The Science of Flipping - Secrets To Finding The Best Title Company

Episode Date: March 10, 2021

Secrets To Finding The Best Title Company

What is up, everybody? What is up? Welcome back to the Science of Flipping podcast. I am your host, Justin Colby. And on this episode, we are going to talk about the secrets of title companies. Things have changed over the last several years, and I want to give you a little heads up about how to get the best title company, the best escrow officer, and the national title company I use when I'm opening up markets. So with that said, if you have not yet subscribed to my podcast, and this is your first time randomly finding me, make sure you subscribe. I talk all things real estate investing, all the tools, processes, systems, strategies to not only help you get your first deal, but to become massively profitable and to scale your business. So hopefully you can check out all

of my podcast episodes here because they will help you specific to real estate investing. I drop a podcast a day. So let's get it. Now, as I say that, I am opening up new markets this first quarter, and we are going to be launching in Milwaukee, Wisconsin. I think I've heard it is the vacation capital of the nation. I don't know. Maybe I'm off there. but we're excited to be launching that here starting here in March as I record this podcast for you all. And it's an exciting time. Now, let's jump into the title company that I use when launching a new market is I use Clothesline Title or Escrow. They are in, I think, 48 different states. I don't remember all of them or I don't remember the exact two that they are not in. Unfortunately, I apologize about that. I should remember those two. But I would tell you these are this is the title company that I use when launching and they are in 48 out of the 50 states.

So it is closed line title or closed line escrow. And then the process works the very same. Everything is virtual, which really is helpful when you are running a virtual business. So with that being said, I would encourage you to go look them up again, Clothesline Title or Clothesline Escrow is a great company. And in fact, if you hold on one second here, I want to actually give you the exact officer I use. I'm looking it up right now on my laptop. Julie Turney. Julie Turney is who I use. They do all things virtual. Again, very, very easy to use. All the processes are the same. It's all virtual. So again, great resource for you guys there if you're opening up other markets. Now, let's just talk about, you know, finding the right escrow office if you're not doing it virtual. I tend to use Fidelity National Title. They are one of the largest beyond, you know, what I just told you guys about with the national clothesline. But Fidelity National Title is the largest that I'm aware of. And so I use them.

They are incredible. They give investor discounts. Here is the key. Finding the escrow agent who knows how to handle your investing strategies, the paperwork. So simple things to me, like an assignment, I can tell you when I'm introduced to a new escrow office because of, you know, one reason or another, uh, I have to deal with some escrow agents who don't believe assignments are legal. And by the way, they are completely legal and, or they've never actually done one. They just stick to their traditional realtor business and they don't actually, and are not actually familiar with assignments. And so all title companies are fine. Okay. I kind of think all title companies are a little bit of a racket. We pay too many fees,

et cetera, et cetera. But I don't care if you use Fidelity National Title. I don't care if you use First American Title, Chicago Title. I don't care. The key will be finding the escrow agent who understands the type of deals that you do and the paperwork that you're going to use. And once you find that person, you are going to be finding gold because they will be so streamlined in working with you. Now, when you do open up an escrow at an office that is unfamiliar with you, so let's just say you use Clothesline or Fidelity or anyone that you have not yet done a transaction with, they are going to ask you for your entity articles, right? So your LLC articles and paperwork, they're going to ask you for all of that. If you have multiple partners or another partner, they're going to need a disclosure that says, you know, one or another are able to sign on each other's behalf. And that's how my entity is set up is, you know, we can sign for one another.

And so they're going to ask you for all that simple, you just give it to them, and they're good to go. So they're always going to do that. But the key, the big secret, why I've named this the secret of title companies is you need to find the right escrow agent to handle your deals. That's what it really comes down to. It doesn't come down to the actual company. They're all basically the same. They're all kind of, you know, scams in the sense, like we just pay too many fees, but you know, they're a necessary evil and they get our transactions completed. Now, the last thing I want to bring up here. So we've reviewed, you know, the big secret, which is finding the right escrow officer. And by the way, I've interviewed and tried to work with thousands over my 14 year

career. And there are times that, you know, escrow agents are totally naive. And if they've never done an investment deal, they've just only worked with realtors. So it's like pulling teeth to try to teach them the process. Then there are times where they're an incredible resource. They're incredibly knowledgeable. They're incredibly awesome. their hurdle then becomes, you know, they get overwhelmed because every investor in the city wants to use them, right? So now their efficiency decreases. So you're going to have these things happen to you when working with escrow officers. It's okay. It happens to all of us. So you're going to have to, you know, change it up a little bit here or there. And that's just going to be part of you being in the game for as long as I have. Right. 14 years in, I've worked with thousands, probably hundreds of actual escrow officers.

But I've talked to thousands of them trying to feel out whether they were going to be a good fit or not. Right. And so now we have one that has been a good fit for the better part of two years. She is incredible. Her name two years. She is incredible. Her name is Mo. She is here. She's over at Magnus Title, as a matter of fact, even though I love using Fidelity. With that said, let me kind of give you a surprise maybe is title companies are now giving high volume investors the opportunity to partner with them and create your own title

company that they underwrite the insurance for. So they do the title insurance. Essentially, you're doing the escrow and we actually get paid. So I am a partner in a title company that partners with Magnus to underwrite the insurance, right? So title insurance is really just making sure that the title is free and clear and then that is reported accurately. So Magnus underwrites the insurance. I actually do the escrow. And at the end of the day, I get paid on every single escrow that I open with Magnus. This is new. This is very new in the last, call it two years or so, that these companies are doing that with. If you are going to ask me what companies do this, how do I get that started?

It's not a big process, but I'm not going to be able to educate you on that here on this episode. I don't know all the companies that do it. I know several of them do it. I know Fidelity National Title does not do it. But it is a very cool way to have a bolt-on business that you can actually make money on all transactions that you do. And if you have friends and colleagues that you trust, you can bring them over to your title company that is partnered with Magnus and you essentially get fees off of their escrows, right? And so very cool, very lucrative.

And it's already within your business model. So it's a perfect bolt-on business for yourself. If you're in a market, you're doing enough volume, you're a big enough player, I'd highly encourage looking into that. With that being said, guys, I hope this helps. Again, the big three points I wanted to put across, clothesline escrow agency, the fact that it's not the title company, it's always your escrow officer that's important. And lastly, escrow or title companies are now partnering with individuals like myself and many others, by the way, that created their own title entity so that basically we are selling the title, they are underwriting the insurance, and we get a piece of that fee.

So while I say title companies are kind of a racket because they charge too much, well, now I'm in the game. And I'm actually making those profits myself because it's part of my business anyways. So hopefully that finds you well. If you have not yet gone over to youtube.com forward slash Justin Colby, subscribe to my YouTube. New videos drop in daily. Go to YouTube. Look me up. Justin Colby. New videos drop in daily. I will see you guys and talk to you on the next podcast. Peace.