the paperwork. Escrows job … ready?
It’s to protect … it’s been created. You created this. You created a deal. There job
is to protect the integrity of the transaction. A neutral third party that protects the integrity
of the transaction. A neutral third party that protects the integrity of the transaction.
Are you with me? You’re going to see some definitions that
are this long. I’ve shortened it down for you. With me …a neutral third party that
protects the integrity of the transaction. Boom! And then we have somebody over here.
Who’s over here? Lender. From now on when I point over here we have the lender. Lender
helps out who? Seller or buyer? Buyer.
Lender helps out who … seller or buyer? Buyer.
Are you sure? Yes.
Good. Lender says, hey buyer, you want to buy a house? Buyer says, of course I do. Come
on over to my office. He invites him over to his office right here. Have a seat … would
you like a cup of coffee? Yeah, I’d like some coffee. Cream and sugar? Absolutely. Cream
and sugar … we get to talk to each other. The lender … communication. That cup of
coffee is important. It gives you about five ten minutes to get to know each other. A cup
of coffee is nice. Anybody here like coffee? No one likes coffee in here? I love coffee.
Yeah. Yeah, use it. Five ten minutes to know somebody. Communication. Who’s over there?
Over here? Big time important communication here. Seller wants to sell his house for some
money. Real estate agents … you guys put these two people together. Escrow company
is a neutral third party that protects the integrity of the transaction. Lender is over
here. He helps the buyer out. Last but not least, look at the bottom there.
That’s a good one. Look at the bottom there. Prospecting. That’s the name of the game.
We talk about RAD. R A D … What was A? Active. Which means you gotta go out and find people
who want to buy or sell a house. You with me? If you know the contract’s upside down
… backwards and all that stuff. You’re going to be a good contract knower. Is that even
word? You’re going to be a pro at contracts. But without any clients. Without prospecting,
you aren’t going to make what? Any money. You’ll be a professional contract person.
The whole idea is to get prospects. To get prospects … and what’s the third one? To
get prospects. You got it? That’s the name of the game. It really is. Without prospects,
there’s no business for you. All right, here we go. That’s just the introduction.
You guys good? Any questions on this? You sure you want to go on? Here we go. Now it’s
going to get official. All right, let’s do this. I’m glad you guys are here. You guys
excited about this? Good. Let’s go! Here we go! Up top here, general financial
terms. This whole session … this whole module for the next three weeks is going to be focused
over here. Who’s over here? Lender. Lender is big time important. We’re going to find
out what happens over here. What goes on over here. But let’s start off with general terms.
Up here … currency … you gotta know what currency is, right? A countries official unit
of monetary exchange. Nice and easy. Interest, what is interest? What you charge somebody
to borrow money. You want to borrow money, it’s going to cost you. Who’s over here again?
Who’s over here? Lender. Hey buyer, how are you doing? You want to borrow some money?
What, you want to buy a house for a million bucks? Fantastic! Come on over and do the
application and guess what? You are approved. Gonna have to charge you interest. We’re going
to lend you the million bucks but I’m going to have to charge you. Anybody know what the
interest rate is today? Is it? 3.5? Something like that. It’s been pretty darn low. Huh?
Compared to 20 years ago. Oh my gosh. 3.5 is pretty darn good. Yeah, that’s good.
Primary mortgage market … back over here. Who’s over here? Lender. Well lenders sit
you down and they’ve offered you a cup of coffee and you guys can talk. And you guys
can compliment each other … hey nice tie by the way … how’s the wife and kids? This
is called the primary mortgage market. What’s the key word there? Primary. What’s the key
word there? Primary. What’s the key word there? Primary. Which means the first. Client’s the
first on our list. We’re going to take care of him. Primary mortgage market, right here.
Are you guys as realtors involved in the primary mortgage market? [Are you sure? Positive?
Good! If you’re positive, say yes. Is that primary mortgage market, yes or no? Are you
involved in it? Yes! Because you’re going to take your buyer … hey want to buy a house?
Yeah, Rico, I’ve been dying to buy a house! Here, let me introduce you to my lender. And
you’ll walk them over to the lender. Hey, I’d like to introduce you to my buyer. He’s
interested in buying a house. Can you please research to see if he qualifies for a home?
Primary mortgage market on the surface. This is definitely important to you. Are you kidding
me? Where are your commission checks going to
come from? Let’s break this down … where are your commission checks going to come from?
From closing a what? A deal. You put the buyer in the deal. The buyer gets approved by the
lender. Lender gives him the money. He goes and finds a house. He pays the seller off.
Deal is over. It starts with this guy over there. You get that? It starts right there.
Does everybody get qualified for a loan? Does everybody get approved for a loan? No. How
many of you here have boughten a house? Did you get qualified … did you get approved
a house? How’d that go? How was that experience? Over there, what was it? Was it? Why? She
says it was stressful. They need a lot of paperwork.
They sure as heck do. How much were they lending you? Don’t answer … I was just kidding.
But when they lend you money … isn’t it important that you really really qualify for
the loan? I mean they really want to get paid back. Isn’t that reasonable to ask for all
that paperwork? Of course it is … course it is. They do a lot of stuff over there.
We’re going to get to see all that. All right … debt. Debt, of course, a dollar
amount that is borrowed from the bank and what you owe back … secured debt. Bank’s
over here … lender’s over here. They say okay we’re going to lend you the million bucks
but it’s going to be our secured debt. The house is going to be our secured debt. If
you don’t pay back, what happens? We get the house. We want the house back. Does that sound
reasonable to you? Of course it does. Last but not least, equity. I want you to
think of the word equity. How many of you have heard of the word equity? What do you
think? Is it a good word or a bad word? Is it really? What does it mean? Talk to me.
What does it mean? What do you think it means? Huh? It means value. How many of you here
who said you have boughten a house believe you might have equity? Are you happy about
that? You have tons of equity? A little bit of equity? But you’re not upside down? Equity’s
a good thing. Equity is a darn good thing. Are you kidding me? Many of us have sold houses
and we’ve cashed out. What did we cash out? Our equity. Many of us have taken loans on
our house using our what? Equity. Equity is a good thing.
All right. I want to introduce you to the buyer’s triangle. I created this about 10
years ago and it makes sense. I love this diagram here cause it’s simple and it’s self
explanatory. I used to have a buyer once … and the buyer
over here, was not getting the documents like you were explaining. My buyer was not getting
his documents over to the lender. And when the buyer is not getting his paper work over
to the lender, how does that make the lender feel? How does the lender feel? It pisses
him off! It ticks him off! He says, hey buyer send me this. Hey, buyer send me that … and
he’s not sending it to him? How is the lender going to feel? He’s going to feel very very
upset. Because all the lender is trying to do is help who? The buyer. I’m trying to help
you get your house and you’re not giving me what we need to close this deal.
My buyer wasn’t doing that. He wasn’t communicating with our lender. The big guy on our team.
So I had a meeting with my buyer. I sat him down in one of our conference rooms and I
say hey, listen, we gotta talk here. I got a call from our lender who said you’re not
giving him what he needs as far as paper work is concerned. I said, what are you doing?
Do you want the house? And he said, of course I want the house. I said, then why aren’t
you handing over the paper work? He said, well I’ve just been busy … this and that.
I said listen, this is the way it’s going to work. And I grabbed a sheet of paper and
I grabbed a marker and I drew a triangle. I said, in this whole dynamic of buying a
house, there’s three people involved here. These three people want you to win. At one
point of the triangle was the buyer … anther point was the who?The lender and the other
point was the who? The realtor. These are the three dynamics … that are going to help
you buy the house and get it done so I can hand you the keys. So anytime the lender contacts
you, you need to communicate with them and give them everything he wants. Are you guys
with me? Well in this case, the lender wasn’t getting
it so the lender did what? He called who? He called me. See this here? He said hey realtor,
how you doing? Hey, I need some help man, I’m not getting anything from this guy up
here. I said, you got it. What did I do? I had a meeting with this guy and said, what’s
going on here, man? We’ve got to get this thing wrapped up. Do you not want the house?
He said, of course I do. I said, then start getting your stuff over to the lender. The
buyer finally got it. I don’t know what it was … was it a visual? I don’t know. He
got it and then he started getting better at getting his paper work over there. Do you
think this was helpful? It was. Just to understand how important it is. These are the main characters
when it comes to buying the house. What’s the most important part of this triangle?
Communication. What’s the most important part of this triangle? Communication. What’s the
most important part of this triangle? Communication. Now when it comes to the deal, take a look
over here. There’s going to be all kinds of people involved in the deal. The lender, the
underwriter … some of these are new terms for you … don’t worry about it. When it
comes to the lender, over there he’s going to have an underwriter in his department,
he’s going to have appraisers over there … don’t worry about it. Just there’s a lot of people
involved. Escrow … escrow is going to be involved over here. These people are going
to be involved in the deal. You’re going to have seller disclosures. The seller is going
to be involved giving us paper work. We’re going to have escrow involved, title involved,
NHD. We’re going to have all these people involved in the deal. But of all these people
involved, which relationship is the most important? [The one with the triangle. Without that triangle
being intact, all those other one’s that I just mentioned, mean nothing. Get it? Without
that triangle … if that triangle is broken, the deal goes south. If the deal goes south,
what happens to these people here? Everybody goes home … with empty pockets. Do we want
to go home with empty pockets? Of course not. These people here, and some are depending
on you guys to keep this together. You got it? They’re depending on you to keep this
together. Because if this breaks apart, it falls and it shatters, no mas. It’s over.
And how did you not keep this together? And they’re going to blame you. They say, dog-gon-nit!
It’s as simple as communication. All right, let’s go! The nature of real estate.
Real estate is really cool. Real estate … the good thing about real estate is people get
involved in real estate. Buyers buy real estate for two reasons. Typically for two reasons
… number one, to make money. You guys get that, right? How many of you here are investors?
Have you ever boughten a house just to invest and you rent it out? How’s that going for
you? Good. Renters are paying their rent? Beautiful. Anybody else? How’s it going? Good?
Renters are paying their rent? Anybody here have renters who don’t pay their rent? I did.
(laughs) Yeah.Yeah, that sucks doesn’t it? Yeah, yeah. And so it happens, you find somebody
else. Yeah I had that too but it’s good when it’s being rented and it’s happening … it’s
cashflow which is good. So we do it for money. Whether it’s investing or you sit in it and
you live in it and you grow in it and your kids grow up in it. And after 10-15 years,
you make tons of money. That’s good. But the other reason we do it, aside from
profit when you sell it, is the bundle of rights. Now, what’s the bundle of rights?
It’s not the bill of rights. It’s the bundle of rights. The bundle of rights. We do it
for the money and we do it for the right to do what we want to do on that house. You got
it? What do we call that? The UPTEE. I want you to call it the bundle of rights. So we
do it for the money and we do it for the bundle of rights which is called UPTEE. UPTEE. The
U stands for use it. You have the right to use it. I bought this house here. This is
my house. Fantastic! If I make money with equity in 10 years from now, I get to keep
the whole equity. I also have the right to the the UPTEE, which is the bundle of rights,
as long as I live here. U is use it. I have the right to use it how I want, how I wish,
as long as I’m not breaking the law. You get it? Can I grow a big ole marijuana plant in
there? Course not. Well, maybe soon, huh? Isn’t it going to be legal soon? (laughs)
I’m just kidding. All right, so, you have the right to use it … long as it’s nothing
illegal. P … you have the right to possess it. Which
means you have the right to live in it and if there’s somebody in there you don’t like
… and they’re not owner, you have the right to kick them out. You got it? What’s U? WHat’s
P? Possess. You have the right to T, transfer it. The owner of this house has the right
to give it away if he wants to. He has the right to sell it. They have the right to will
I. They have the right to transfer it. We have use, possess and what’s the T? Transfer.
And then we have the right to E and cumber. Does that sound like good word or bad word?
In this case, it’s a good word. We have the right to borrow against the property. You
get that right? We have the right to … this is my house here. And you know what? I got
about $500,000 in equity which is good. I bought it for a million bucks. It’s now worth
$1.5. Is that a good thing or a bad thing? It’s a fantastic thing.
You know what, I think I’m going to put a pool in the backyard. I’m going to go over
to the bank, any bank you want, and I’m going to see if I can get a home equity line of
credit. Or a home loan for $50 thousand bucks so that I can put a pool in my back yard.
Anybody ever do something like that? Nobody’s ever done something like pull out equity of
your house? I did. I put a pool in my backyard once. It was easy. Had the equity … I was
able to encumber it. Got a loan on my house, sat around with it. As long as I make the
payments back, not a big deal. Last, but not least you have the right to
enjoy it. Ladies and gentlemen, we call all this, what? UPTEE up top. What is it? A bundle
of rights. You have the right to get he equity and you have the bundle of rights. Does this
all making sense to you? So far, so good? So far so good. Nice and easy. Nice and easy.
All right, good. Type of estates … stick with me … stick with me … type of estates.
We’re good? We’re good? Type of estates. There’s two types of estates that I want you to know.
An estate simply means … you can look up there … an estate is an ownership, interest,
or claim a person has in real property. Simple as that. This is the estate here. This is
my estate. Now we think of the word estate and what do we think? We think big giant,
massive … it doesn’t have to be. An estate simply means you own the house. That’s your
estate. It can be a small one, it can be a huge one. It’s your estate. This is your estate.
When you own it … ready, here it goes … a five dollar bill is what? A five dollar bill.
Study long, study wrong. Freehold estate is the first one I want you
to know. Freehold estate. Look at the word freehold. How do you hold it? Freely. And
when you hold something freely, do you have the ability to do whatever you want with it?
Can you paint the walls black? Sure. Can you break the windows if you want? Sure. Can you
have carpet that’s … I don’t know … what color is funky carpet? Can you have green
carpet? Hope nobody here has green carpet. I didn’t mean to- Yeah. Sure, you can have
any color you want. It’s your house. You hold it how? [ Freely. Which means you are the
holder of a freehold estate. Does that make sense? Simple. Somebody has complete maximum
ownership of a house. Freehold estate. I can paint the walls black, I can have green carpet
… what else would be weird? I could have the back yard all dirt if I want. Whatever
you want. That would be funky but you know, you do what you want with your estate.
The next one I want you to know … wait for it … is less than freehold estate. Less
than freehold estate. Which means you don’t hold it how? Freely. You don’t have 100 percent
complete ownership of the place. You just don’t. This is what we call renters. This
is what we call renters. How many of you here are renting? You are holding that estate as
less than freehold estate. How many of you here are owning? Whenever you own, you’re
holding your estate how? Freehold. Not free, we’re all free. It’s the USA. You’re holding
it how? Freehold estate. If you’re renting you are holding it how? [Less than freehold
estate. Now, this is the question, ready … here
goes a trick question. I’m throwing it out there. Here’s a question. I’m throwing it
out there to you guys. Freehold estate, bill of rights, yes or no?Are you sure? Think about
it. Freehold estates … bill of rights, yes or no? You sure? What did I say, bill of rights?
Oh God! That was the trick question. Yeah, yeah. I had that planned all the time. Yeah.
Freehold estate … bundle of rights? You sure? Positive? Are you sure? Last chance
… are you sure? Good … yes, I wanted to keep going down! Yes, yes, yes!
Less than freehold estate. Bundle of rights? Are you sure? Partial? Let’s go, lets do this.
How many of you are renting? Those of you who are renting. Do you have the right to
use it? Yes. Do you have the right to possess it? Which means you can keep people that you
don’t want out, right? How many of you who are renting, have the right to transfer it?
Oh. Well that’s not transfer. Transfer title. Yeah, title. Yeah, yeah. So you can’t do that.
How many of you who are renting have the right to encumber it? You understand? You understand?
You’re looking at me like, uh. Yes? How many of you who are renting have the right to enjoy
it? Yes. Do you have all the rights to UPTEE? Do you have all the rights to the bundle of
rights? How about the bill of rights? [ Yes, we’re all Americans, (laughs) Yeah. So, understand
that … freehold estate … how do you hold it? Freely. You get all of the bundle of rights.
Less than freehold estate … Partial bundle of rights. Less than freehold estates … do
you get the benefit from the equity? But you live in it … you’re taking care of it. Why
not? Because you don’t own it. You’re in a sense borrowing it. For what? For money … in
exchange for money. I want to borrow your house for exchange of money. All right, good.
You guys are getting it so far? Fantastic. Real estate cycles … aw this stuff gets
good. Real estate cycles off … since the late 60’s early 70’s, the real estate world
has always had cycles. Which means it goes up and down, up and down, up and down, but
in the long run … from the early 1960’s, 1970’s it started down here. In the long run
… it ends up up here. You guys understand that, right? Starts here, ends up here. Now
in between here, you’re going to have what we call your peaks. Is peak high or low? High.
Because a five dollar bill is what? A five dollar bill. Peaks are high … and we’re
going to have your troughs. Troughs … high or low? Low. So you’re going to have these
in between. But at the end of the day, the best investors in the world say, that the
most certain investment in the world is real estate … in the long run.
How many of you here have had your property’s more than 20 years? Anybody have a property
here more than 20 years? Nobody’s had a property more than 20 years? More than 15 years? How
did it go for you, as far as when you bought it to what it is now? It’s doing okay?
We’ll go to an example of my parents house. My parents house is not far from here, it’s
in Culver City. They bought it back in 1974. They still own it today and actually still
live in it today. That’s a heck of a run. That’s 42 years. Can you imagine someone living
in the same house for 42 years? Oh my God. I’d go nuts. 42 years … same walls, same
everything. When it comes to the equity … here goes
… they bought it for $25,000 bucks. Yeah. 1974 … $25,000 bucks. In the long run … it’s
pushing $900,000 to a million bucks now. They owe zilch-o on it. You tell me, was that a
good investment? Uh, yeah. Yeah, I’d say so. $900,000 of pure equity. How would you like
to have $900,000. Now mind you, in between there, there was a few scares. There was a
few scares. What happened in the mid 2000’s? 2005-ish, 2006-ish … what happened? Crash.
Remember the crash? So, sure instead of being worth 900,000 it dropped to $700,000. It’s
still a lot of money. Still a lot of money, right? But that did happen to a lot of people
and it scared the hell out of everybody. If you own a house, it scared the hell out of
you. It scared the hell out of me. We have your expansion and contraction. Expansion
… is that a good word or a bad word? Expansion sounds like a good word. Expansion … sure,
it’s when the economy is booming. Contraction … does that sound like a good word or a
bad word? Contraction means hold back right? It’s a recession, right? We didn’t want to
call it a depression back in 2007-2008, right? No, don’t call it a depression, don’t call
it a depression … that sounds much too bad! Let’s call it something real pretty … what
do we call it? A recession … let’s call it a recession. All right, we’ll take that.
Expansion is an increase, contraction is a slow down. And we talked about peaks and troughs.
Take a look at this one here. This is typically how a real estate cycle works. We have the
recovery over here … then it has the expansion … the way we just discussed it … comes
all the way up until it reached the very top. What do we call the very top? Peak. Dog-gon-it,
but look what happens after the peak. What happens after the peak? We have over supplying
and then it starts to drop. And when it drops big time during the recession … remember
this? 2007 … how many of you were affected 2007-2008? Were you? Yeah, me too. Sorry to
bring that back up to you … let those memories go. Sorry … get it out of your brain.
Then the recession hits, aw what a bummer. But that’s typically … I want you to look
at this … that’s typically how it works … When it comes to houses and the value
houses. A lot of you guys here who own property’s actually went through a whole thing just like
this. A lot of you guys have property’s that were way up here … and you guys rode the
wave. You bought them way up here, 2007 came around and it dropped all the way down to
here. Am I bringing back bad memories? Sorry, but I have to teach the class. Right? So I
came down here, right? But if you held on to it, you experienced this finally. You experienced
this finally! How many of you held on to it? Ah, good … because the majority of the people
didn’t. The majority of the people did what? They got foreclosed on … or got rid of it.
They were saying this economy is killing me. I can’t sleep at night. But luckily some of
you really really loved your houses and you held on to them and you rode the wave. And
you rode the wave. And you rode the wave. Now I ask you right now … where do you think
we are now when it comes to the housing industry … as far as this … where? Somebody says
we’re in pink. What do you guys got? Where do you guys think we are? How many of you
believe we’re at the recovery? In here, how many believe we’re in expansion? Huh? Which
one? Light green … this one? Somebody said mint green? Anybody think we’re here? eah,
you think we’re here? Those of you who think we’re in the … bright green give me your
reason. Why do you think we’re in the bright green? What do you got? What do you think?
This is no right or wrong answer elections coming … all right … you gotta bring that
up. Elections are coming, okay? Anybody else? Say it again. Low inventory? That’s a good
idea. That’s not a bad factor. How many of you believe we’re in this one?
Those of you who believe we’re in this middle green … you’re telling me that you think
there is still going to be time for it to go up even more? Really? I don’t know … what
do you think? You’re making a face like I’m nuts. What do you think? You think we’re over
on this side? [ so you think … Do you think we reached the peak yet? Hold on, hold on
… I want to get her opinion as a realtor … an independent contractor. I’m going to
have a question over here where I’m a buyer … and who’s over here? Buyer. I’m going
to want to buy a house with you and and I’m going to say, hey, do you think I should wait
or you think we’re at the top. What do you think? You think I should wait? These are
the kind of questions you’re gonna get. And all you gotta do is … what, what, what …. talk
to me. She thinks we already hit the peak. She thinks we’re past here … now we’re on
this side here. Anybody else, anybody else? What do you got
back there? Yeah, interest rates are low right now so where do you think we are on this … don’t
change the subject … where do you think we are here? Right here? I think I agree.
Right here? I think … this one here? Oh, this line here? Got it, got it, got it! Oh
I see … you think we’re going from one to two? Right here? You think it’s one more over?
How many believe we’re on this side? No? No, you’re right. I personally believe we’re right
in here. I’m a bit hesitant as to what’s going to happen in the next couple of years. You’re
right. I think it depends on where you live as well.
Or what state you’re in. California.
No, I know … but where in California … I mean … not state.
What county? Yeah.
We’ll talk … how about LA county? Los Angeles County. It’s always pretty hot … meaning
the market’s always pretty good. Right? Well, per the statistics … and I’m going to show
you the statistics coming up right now. After I show you the statistics, you tell me if
your mind has changed as far as, is it still going up or is it going down? You guys ready
for this? You understand this concept? Good. I have a question.
Yes, question. Will you talk about factors of oversupply?
Absolutely … yeah. Factors of oversupply. When the housing industry is oversupplied
with houses. Is that a good thing or bad thing? It depends on … for who? Right. Is it a
buyers market or sellers market? Buyers market. Oversupply means it’s a buyers market. Is
it a great time for investor to get involved? Absolutely! That’s what happened in 2007,
2008, 2009 … so many foreclosures out there. The investors were eating these up! They were
buying them by the dozen. I mean it. I had one investor that was doing it with me. I
was representing him. He was buying 10 houses … hey Rico, find me one house every month.
You got it! Oversupply is fantastic for investors … because the whole idea of real estate
… ready? Real estate 101 … just stick with me … is to buy what? Low and sell high.
Oversupply happen when its very low. Oh yeah. It happens all the time.
How about when we have no supply … like now? Do we have supply now? How’s the inventory
now? Very tight. And when there’s a little bit of something … what happens to value?
How about gold? Little bit of something that’s got value? How about houses? A little bit
of something that’s got value … it goes up. This is why this is so important.
You’re absolutely right … as long as there’s not inventory or low inventory …. I’ve seen
buyers outbid each other on … I saw one buyer … couple of buyers in Westwood, they
were buying a house in Westwood … or a house was for sale in Westwood. They wanted 1.2
million dollars for the house. That was the average price … that was the median price
so 1.2 million dollars. It eventually sold … cause there were so many people wanting
this house … outbidding, outbidding, outbidding, outbidding. It finally sold for $1.5. All
they wanted was $1.2. Oh you want to give me an extra $300,000? Oh, I’ll take it! Talk
about no supply. Talk about low inventory. When there’s low inventory and all these people
want it, what happens to these people over here? They start outbidding each other. Cause
there is no supply, low inventory. Oversupply … investors love those days.
Anybody here take advantage of the oversupply? How many did you buy?
Only one. Only one. All right, how many did you buy?
This is the national … national numbers for the real estate cycle. From 1999 we’ll
call it 2000 … to 2015. From 2000 … we’ll call it the last 15 years. This is national,
this is not the California one. This is national. The median price of a house was way down here.
Went up like crazy. Went up like crazy. I remember in 2000, 2001, 2002, 2003, 2004 if
you sneezed, you made money. 2005 made money … 2006 like man, making money and then boom!
We got a sign here. We started getting signs that uh oh, what’s going on here?
Look at this piece right here like whoa, what’s going on here? It came very volatile. What’s
going on? Uh oh, that was a hint … that’s a what’s to come. And then what happened towards
the end of 2006 -2007? It’s right there … I need to say, no mas. There it is. What happened?
Now the thing is this … was it a gradual drop? Because a gradual drop would have been
kind of nice, wouldn’t it … right? It’s like when somebody’s … when you’re throwing
a party and somebody’s not going to show up, it’d be nice if they call you maybe the day
before … hey I’m not showing up, huh? But when they call you 10 minutes beforehand when
you’re expecting them … you’re kind of like, aw man. That was kind of rude. This was horrible.
We’ll call it rude … nobody told us about this. (laughs) How come they didn’t warn us?
There was no warning. There was no warning. How many of you, if you new this was going
to happen would have sold your houses? Of course. If we knew this was going to happen
… there wasn’t any inclination that this was going to happen. None at all. Check it
out. Boom! Almost overnight. I’d be home watching
TV commercials … you guys might remember this … and how many commercials were on
TV then of … companies saying, we can help you with your foreclosure. We can help you
keep your house. We can help you do this. Remember those days? All those commercials.
We can help you modify your house … don’t lose it, we can help you keep it. I felt kind
of … I actually felt pretty good cause I wasn’t the only one going through this. Isn’t
it kind of neat when someone is going through the bad stuff like you are? (laughs) You’re
like, aw, right on … I’m not the only one going through hell. Everybody else is going
through hell. It kind of makes you feel better. I’m glad you guys are having a horrible time
cause that makes me feel better. Sounds horrible but kind of did feel nice. That the whole
nation was going through this. That sure as hell was happening. There it is.
Luckily, we got over it. 2010, 2011, 2012 … here we go. Here we go. Here we go. Where
are we now? How much higher can it get? Are we going to repeat this again? How often does
this cycle happen? Eight to ten years.
You think? Who said that? Me.
Is that what you think? I think so.
That’s your opinion … she says eight to ten. Anybody else? What do you think? How
often does this cycle occur? 12 to 18.
12 to 18? Whoa, that’s a long time. Anybody else? your opinion. Anybody else? What do
you think? Some people say four to six. I don’t think so. Yeah. I’d say you’re pretty
good. I think that was about eight to ten years. The crash happened in 2007. We’re almost
at 2017 but they say the economy is doing fantastic. So, who knows.
Now, when you get these questions from your clients … who’s over there? Who’s over there?
And they’re going to look at you right in the eye and they’re going to say … so, do
you really think this is a good time for me to sell? Or your buyer is going to say, do
you really thing this is a good time for me to buy or should I wait? You gotta have an
answer. What’s going to be your answer? All right. (laughs) My recommendation is to say
this … cause you gotta say something … when you don’t want to lie … is if I had a crystal
ball I’d tell you all I know … but I don’t. Let’s go over to this guy. Who’s over here?
If he asked you, is it a great time to buy? You’re going to say … yes, it is a good
time to buy. Why? Interest rates are low. You guys know what’s going on with rent? Rents
are going up. You might as well get a house and make a mortgage payment so you can qualify
for the tax advantage. Instead of giving it away to a landlord and never seeing it again.
So is it a good time to buy? It’s always a good time to buy. Especially if interest rates
are this low. Is it a good time to sell? Sure, why? Cause
inventory is lower, it’s a seller’s market. You’ll max out on your property. Just don’t
make the mistake I did. I should have known better. Don’t make the mistake I did. What
did I do? I sold high … I sold high … and I had to go somewhere to live and I bought
high. Ugh! I sold high and bought high … didn’t do me any good. Sold high, made my money … put
all the money into a new house … so I bought high and then I experienced this with my new
house. Boom! Oh, if I would have just sold high, held on to my money … rented for about
a year and then boom, I could have probably bought a house cash. Learn from my mistakes.
I’m going to share my mistakes with you throughout the modules. Sell high, buy what? Low. Sell
high, buy what? Low! Sell high and buy what? Low! Real estate 101 again.
All right, let’s move on. I want to show this to you. This is a fantastic map with numbers
that give us an idea as to what’s going on out in these cities her in Los Angeles. Now,
these are numbers from fourth quarter 2014 to fourth quarter 2015. The latest quarter
for this 2016 aren’t out yet. These are the latest statistics. From the fourth quarter
of 2014 to the fourth quarter of 2015. Give me areas where you guys live please. Anywhere
you guys want to [Santa Monica. Santa Monica from 2014 fourth quarter to 2015 fourth quarter,
went up 16%. Is that good or bad? Not bad. That should give you some ideas as to are
we going to continue to increase or not. Any other areas you guys want to know? Cover
City … Cover city right here. Up 24% … good or bad? Anybody else?
Glendale. Glendale … it doesn’t go that far. Anybody
else? Venice? Venice … up only 7% but it’s up. Anywhere else? Mar Vista. Mar Vista … up
10%. I love this chart … or this map. It’s great numbers. Gives you an idea as to what’s
going on. Anybody else? What do you got? Where do you live? You guys live anywhere? You guys
live? Downtown LA. Let’s go over here downtown LA, we’ve got Silver lake … let’s see here.
Here it is … downtown … up 23%. Have you been to downtown LA lately? Looks nice or
what? Looks beautiful. What a change. Let’s go here … let’s go some random ones.
We’ve got here … Pacific Palisades … up 20%. Cypress Park … anybody know Cypress
Park? Up 48%. Hollywood up five. West Hollywood, anybody know West Hollywood? West Hollywood,
that’s a good one … up 25%. Bel-Aire. Anybody here … no? All right. Bel-Aire up 26%.
What’s Beverly Hills? Beverly Hills … that’s a tricky one. That’s
a good question … Beverly Hills. Beverly Hills is up 75%. 75% … but there’s a reason
for that. When you don’t have much activity in an area, the numbers can be a little deceiving.
Right? Let’s for example say, if one house sold this last year for three million dollars
and only one house sold this year for six million dollars, that would be up 100%, right?
So, it’s not enough inventory to really get a true value of what’s going on in there.
But according to the numbers … the latest numbers, up 75%. That’s a lot. Yeah. Yeah.
Yeah. Yeah. But not enough activity to really get a true … yeah, but that’s the actual
number when you put it into the computer system. Mid Los Angeles, 27%. Let’s see here … North
Inglewood up 8%. Westchester … any Westchester? 13% … up 13%. Westwood Century City … 14%.
Anywhere else you guys want to know? Let’s see here. Playa del Rey. We got it over here
somewhere. Here we go … Playa del Rey up 20%. Who’s got Playa del Rey? You own a house
in Playa del Rey? So far, so good … 20%. Marina del Rey up 96%. Same reason as Beverly
Hills. True value here … let’s see here … Brentwood, any Brentwood? 19%.
Does this remind you of 2006? It does. This is why I’m a little skeptical.
Now am I only skeptical because of 2006 … because it hit me hard in 2006 … makes me gun shy.
Makes me like … oh, I’m very very … cautious now. Mind you, in 2006 I had gotten into the
… investing business. Investing in real estate, a little too late. I got into it 2004,
2005-ish. So I bought my five investment properties. You bought three … I bought five. A little
late. So when the market did crash, I lost all five. So, because of that experience,
I’m a little skeptical as to what’s going on. I’m a little nervous as to … oh. I’m
just sharing with you guys … when do you eventually say, you know what? We may not
have hit the top yet but there’s enough profit that if I was to get out now, I’m happy. When
do you finally say, am I taking a risk by waiting more and more and more? Cause if you
wait too long, what may happen? Just like a
roller coaster … what may happen? Right. once it reaches that peak … is it worth
the risk? Keep that in mind if you guys are investors.
We’re good? All right. Now we’re going to change the channel. Real
property versus personal property. Nice and easy. You guys probably know this. Nice an
simple. Real property is land … the land it sits on … real property. The air space
above it. The minerals in the ground and the water right’s if there are any water rights
… if there’s a well or something. That’s all part of the real property. Including improvements.
Let’s assume I’m going to buy this house … the real property is the land it sits on and the
improvements. Question is this, is the house an improvement? Of course it is. So, the house
is real property. You guys understand that, right? The house is real property. Land includes
the soil and rocks that stretch to the center of the earth. Air space up to a reasonable
height. Minerals real property unless someone removes them … that’s a good one … minerals
in the ground? Real property. If I take them out and put them in a bucket, they just became
what? Personal property. Nice and simple. And then we’d have the water rights, of course.
Fixtures … I like fixtures … fixtures. You guys ever heard the work fixture? If something
is attached to a house … key word there is what? Attached. If something is attached
to a house, you just made it what? Real. If you attach something to a house, you just
made it real. Look at this thing up here. What do you call this thing again … a projector!
Is it attached? Real or personal property? Real. You get it?
What if I take that off? Take it off and I unscrew it and take it off and I place it
right here on this table? Is this still real property? Are you sure? Positive? Good. If
I take it off and put it on the table it just became what? Personal property. Good.
If I have it on the table and I put it on something it becomes what? Real property.
We call that annexation. Just know that. We call it annexation. I have something that’s
personal property and I attach it. It just became real property. Yes.
Good question! How about a refrigerator? Real or personal? Why is it personal? Cause what?
Well, it can be moved. It’s not attached. Real property is attached. Real property is
what we call immovable. You can’t move it. Can you move a refrigerator? Is it attached?
No. Trick question … are you sure? Are there some refrigerators that are attached? Built
in’s … you guys ever see a built in? Those sub zero one’s … those big massive ones?
Real or personal?Real. Here’s what I want you to do. This is why
this training session is so awesome … oh I love it. Because when you made it an offer,
who’s over here? Buyer’s over here and he says, hey Rico make an offer man. I want this
house so bad. And when you showed them the house, they walked in like whoa, wow, this
is a nice house, man. Thanks for bringing … oh I can’t wait to use this thing here.
Hey honey, honey look. They’ve got a projector. I can’t wait to get this house and we can
have movie night with popcorn and have the kids here … it’ll be so cute. They say,
I can’t wait! And then you close the deal … and they come and walk in and they say,
honey let’s have our movie night tonight. Oh my God, they gave us the key … we’re
so excited! And you go, it’s gone! But it was supposed to be there because it was what?
Real property. But just because you know it’s real property … just because this team knows
it’s real property, doesn’t mean that that team knows it’s real property.
Now, sure, the contract says that it’s real property. The contract says it’s a real … it
says it in this font, this small. But it says it’s real property. And we should all know
as realtors that it’s real property. But not all of us are as good as others. So because
that, our job is to protect who? The buyer. So, to protect the buyer, make sure he gets
that. Although we understand that it’s supposed to stay. The best thing to do is, what? When
in doubt, write it out. When in doubt, write it out. Not because you want to be right.
Because you want to make sure, what? They get what they deserve. You got it? You know
you’re right because it’s already in the contract. They may not know about it but you want to
make sure it’s there so when they have their popcorn ready … and they have their video,
whatever video they want to … Spider man or whatever they want to … or Titanic. I
love the Titanic one … or Titanic. You guys ever see Titanic? Tell me that’s not a new
movie … that’s a great movie. Yeah. You can sit down there and watch it cause you
know it’s going to be there. Because if it’s not there … who is going to be very upset?
The buyer. And who are they going to expect to replace it? You. Cause you screwed up.
Technically, you didn’t screw up. You were right. You knew … I knew it’s in the contract.
Oh I know they’re good cause it’s in the contract. Yeah, but you didn’t protect them enough.
They didn’t know so when they moved out, they took it. When in doubt, write it out. Should
they read it when you wrote it out, they signed it when you wrote it out … and there’s no
ifs ands or buts. It’s staying. That make sense to you? Protect yourself. More importantly,
protect your buyer. Huh? How would you like to walk into a house thinking
you’re going to get a built-in barbecue in the back yard and you’re going to be smelling
… taste the steak on there … and then you show up and it’s gone? I’ve seen that
happen before. He had to leave the brick there but they take away the actual grill. Oh, great,
now what am I going to do? Right? I’ve seen that happen. And guess who has to pay for
that? The realtor. The realtor feels obligated. Dog-gone-it, I should have put it in the contract.
I know it’s supposed to stay. All I had to do was simple. Was put on any lines you see
that are available. All I do is put, built-in barbecue … be specific, including the grill
to remain with the sale. Anything like that … write it down. Seller signs it … it’s
done. Play it safe. When in doubt, write it out.
All right. Take a look at this. I do want to show a video that explains how this works.
It’s a very simple video. So, once I press play … we’ll go ahead and
do that … (Video Plays)
So, now we understand the difference between real property and personal property. The stronger
it’s attached, it’s more likely that it is going to be what? Real. The stronger it’s
attached, the more likely it’s going to be, what? Real. Got it? Good.
Let’s move on. Quick test for you guys. Take a look at these. Let’s see how good you are.
Let’s go to the first one here. I want you to tell me real or personal … and I want
you to tell me why. Raise you hand, please on this one. We have here, a basketball court.
What do you got? Personal.
Are you sure? Yes.
Why? Because you can roll it away.
What’s that mean? What do mean you can roll it away? It’s
I mean movable. Its movable. Got it? It’s movable. They can
move it around, nice. Good job. Yes or no? Yes. Next one … chandelier. Anybody
… raise your hand please. What do you got? Real.
Real, why? Attached to the ceiling.
Attached. How about these chairs? Together, personal or real?
Personal. Good, sounds like we’re all in agreement.
Next one … what do you call this? A jungle gym. Real or personal? Hold on, we’ve got
an explanation over here. Somebody wants to make a point. What do you got?
Probably cemented in. She says probably cemented in.
It’s not easily moved either. It’s not easily moved either. Can we take
these apart? I’ve never had one. I have no idea.
Now, here we go. I’ve sold a many houses … okay. As a buyer, I’m the buyer’s agent and we walk
up … Oh, Rico we love this house … we’ll make an offer. Yeah, we’ll make an offer.
Oh my God, look, what’s in the back yard for the kids? It’s … is that a jungle gym? It’s
a jungle gym. I wonder if it stays with the house. What did I do? Wrote it out, right?
And luckily the seller’s were saying, hey we weren’t planning on carrying that out anyways.
Yeah, you can have it. But some of them … I’ve had one where the seller actually took this
apart. Anybody ever bought one of these? I think they’re kind of expensive. Yeah, well
they actually took it apart and took it with them. So, I would … if I were you, would
play it safe, write it out. The way I see it, it doesn’t look like it’s on cement. It
looks like it’s just there If it were me … it looks like it’s personal property cause it’s
loose and you could probably … if you’re strong enough, you could probably move it
or take it down. Make it clear. Put it in the contract.
That was a trick question. That’s a good one. How about this one here? Together, real or
personal? Good. It’s a refrigerator, personal. How about this one here … an apple tree?
[ You sure? [ Good. How about this washer and dryer? [That doesn’t sound like many of
you answered that one. You guys are unsure. Real or personal? Are you sure? Why? Somebody
tell me why? Cause you can … can you move it? Good. Cause you can move it. How about
these wind … that’s a good one. How about these window … what do you call these, shades?
Shutters. How about these window shutters? You sure? Why? Good. Cause they’re attached
… screwed in … yeah. Not just that … yes. I’ve actually had that though.
You had what? They’ve taken them and they’re fitted so … where
are they ever going to fit? Exactly! Her remark was that she actually
had this happen … were you the seller or the buyer?
No, I own the houses. You own the houses?
And I bought the house. You bought the house and you moved in and
these were gone? They took them all? Technically and by law … by contract. Anything that
is specifically made for something, specifically made for something, stays with the house.
Look at these windows here. Are these window sizes your basic average sized windows or
are these slightly different? Modified. Yeah, they’re slightly modified, so if I was to
have covers for these. Should the covers stay or go? Stay, because they were specifically
made for these windows. Those … you’re absolutely right, what are they going to do with this?
Question. So, after the property records and she goes
and finds that they’re gone. Can she go after the seller?
Seller is probably long gone. Who did you try to go after?
I didn’t. You didn’t. Who’s the first person you told?
My husband Your husband? Who did your husband call? Your
husband must have called your realtor. We didn’t do anything. We should have done,
but we didn’t. Let me explain something real quick, real
quick. I actually had a listing once back there seller … I had the seller … we were
listing the house. We were selling it. It sold … got into escrow … 30-45 days, gone.
Recorded … it was a good day. The day it recorded … I’ll never forget. I was very
happy. Ah, we’re done with this. Good. It was one of those modern houses built in 2005
or something. Went and handed the keys to the buyer’s agent.
I said buyer’s agent, here’s your key. Go ahead and give them to your buyer. It was
great doing business with you. Shook our hands. Maybe we’ll cross paths again soon. Within
half an hour she called me back frantic. I said what? This was a good day. Call me back.
She said, Rico, you’re not going to believe this. I said, what’s going on? Your sellers
took every single mini-blind in the whole house. I’m like, what? Why would they do that?
Same reason you said. Why would he take those mini-blinds? Those mini-blinds were specifically
made for that house. I couldn’t believe it. If the curtains are custom made for the house.
I mean, they are detachable, you can move them. They’re real property or personal? Are
they personal still since technically … Now, I knew that if I didn’t get those mini-blinds
back, who was going to have to pay for it? I was. So who was my first phone call to?
My seller. I said, hey you’re killing me here. What are you doing with the blinds? He said,
well I thought I could take them. I said, where are you going to use them? You’re moving
into an apartment. He was moving into an apartment. I said what’re you going to do with them?
I said listen, you have half an hour to get those things back there because by contract
they need to be back on that house. Did he take them back to the house? He sure did.
But did he hang them up? No, he left them in a big pile in the center of the living
room. But we got them back. I should have as an agent, again, learned through my mistakes.
I should have explained to who? My seller. These blinds stay with the property.
Haste makes waste. I should have taken my time and explained clearly how this works.
Never take for granted that, oh he knows what we’re doing. Oh he knows what we’re doing.
Many times they don’t. How many of you … before this session knew what escrow was? Some of
you … how many of you did not know what escrow was? Yes, we sometimes think people,
ah they’ll know escrow is. Ah, they’ll know what this is, they know what title is. We
think they do but they don’t. Be patient, take your time and explain it
No, no, they’re real. We just explained, they are real.
Oh, curtains, you’re talking about curtains? Yeah, curtains are what? No, curtains? Curtains
are personal. They’re just hanging … it’s like a towel, they’re just hanging, How about
the curtain rod? It’s fixed so it’s probably what? Real. It’s the curtain rods are real
curtains or … But it’s to say on top. Like with the fixtures
aren’t, like you know, attached but the curtain a curtain rod you can just take off, right?
Right. If it’s attached, it stays. If it’s attached … the key word here is what? Attached.
All right, next one here, how about this here? Real or personal? Real or personal? What do
you saying? Edible. Edible, yeah. Uh. Real or personal? … we
just said this was real. Well, why is this not real? Cause it’s not attached. Once you
take the fruit off of the tree, it now becomes personal. Once we take this projector off
of the wall and put it on the table, it now becomes what? Personal. You guys get that
concept? Good. Bottom line … the lesson is this … When in doubt, write it out. Please
take that with you forever and ever. And what? Ever.
Let’s keep going here. Land description here, real quick on land description. I’m not too
keen on this but I want you to know a little bit about land description. It’s a system
of describing land for new territories, states, and public lands. What they do, is this. They
get a big grid and they divide the big grid up into lines. The lines are looking like
this. These lines going this way are called the meridian lines. The lines going East to
West are called base lines. Each one of these lines … here’s the key … here’s the key,
key, the key information. Each of these lines making townships. Ready? Are six miles apart.
Six miles apart. How many miles apart? Six. Good, let’s go back again.
I want you to know these here for the rest of your real estate career. There’s going
to be so many sizes in real estate. People measure in meters, some people measure in
all kinds of different things. But I want you to know these here. These will definitely
help you with your real estate career. How many feet in a mile? 5280 feet in a mile.
The next one is one I really want you to know. 43,560 square feet is one acre. Well how the
heck are you going to remember that number? It’s going to be roughly 43 or 44,000 square
feet. Let’s go 44,000. Roughly 44,000 square feet is what? One acre. 44,000 square feet
is what? One acre. Now why is that important in a real estate career? Well, aside from
that. Why is that important in your career? Why is 44,000 square feet, one acre roughly,
important? Yeah, this is the deal that’s a good point. Who’s back there? Seller. When
y’all are representing the seller and you’re going to sell their property and you happen
to go to the title … to the title page which describes … it’s called a property profile.
Five dollar bill is what? Five dollar bill. Property profile … what is it? Profile in
the property. Got it? Tells everything about the property. Square feet of the house. Square
feet of the land Everything. When it was bought, when it was built. Everything.
Anyways, we look at it and it says there … you’re going to sell their house … and it says
there, this is 11,000 square foot lot. Is that big or is that small? Yeah, 11,000 square
feet. Now if I was to promote to you and I put it on the MLS and I put it out to the
internet cause I want to sell this house. And I want to tell the whole public about
this house, especially the land. And I tell the whole world, hey, come buy this house.
It’s 11,000 square feet. We really can’t picture 11,000 square feet. But if I was to tell the
whole world … hey, come buy this house, it’s one quarter of an acre. Which one sounds
more? Doesn’t it? Why? It’s the same thing. It’s … that’s right. Because it’s easier
to digest. We just say the word acre and it sounds what?
Big. Come buy this house on a quarter of an acre. Oh man, that’s huge! Come buy this house.
It’s 11,000 square feet. Um mm, honey is that big or is that … I don’t know. What’s the
average … I don’t know. But it’s a quarter of an acre. Oh yeah, yes, that’s big. This
is what I want you to know. Sometimes it’s better to describe your land as acreage. What
if it’s 20,000 square feet? How can we promote 20,000 square feet? Hey, it’s almost half
an acre. That sounds great! What if it’s 30,000 square feet? Hey it’s almost 3/4 of an acre.
That’s huge. I can picture that. Three quarters … oh man, if an acre is huge … three quarters
… that should be huge. So I want you to know that for sure.
And then 640 acres, just so you know. This is kind of fun. 640 acres is one square mile.
Let’s keep going here. We already talked about this. Looks like this.
East to West is baseline … just think base, base typical bottom, the base holds it. The
base of something will hold something so it doesn’t tip over. The baseline is East West
and North South is meridian. What’s East West? Who’s dead center? Who’s dead center? Over
there? Over here? Give me escrow definition please … A – neutral third party That was
horrible. Wait … ready? One, two, three … A – neutral third party that protects
the integrity of the transaction. This thing up here … personal or real? We
just talked about it. Real or personal? Put it on the table? Nice.
Curtains for specifically for this window? Specifically for this window? Real. Hey come
on, don’t get nervous on me, uh? I say curtains? Sorry. Trick question. I meant to say that.
How about the bundle of rights? What do we got? What’s U? What’s the next one? [Possess.
What’s the next one? Transfer. What’s the next one? [ Give me an example of encumber.
Take a loan out. What’s the next E? Enjoy. Good.
Here’s what it looks like when it comes to the APN number. Every lot has an ID number.
We don’t call it an ID number. Every lot has a … what does a car have? A VIN. Every car
has a VIN number. We don’t call that, we call these APN numbers. Question … what does
APN stand for? [Good … assessors parcel number. And every lot has one, just like this
one has one here. It is the confirmation … that’s the confirmation number for a property. Boom,
there it is! Oh hey, what house are you selling? I’m selling APN number 44076003.
Now, believe it or not, all right. I’m gonna … fess up. Believe it or not. There were
a couple of times, only twice. All right maybe three, where I wrote an offer. Where I wrote
an offer … and I put the address 1234 Main Street and then I put the wrong APN number.
So, it didn’t match. And escrow catches that. Escrow says, hey Rico, what are you selling?
Are you guys buying the APN number? Or are you guys buying the address? Which is it?
Cause I had them wrong. Be careful when you write your offers. Make sure that the right
APN number is with what? The right address. Cause when you have them incorrect it could
cause a bit of trouble. I don’t do that anymore though. Now, I confirm it.
Hey, so that … in a nutshell is what we start off in finance. We’ll get more into
the actual finance and with the lender coming up soon. But for now, you guys are getting
the hang of it. The reason this is important when it comes to finance is because when you
are buying property … when the lender’s giving you money … when the lender’s giving
the borrower, the buyer money to buy a house. They expect certain things to stay with that
house. You understand that, right? They expect what to stay with that house? Real property
… and this is why we need to know this.