Real Estate Investment Options: Get Your Due Diligence In One BAG With Dickie Baldwin

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This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property. For panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We Close nodes, Scott Carson. All right, before I dive into the actual deal, I wanted to bring on one of our vendors and it's weekend so I want to bring him on first, go through some things and discuss some of the different due diligence things that he offers up that his team of experts, his team of professionals is our good buddy out of Montgomery, Texas just outside of Houston. It is our good buddy Dickie Baldwin from Baldwin Advisory Group. Dickie, are you there? This morning I saw that he's lurking right here. There he is. Good morning sunshine.

Good morning. Or you're bright and shiny.

I try to be. Coffee's not kicked in. It was a comely of error starting off this morning but that's okay.

Well, it's a beautiful day in Montgomery Texas.

You guys don't know who Dickie Baldwin is? He is the chief bottle washer at Baldwin Advisory Group. Been in the real estate note mortgage industry for 40 years. He got start well over 40 years now. He got started when he was like five years old. So that's why he's such a young dapper looking good guy. He has more hair than most people do because he's so good at what he does. You know, that's the beautiful thing about it. But you know Dickie, talk a little bit about the evolution of BAG and then we'll dive into your PowerPoint that you've provided and going through there for everybody.

Absolutely. Well first off, good morning everybody here. Went into list of visitors and fortunately some of them are in the BAG network and so I hope this will not be repetitive to them that they may pick up some more info that they may not know about because one thing that I've learned, you learn something new every single day.

Amen to that brother.

I do not care how long you've been in the industry talking about that. As Scott said, I have been in a very very long time done everything from being a realtor to a loan originator. I did for the use folks that are in the realm of mortgage. I did broker, correspondent lending, warehouse lending, put up some mortgage net branch operations across the country, did some title search industry. Been in your guys shoes as an investor and then I retired in 2018 because I had turned 70 and decided after seriously about three days of conversations with Scott, I developed Baldwin Advisory Group, better known as bag. And I kicked BAG off at a mastermind that Scott put together years ago and had questions asked me by the audience that I had no clue for because Scott and I just thought about buying a couple of days before. So with that being said, I realized that I don't care if you're a brand new investor just walking in and learning from Scott or if you're a more seasoned investor like several people are on, on this podcast. Yeah, you needed a place to go to get something done. Your time is money and if you're not confident in knowing all the different arenas, then that's why BAG is here. The whole scenario is a typical investor, and I'll call him a small investor, may do two or three due diligent deals a year. By putting everything together into one bag, it gives the brand new investor the opportunity to be playing with the big boys. And what I mean by that is I went to the vendors that I worked with throughout the years that really don't like working with a one off. They, they, they want somebody that's doing and, and this is everybody's goal, to be doing hundreds and hundreds of deals at a time. Well, by the development of Bag, you, the brand new investor or small investor are able to take advantage of what I call strength in numbers. Because I've gone to the vendors, I am the actual client with the vendors. So if I get one Scott, one deal from Scott, one deal from Laura, one deal from Bill, all those mount up to a lot of strength with a vendor. And this is what BAG has done for not only the brand new investors, but the guys that are sending me 50, 60, 70, 80 deals at a time to assist them in their due diligence. So that's the nutshell. Any comments, Scott?

No, it's just that you got some fans. Laura Miller says Dicky, welcome. Hello Dickie. He's the absolute best There you go out there. I think everybody would agree to that there for you. And that's the beautiful thing of when you started this back in 2019 or whenever it was, or 2020, it was the whole point like listen, you've got this for those that don't know, a Rolodex or a database contacts vendors and like you said, you basically help folks shop like they're, they're able to shop at Walmart where you're basically Sam's, you know, you're helping them get a little bit of a discount in bulk because you're the one ordering it and the vendors are working with you and there's no extra added fees or cost above what they would be paying individually. You just basically help them have that access. And actually I, I would say speed of completion too because when you're working with a company that's used to doing a lot of BPOs, a lot of O and Es and a lot of other things, they've got the systems that get these things delivered versus trying to go out and find it all yourself and go order it from somebody. And it takes seven days versus two days or three days out there. And then you also are very good about bird dogging your orders and making sure and follow up, making sure things are getting completed and making sure that we're happy with the vendors, that they're doing what they say they're doing too.

Right, Dickey, salute. Because I'm only as good as what the vendors are. And if I put you with a bad vendor, then I'm not helping anybody.

And the reason we had Dickie come on first here this morning, because we're going to cover a lot of different things throughout the day and I wanted to just bring it up because a lot of people, hey, I'm going to watch the first challenge and I'm a pick and choose. Well, I want to make sure that, that you had Dickey's website and contact information saved as. Cause most of the time this is how the conversation goes with Dickie and a lot of investors. Like, well, I need to pull this, but I need to talk to you. Just call bag. Well, I need to pull this. Who? I didn't order this. Just call Dickie. You know what I mean? Dickie put you in the right spot. It's your one stop shop for everybody there for you. If he doesn't have somebody, he will find somebody for you as well too and go from there. So Dickie, I know you've got a PowerPoint you wanted to share with everybody to bring up, kind of walk through all the different things that you're doing for due diligence. So feel free to share your screen and bringing up, you see your desktop. Okay, now what I'm going to do is I'm going to close my camera off here, but I'm going to be here lurking and listening so that it's all just you.

Okay, fantastic. Well, I'm going to start off with the PowerPoint and then we'll go to the website. I put this little PowerPoint together for after working with one of my clients and I'm showing the progressions of what can happen to your advantage by doing the due diligence. So Baldwin Advisory Group goes by Bag and one bag for all your real estate services. So what I'd like to do is start off with the the first thing, and Scott mentioned this in his earlier presentation about BPOs, valuations, etc. There's different ways that you can go about to find that value. You can do Zillow, you can do realty track. You know, you can try and find a local realtor that understands investors because there's a lot of realtors that just don't like work with investors. So with that being said, I'm going to show you the first thing which is a BPO or broker price opinion. What are the advantages of coming to someone like bag in order to do a BPO or broker price opinion? You can get on the Internet, you can try and find a realtor and have them go out and take a look at the property and give you a value. In most cases, in my experience, when you try and do that, if you're lucky enough to find a realtor to do that, they're going out to the property for one thing and one thing only, and that's hoping to get a listing more so than a true value by coming the bag. I've got third party vendors that have vetted agents all over the country and I can do both residential and commercial, but we're talking residential here because commercial can be a different can of worms, you might say. So in the broker price opinion, what they do for you is go out and take a look at the actual property and they come up with an as is value. And then if there's any apparent value, visible exterior damages, then they can adjust. Keeping in mind that they are not contractors, but to give you their best guess as to if the painting was done or siding was done, what is the as is value? Now before we get into the meat of a bpo, I get calls all the time. Please have the agent go and look in the window and take a picture. That ain't going to happen. Not only for.

Why won't that happen, Dickie? Why is it because they are scared of this sound?

We have had some agents chased off with guns. So. So everybody totally understands what an exterior BPO is. And yes, I can do an interior BPO as long as I have a lockbox code or a poc, which is a point of contact. In the node industry, 99.9% are going to be exterior BPOs. So the agent will be taking the pictures from the street, they won't go in the backyard, they won't go on the sides, primarily for their own protection. So with this being said, a BPO is where an agent will go out and take current pictures of the subject and then through MLS and in some cases other sources, they will find three comps hopefully within the neighborhood that they can use and make adjustments for and the things that an investor needs to look at when they do a bpo. And I'm not going to go into great detail because there's a lot of information on this, but the proximity to the subject, you really want to be less than a mile if at all possible because there's a lot of times they're just not comparables to, to the subject. But then they try and find, as I said, comparable sales that are within the neighborhood and they make these are all the descriptions of the year built, the count of the rooms, et cetera. And then they will make adjustments for the value off of the comps. They will also get three current listings in the neighborhood and once again they the proximities of the properties and once again make adjustments and then that is where they derive a 30 day quick sale, a property as is or repaired. And then there's any comments that the agents may have about the properties. Now once this is completed. And this is another advantage to using a third party vendor that has vetted agents because as you can see, I mean a lot of forms and formulas that going to the local agent may not have. Once this report is completed. And once again this is a map and excuse me, I'm sort of backing up here, maps of where the subjects are and then different views. This house happened to be on a corner so they were able to get some side views, street view. And then here are pictures of all the comps, the three sold comps and the three current listing comps to come up with the value. What happens after this? Then the agent gives a report to the third party vendor. It then goes into a quality control that will review this bpo. If for whatever reason QC does not agree with the comps, the distance, pictures, whatever, they will send it back to the agent for revisions. And there's sometimes that it goes back and forth two or three times. The whole point about using a system like this, it's an extra set of eyes which, which I think is absolutely huge when you're trying to deal with value. Now there's times where someone may not agree, the client may not agree with the value I am more than willing and the vendors are more than willing. If you have verifiable comps that you can support, please give them to me and the reports can go back in for revisions, whatever it happens to be. But just because your house is a three bedroom, you're trying to compare it to a five bedroom. A lot of times that doesn't work. So you need comps. And really within the last six months, you don't want to pick up a comp that's been sold three years ago when there's other activity because we all know that values go up and they go down. And we've had a significant increase in values over the last couple years. Who's to say what's going to happen in the future? So this is a bpo. Scott, are there any questions on this?

Great overview on that stuff? The one thing I wanted to bring up here, and I love it that you brought this one. If you scroll up there, you see the map, one of these comps is like 8 to 12 miles away on this actual BPO here, which I think is a great example of a lack of, they had a lack of potential sold in the last 90 days there. That's definitely something to take a look at too. I know Laura is working on a comp in Cleveland on one where the property they're looking at is across the side of the tracks from the where the comps were pulled. Do you ever see that happening sometimes where comps are not comparable in some cases to boost the value, to boost a purchase?

Absolutely. And that's why we try and put as much information together to help you make that decision. Yes, we got the listing which is, you know, 12 miles away or it could be divided by, as you said, railroad tracks or a highway.

This is why it's always important to trust but verify, ladies and gentlemen, if you've got a BPO in the collateral file, if the seller is providing a bpo, look at the dates, look at it. Because I've seen, I've seen funds put three BPOs in a collateral file and they go value off the highest. And the one that's got two comps that aren't even close to where the property's at. And we called them on their bluff and they're like, okay, okay. I'm like, come on, you can't do this. You wouldn't be accepting these comps if you were buying, but you're trying to accept them in use of sell them. So just like Dickie says, quality control is important and Just not to. Just not to trust the BPO by what's on the very first page but looking at. Looking and doing a deeper dive into it. Right, Dicky?

Absolute. In all fairness to a bpo, you can have two agents just like you can have two attorneys in a room.

Yeah.

And there may be a variance. Now, I will be the first one to be right in the middle of a transaction if one agent says a Property is worth 29,000 and another agent says it's worth a hundred thousand. But I've seen that.

Yeah, yep. We saw that just last week looking at a deal that zone commercial in Dallas. I'm like, wait a second.

Absolute. But the key to this is this is done by vetted agents. These agents are paid by the third party vendor to go out and do one thing and one thing only, and that's to get a value, not to get a listing. And to me that is huge. And if they have an agent that continually does not meet the standards of what the third party agency is, they will take them off of the panel.

What's the cost for a BPO these days?

Typically an exterior BPO, as long as it's not rural is $100. And that's for an exterior. If it is a rural or. And what's happening now also because of gas prices and everything that's going up, especially on the rural, I'm seeing the fees not get excessive, but 135, 150. Yep. Strictly because of drive time.

Yep, yep, exactly. And well that's an exterior. They're not really, you know all the two. If it's an occupied ass and people are hanging out in the front porch that that realtor is not going to get out of the car and go take photos more be a slow crawl drive by for the most part.

And that's a great point. They're given the choice of occupied, vacant or unknown. And I had one late last night that the agent came back vacant but there was an ice chest, there was chairs in the front yard and I personally sent it back to QC before sending it to the customer. And they went back to the agent and the agent put a full. Which maybe he should have, but he didn't. But it was corrected comments about the subject property that the doors were wide open. This was just all trash. The people had just walked away.

So it was basically, it's probably the. The two bums hanging out having a cold one.

They, the agents make their best guess as far as occupancy. Now let me caveat. Another Service if you are really, really concerned and we'll talk about the depth of it. I have another service called door knocking where I have armed individuals will actually go knock on the door and find out if a property is vacant or occupied. That's another service and we'll get into it.

Cool. We'll talk about that a little bit further down there. So, so besides BPOs, what's another.

Well, let me real quick. This is an exterior. We are talking pricing. If I do have that lock box and I do have the poc, either or I can do an interior as well as exterior for $130 typically, as long as it's not rural. And they will go in and take pictures of every single room. Now Scott, I think you'll agree that a property may look good on the outside and have a real, real high value, but the agent hadn't seen the inside. So if ever available, try and do an interior. But in the note industry, in most cases that's not an option.

Yeah, exactly. I mean if you have the ability to get into it legally, not breaking a window, you know, where there's a lockbox or somebody there to meet somebody to show. I mean we've had borrowers that met our individual there to pull an interior BPO, but like I said, yeah, 99% of times would be next to your. And that's why we're going to talk about some of the things we do online.

Well, and just so you know, I work with a lot of banks and lenders that come to me to do either an exterior and or interior bpo. Typically these are hard money lenders, but they want that analysis when they're loaning out monies, right? Yep. All right, let's talk about the next product. Let's say that you are okay with the value and you don't want to do a bpo. What are your other options? Well, I've got a product called an AVM which is an automated valuation method to where they will come up with a value of more or less of the neighborhood, not the specific property, but in the avm, which can also be tied into what is called a property condition report. And that's where like these pictures are done for a property condition report. But the AVM has the maps also. But what I personally like about the ABMS is it's got a lot of pertinent information about the subject that's available on through the automation but then it will have a whole bunch of houses that have either sold or been listed within that area. And in some cases. And you got to do a lot of reading on this, but here's the subject and it will show the list date like this was in January of 2021 and it was a listing and then it sold for $72,000. It may not be an exact comparable to the subject, but when you look at. And sometimes there's pictures, sometimes there's not, but it's a breakdown of each and every comparable through the automated valuation method. It's pretty massive.

Yeah, it's okay.

I've got a lot of clients that are okay with the value, but they just want to see more about the neighborhood. This report can be tied into, as I said, a property condition report or they can be separate. You can do just an AVM and just a property condition report. But when you do a property condition report, it has pictures of the subject and then answers these questions. Is the property visible? Does it appear occupied? The location, the property type, does it have a garage? Just very, very basic questions. Now the cost on a property condition report and let me get into lots of charts come along with it. But these are the pictures from the property condition report. My vendor really requires the people and I say people because these a lot of times are not done. These pictures are not done by agents. They're done by firemen that have days off or handyman or somebody that is just picking up extra monies. But the property condition report typically is only $45 and the ABM is $25. Any questions on these?

No. I mean it's a great way to look at some stuff on the front end side. What's the turnaround time for a BPO on average? And then also your property inspection reports.

And AVMs typically on the BPO once again, as long as not rural is three to five business days. On the property condition reports, I have turned these around in as quickly as two hours.

Yep.

But you should plan on around 24 hours.

Yeah, let's set some 24 to 48 hour time frames out there. Let's. I mean two hours is great. And that's really over delivering.

We can do that.

You've seen it happen. Now if it's out in Podunkville, Arkansas, it might not be two hours, it might be two days. Just because you gotta keep that in mind, everybody. And we're talking if you ordered on a Friday afternoon, it may not come until Tuesday the next week. Just because of things. Let's, let's keep some, let's try to have some common sense when it comes to ordering things. People get so good.

Absolutely.

You know, I emailed Dickey Friday night at 7pm I ain't got it at 1, at 8am on Monday.

Right. So these are some great products as far as valuations. And to me, a picture is worth a thousand words.

Well, and that's, you know that photo, you've shown some great photos there of that one. Exactly. People can use to pull it off to help with the marketing, to help add, you know, add to the fact that, hey, it is occupied. We see that somebody's got a trailer there. We see that there's emotional equity where, you know, there's stuff on the front, you know, there's landscaping or the flag flying on the weekend, something that looks nice, you know what I mean? And that's, that helps you in raising capital. Market that deal to your potential investors to fund the deal at the same time while you're going through your due diligence aspect. And here's the thing, some people get, well, what happens if you don't have it in a contract or the deal falls through? You know what, that's a beautiful thing to go back to your investor say, listen, we were doing a due diligence deep dive and this asset didn't pass the test because of a, B or C. That's actually doesn't show a sign of weakness. It shows a sign of strength that you said, listen, we're being cautious with your money. This just deal didn't make sense and go from there.

Absolutely. And I might also mention, Scott, I've got a lot of clients that have performing notes that they are receiving monies for like clockwork. As you very well know, most note, investors don't invest in their own backyard. Yep. And so you're not going to get on an airplane and like the client on this one lives in Arizona. These pictures are in Indiana. He's not going to get on an airplane and fly over and take a look at this. So I do have a lot of clients, as I said, that have portfolios that about every six months they will order a property condition report just to see what the property looks like. Because once again, a picture is worth a thousand words. And if that house is being trashed on the outside, you can pretty well figure it's going to be trashed on the inside.

Yeah. If you see that bag of a hefty, hefty, hefties growing in the backyard, it's growing on the inside.

So the next thing on the due diligence is, oh my gosh, I didn't realize I'm the best BPO valuation service for 20, 21 and 2022 years in a row.

That's right.

That I was nominated and voted in by investors all over the country. That bag is the place to go to get a bpf. Made me feel good.

Should you do it, you do a great job. So, so we've got an idea of the exterior value, the property interior value. You can send a property inspection report, you can do an abm. Can you do me one thing you didn't mention the ABMS is a confidence score. Can you go back and talk a little bit about what that is? I know somebody's going to ask a question about that if they don't understand what that means. I just want to highlight that because I think it's something that works in your favor or doesn't work in your favor. So there you go. See confidence score says 50. What does that mean? Dickey?

This will scale from 0 to 100. They're saying that this property, through all their automations of the neighborhood, this Property is around $55,000. You can feel more and more confident the higher this confidence percentage gets to. Most of them are anywhere between 50 to 100. Very, very seldom have anything below 50. But this is saying they're estimating through automation through all of these different comps that we had that it's $55,000. And just real quick, what did we have? Pretty damn good. It's saying a quick sale is 38, 8 and then a 90 day sale suggested list would be $55,000.

That's the thing this is going to get. Your BPO, your AVM is all going to be basically AI correct for the most part. And then your BPO is going to have a set of eyes actually looking at it and doing a little deeper dive.

Correct. Because on an ABM they do not go out and take pictures. This picture right here is part of the property condition report. This particular client ordered a property condition report in conjunction with an ABM and that's why this picture is in here.

That makes sense because then because otherwise it wouldn't usually have a photo. Right.

And keeping in mind, if you want just an avm, you can do that. If you want just the property condition report, you can do that or you can put them all together. All right. Next step in due diligence which I think is absolutely crucial is well, here we go. I hope everybody understands these are there for your benefit. So it takes time to go through and this is what you're going to be doing. You're going to be analyzing all of these different pages of documents and ordering BPOs from Ball Baldwin Advisory.

That's right.

All right, you want me to do this?

That title is one of the most important things we need. Yeah.

Title report. A title report. What is a title report? That is it can be done online, which the vendors that do these have subscriptions to the, the different counties, county seats, whatever, to gather this information. Are you able to gather some of this online? In some cases, yes, but not to the depth of what the title search vendors can do. So it can be done online and it can also be done by an abstractor. An abstractor is an individual that does this day in and day out. They physically go to the courthouse and find all recorded. And here's the key word, recorded information. You may be able to get some things online yourself, but once again, in most cases not to the depth of what a title search can do. Now you're going to hear a term O and E owner and encumbrances. That was the term used back in the old days. Now it's more of either a current owner search, a two owner search or a full search. And a current owner search is basically what it says. It's the information recorded about the current owner. A 2 owner obviously goes further back into deed history in a full search. I'm doing four full 40 plus year searches for a client right now. In you mentioned Illinois. In Illinois.

So it's going back to the creation of the property. Correct, all the way Back to that 200 previous 200. 200 searches. What you're going to pull most of the time in the note industry, a current owner. Okay, that. But what we always like to do is do a 200 search just to make sure. Especially if you're buying contract for deeds. If you're buying a note and the name does not match the county records is what you're buying on note. You want to definitely take a look to see what happened with that. Cause was there a quick claim, is there a foreclosure, tax sale, that kind of stuff?

Absolutely. Back in the old days, the owner current owner search was the norm. But as these loans start selling, as Scott said, or has contract for deed, you want to make sure there's no hiccups. So I personally, if you recommend, and this is what people ask me every single day, is what, what should I order? If it's a performing note and it hasn't bounced around from company to company to company, I personally feel that a current owner is okay, what is the Cost of this. Typically I've been able to have a nationwide fixed price and obviously things are going to be changing because of gas and all that again, but you're looking at $85 for a current owner search nationwide. The reason that I tried to get a fixed price is when some. It's so difficult. If you have like this deal is in Indiana and it's in Vigo County. Well, the way that it's typically done, every state, every county has different pricing. So my vendor agreed if I could come out with a set price. When you're looking at your due diligence, you know that I'm going to be spending about $85 to do a current owner search and I'm going to be spending about $100 for an exterior BPO unless there's something about it. The two owner search. I highly and I totally agree with Scott, the two owner for me is the way to go. Because there's most of these notes trading hands to hands, their contract for deeds, etc. This goes further back into deep history. And this product is typically a hundred dollars. So for $15 you get a lot more information. Now a lot of times on the two owners though also they will charge for copies and we'll get into the copies in, in just a minute. So many times. And Scott, I'm sure this has happened to you too. You've had so many people say, well, I can go to the courthouse and do this. What is your time worth? People? You get it especially in. I live in Montgomery. It takes me an hour to get to Houston. If I want to go to Harris county, how long does it take to drive there, to go through stacks and stacks and stacks of documents that you may or may not know what you're looking for. You get them copied, you come home, you start looking at them, oh, wait a minute, I missed something. I got to get back in my car and excuse me, outsource it to the people that are professionals and do this every single day. What information are you going to be getting? Details about the property, the current owners, the tax information, deed information, all the different changes of deeds. It will show if there's any judgments or liens, gives legal descriptions. And my vendors do this little thing. This is a quick shot on the taxes. A lot of vendors don't offer this little sheet right here. And then here is the actual documents from the county, the tax assessors, and just a breakdown of the previous and in current taxes. Were they paid, were they not paid. And getting into this is a little write up which a lot of other vendors don't offer. This is all the information that is in the title search. Now you were talking documents, Scott. There's 80 some odd pages of recorded documents that are part of this search and every one of them are important.

Yeah. So like I want to, I want to bring back. You see this list. You've just shown three quick claim deeds there showing a transfer of that asset from one individual to another individual. That's part of checking the deeds. And so you can see the quitclaim is Home Opportunity llc, Onyx Shadow Equities. Okay. That's an important thing to know that that was transferred. That's probably a quick. Actually probably a quick a contract for deed actually because that's what you usually see in a transfer. You know, was transferred from Onyx and Shadow equities out of Springfield, Virginia to, you know, I'm sorry, John Keith. Yeah, John Keith with Harbor. Yeah. Sold a lot. Know John very, very well. And you see it was transferred from Home Opportunity to Onyx and Shadow Equity. So this is a Chris Savanny deal, I think if I know the entities properly.

Correct. So yes, it's a lot of paperwork but as Scott said earlier in his presentation, you're going to be going through documents and if you don't. And here's another thing. If you don't understand all of this and you don't have somebody like Scott to help you, I also have a service called Collateral Review that will go through these documents and basically tell you what you do have, what you don't have and what you should have in order to make an intelligent decision. And then all of these need to be recorded. If you don't know how to record it. Bag can also help you get this recorded. Different.

You are showing the recorded documents here right now. You're showing recorded doc and so I just want to make that clarification. This was provided by the, the two owner search because this stuff is already recorded and you can see the stamp up there. What Dickie's talking about right there is if you, you're, you're buying it and you get the quick claim deed or the assignment sent to you from the seller and you need to get it recorded. He's got the third party vendors to help you record it at the county rec at the county and sometimes they'll do it electronically. Sometimes you've got to send it in, sometimes you physically have to walk it in. It varies from county to county and some counties are very specific in how their transfer docs, whether it's got to be on one page or two pages or three inch spacing at the front or two notaries or two witnesses. So that's why it's important to take a look at these and understand if what you're seeing files of the county looks a little bit differently than what the seller provided you. As far as, you know, witnesses and notaries and stuff like that, you probably may need to get that assignment or that new quick claim deed or transfer.

Doc redone or fixed corrected and you can see why. And once again, because of what's happening in cost, a lot of these counties are now they're realizing that they can make money off of these copies. So at times that hard cost and hard cost is direct cost of what it costs the vendor to get this information obviously is passed on to you, the investor.

Yep.

So I mean there was, you know, 50 some odd pages of documents that go with that title search. But let's assume that you are looking at a collateral package and there is a title search already in there that was done four months ago. And now this client is, is selling the, the note to, to you. You can do what is called an update. And it used to be a year, it's really being narrowed back down to about six months that we can do an update of that previous title search and show anything that has happened since that day. And this little report typically is around $35.

Nice. That's cheaper than the, the 100 bucks or the 130 to do that. But that's one thing to keep in mind. If you see something that's less than six months old, pay the 35 a day for the same vendor.

Absolutely. So the, I mean, yes, all, all of these things are, are cost. And so far we've talked what, Scott, approximately to $200 to do the standard title search. And in BPO. Yeah.

Less than two.

Those two items could literally save you thousands of dollars in. In mistake.

Yeah, well that's what we said in the beginning. Your due diligence is, is your insurance policy making sure it's actually a deal and not a dud. You know, there's other things you look at, but these are the two. These things should be ordered, maybe not ordered. Something's if you've got a new BPO and they're happy with that, great. You may not be ordering a new one, be reviewing it, maybe just doing an avm. But these are the two biggest staples of what it comes to doing your due diligence. And we'll walk you through some of these as well too.

But those are the beginnings and the reason that I put this PowerPoint together. This is an actual case with a client that. And I'm not going to go all the way back to the top, but the BPO in title search were originated in February of 2021. In August 2021, this client was selling this note as a partial. So he did the BPO and the title search back in February to show the. The buyer that was going to be doing the partial. He ran the AVM and property condition report and this title update in August.

Yep.

So it was just. I even recommend to people that have notes they can update the title search because you never know when a lien may have slipped through and been recorded against the property.

And that's the thing I wanted to ask you on that. What things does the title reports or title updates not cover? We talk in utility liens or utility bills or what's not covered in that.

In most cases because they're not actually recorded through. Through the county are water and sewer code and municipality liens and there are other services that are available that you can order through bag and there's some places where they can put liens against the property. And here's what happens when a property is sold, then that's when they, the title company, the actual title company will contact the water, the sewer, you know, those districts, to make sure that there's no liens. But if it's not recorded through the county, then it's not going to show up on a title search.

Right. And you still got to. That's one of the why we always tell you call the utility districts as part of your due diligence, see what's owed. Because a lot of times those water bills will follow along behind it in some cases. And it can be very. You might be getting a cheap asset, but there's because there's a big water bill and specifically you're buying a lot in Baltimore, Michigan, Chicago is another example of there's so many cities that have had some blight to them. Sometimes the water bills are pretty excessive because a. The copper's been stolen and you got the indoor water feature. You know what I mean?

Absolutely. I know that we're, we're pushing. I want to show you just one other product that I am really, really thrilled about and it's called a T. And excuse me, on this update you can see all of the new information that has recently been been recorded that's part of the update. But this next product is here in a minute. Can you believe how much paper is involved, Scott?

Well, this is why we don't go print a lot of this stuff. They keep it on file and scan it in electronically. Make sure you're using Dropbox, Dropbox or Basecamp. There you go. Your property tax statements, I think is what you're going to talk about next.

Is a what I call a tax deep dive. And it is a separate product from the title search. You wouldn't want to do it all the time. And this Little product runs $35 plus any hard cost, once again, whatever the county may charge to release the information. But here's an example of I think it can be used if you have a title search and it shows that there had been a whole lot of delinquent taxes and now all of a sudden they're paid. They don't typically show who actually paid those taxes, which means it could have been a tax sale, which a lot of times isn't recorded. So this little deep dive can go in just for taxes. That's all it does. And it's a good caveat to really want to dive into the taxes. And I've got some clients, Scott, that in their experience they don't run into that many liens on a property. So they will just order a tax statement or a tax deep dive.

Definitely important, especially if the names have changed. And some counties want you to like I'll give you an example, like Wayne county in Michigan, they're going to want you to sign up to be able to access a lot of their online information as a membership. And so paying for a property tax statement is going to save you time. Especially like Scott asked question about he's busy during the day. He doesn't have a lot of time to pick up the phone and try to track down and call county, you know, county companies, tax office across the county to talk to somebody about it. So this is that 35, 40 bucks will help you get that done and run while you're working your full time job.

And this report goes into a lot of times more details. In 2021, the 2015 through 19 property taxes were paid to avoid going to a tax sale. This is one example. Here's another one that at a PA and I've got to mention, and I'm glad I pulled this up, there's really four states that you have to do a what's called a mail in to get a tax cert.

Yeah.

And that's tax certification. And those states are Pennsylvania, Massachusetts, New York, in New Jersey. So a lot of Times the tax. Real live tax information will not be on a title search because it is going to require a mail in to get the tax cert because the information online may not be the final say. Make sense Scott?

Yep, totally makes sense. That's why you always double check with that. Demetrius asks can a tax detail wipe your first position note out? And the answer to that is yes, yes, yes. A tax sale. You have tax certificates and tax deeds. So like a tax deed. Yeah, might be out and you have to know what's, what's going on in each state. Some states will have a redemption period there where you can come back in and here's what happened. A lot of times the taxes will be sold. You'll have a period of time of one year, two year, three years before the person that bought that tax certificate like in Florida or Demetrius at those tax certificates are sold where you'll have like three years to come back and pay off the taxes the person buy it or they can enforce a tax sale that wipes out your first lien with the enforcement. Of course if it gets at the tax sale, if it gets bid up above what was owed in taxes, that overage goes back to you. But you don't necessarily want to lose. That's why it's important to look at your taxes owed and reach out to people using the service because if they're not paying their mortgage, they're probably not paying their taxes and they're probably not paying their insurance. So you don't want to invest in something and then have your investment get wiped out by a tax out. So yeah, always important. Now we have bought notes like we bought notes in South Carolina where we had gone to taxable. There was a one year redemption period. We purchased a note from a fund knowing that it already got a tax sale like a month earlier. But we knew we got a big discount because we had to pay eight grand in taxes. But we paid that eight grand taxes that reinstated everything and we were fine to go. So you have to know what's going on state by state, redemption period wise and stuff like that. Each state's a little bit different.

And the caveat like on this particular property in in PA these look at all these liens and here is a breakdown because what, what happens in a lot of states, taxes are turned over to a tax service collection agency.

Yep.

And not going to read every line of this but you can see that these were the unpaid taxes went to Jordan Tax Service which does all of Pennsylvania.

We've also seen this too. Dickie instead of them foreclosing and taking the property back actually during COVID getting judgments and going in after the entities and going after to collect deficiency judgments from the banks and collecting their taxes directly from people's accounts.

Correct. And here's one that shows this particular property was a tax sale. And this one gives the last day to redeem. And so this is. Can you understand why I call this a tax deep dive?

Yeah, that May 2nd. May. That May 2nd date is coming up fast down there at the bottom.

Yeah, yeah. And sometimes if it's available, they will put who actually bought the delinquent taxes. So Scott, one last thing if I could.

Yeah, you're good.

Would like to show you the BAG website.

Yep.

And just quickly go through other things once you may already have the asset. Baldwin advisory group www.baldwin advisorygroup.com there's my phone number, there's my email. And Scott likes this. Even though I got a brand new website built, Scott likes this one better. But what this is is a breakdown of the different services that are offered by bag. We've discussed the BPO and the title search. And for people that are coming to the website they can go in and read more about what a DPO is. And although there is an order form on the website, I personally and Lauren and the folks that deal with me on this call know that I like to have an email telling me what you want and that way we can start a chain on that particular property. But this is real simple to fill in. You give me the information. The subject property, is it an exterior interior? I also do full appraisals. I do a lot of full appraisals for my lenders. Hit submit. And then that immediately comes to me. So each one of the different services has an order form. Here's something that I want. Everybody please on this call, if you have not already completed, go to REO in notes. And basically what I do is with this form, it's dated. You give me your contact info. You let me know if you're a buyer or a seller. Are you a private or institutional group? If you want notes, you check off performing non performing contract for deed, residential, commercial, bulk, individual, as Scott mentioned, what specific states do you want? And I'll tell you in just a minute why I really, really need this information. Any comments you want to put in. If you're an REO buyer, you can check off what you're looking for. Any comments, hit submit. This comes to me. Why do I have this form? I've got sellers that are in my network that periodically will ask me to help them sell their assets. I will say I do not distribute tapes if I ever get them. But the reason I do this form by states. Let's say that Scott completes that form and he's a buyer and he wants a non performing note in Idaho and Karen is a seller and she's got a non performing note in Idaho. I simply put Scott and Karen together. I don't get in the middle, I don't chase documents, I don't tell you what color the house is. I don't talk pricing. I let you work it out between yourselves. And if a trade goes down, how do I make money? I collect a point on the selling side. So it's a win win for everybody. Any comments Scott on that?

No, that's good. That's good stuff there. Question for you on this. We mentioned something a little bit earlier on your collateral review. When somebody actually gets the copy of the collateral file, what's the price point for collateral review and turnaround time on that? Dickey?

Typically it's called the quick view is around $35.

Okay.

For the underwrite it can go up to approximately 150.

And by underwrite that's where they're looking at the collateral file and making sure the assignments are there, the deeds are there, the alanges. They're basically making sure you have everything in there that you need to be able to a foreclose or what you really need in buying that note. Correct Dickey?

And they're basically reading every single word of that collateral package. And I do have attorneys in my network which typically they charge by the hour to do collateral review. So it's a great, great source.

Yeah, Having somebody that's doing it, a third party versus an attorney can save you a ton of money. 250 an hour is usually the minimum that attorney is charging. Whereas a, you know like a full deep dive in the collaborative. You said 130, 150 bucks is well worth the time especially when you, you don't know what you're looking for. And you get a, you get a PDF that's 1500 pages deep.

Right? Or you've got 10 files.

Yeah, exactly, exactly 10 files.

But please everybody, if you are interested in selling and, or buying assets as Scott says, my Rolodex is big and I'm there to service you if you need to originate a seller finance mortgage. And I'm real excited that this particular vendor is now also going to be able to do, and it's almost finished to do Traditional origination nationwide.

Nice.

Which is huge.

Good stuff. You got property preservation in case you need a lawn mower.

For instance, I'm working right now on three California properties that not only did I do an occupancy check, but if they were vacant, we went in and changed the door locks and put a lockbox on and took pictures of the interior as well as the exterior and put a bit in to clean trash all the. The trash out. And then also if it was visible, any. Any repairs that might be needed.

Very nice.

I do winterizations in the, in the wintertime. You. Scott, you'd be surprised how many investors have vacant properties in the North.

Oh, yeah.

That they don't know what. I mean, we're in Texas. We don't know what winterization is.

Well, you know, North Dakota got 12 inches of snow last week. I got an uncle up there had 12 at snow drift in last weekend being the middle of April. 12 inches of snow.

Yeah. I mean, it's crazy. So. And let's think about this. What if you have a vacant property down. Down south right now where the spring has already come and the grass is growing and it's a vacant property and there's trash out there. What's going to happen, Scott? Are you going to get code violations? Yeah. Well, here's a little lawnmower. You know, we can go out and we can cut grass. I've got various money lenders, title and escrow. I don't want to get into depth on this, but Scott, I hope that at some point in time you talk about lender title policies, which I really believe in, in the note industry, being able to do a traditional closing or the lender title policies.

Yeah. Especially if you're originating. That's one big thing about owner finance that a lot of people try to go. They skimp on. And I'm like, no, if you're going to originate, get you a lender title policy, it's so important, especially part of that. That's a little bit extra. It adds value to that owner finance note that you're. You're creating. Absolutely.

Because after 12 months and that thing seasoned, you, you know, you're selling that for almost par.

Yep, exactly. Yeah.

You run into a situation that you need title curative. In other words, there's hair that needs to be cleaned up from reading the Collateral review or the title.

A great example of this, especially the release tracking, is we had this happen multiple times in the past. When you buy notes and banks sell notes, well, they don't always go back and release. Sometimes they'll forget to release the existing lien that was refinanced out. We've had that happen with Capital One and Wells Fargo and some of these other things out there that you've got to go back and say, okay, we got to track down who can sign off to release this lien that's still in place that needs to be released and remove from the title aspect of it. So when you, when you pull your title and you see liens that are outstanding still on title, this is a great way to a vendor to reach out. What's the cost for title curative and release tracking on stuff like that? What's it kind of run?

Absolutely. We've already talked about collateral review assignments and recordings. Instead of keeping your files in a cardboard box in your bedroom, we can store originals. You need mortgage servicing if you want to open up a self directed ira. If you got tax issues. I'm real proud of this real quick. And Scott has utilized this product I have and it's growing an investor base, investor friendly Realtor network where many other realtors. There's a little over a hundred right now. The goal is to have one in every major city in the United States. But the realtors try and vet them that they since you're out of town and they're your feet on the ground, they can not only list and sell, but many of them through their own hands or through their local can do a lot of the preservation. They can change those door locks, they can clean an empty house out a lot of times it's a lot cheaper than the traditional property preservation vendors. I do want my realtors to be able to make money and I hope that all investors realize that these are people too. And if they drive from their office to the property and inspected for you, they should be compensated in some shape, form or fashion. So that's just a friendly. So at any rate, if you, anybody, if you've got a realtor that you have worked with that you're extremely comfortable with and they understand the investor world, please let me know and I will definitely put them in my network. So somebody one of your investor buddies, because we're all family in this industry, be helping somebody else out. Attorneys. I've got a full network of investor friendly real estate attorneys that do foreclosures, evictions, et cetera. Skip tracing is on here. Scott can tell you from previous there's a lot of scammers out there and I'll be the first to admit I had a scammer that Collected upfront money and went dark. But they are no longer part of the network. But the basic skip tracing, name, phone number, email we can take care of. There is a new box that's coming in. But a lot of the other services I mentioned door knocking, which is huge door knocking. I can do a one visit for $60. And that's where they will actually go to the house, find out if it's occupied. If you've got documents you want either handed to the occupant or left on the front door, I can do that and they also take a picture. Or you can do a 3 visit which is $80. And the 3 visit is if their place looks like it may be occupied but nobody's there, they'll come back a second time. If nobody there the second time, they'll come back a third time at various times during the day or week and they will also leave documents. It's real difficult a lot of times to get the direct contact info from the occupants. But the letter typically is introducing yourself. Please make payments to so and so if you want to. If you need a cpa, it's I've got a nationwide network. So there's a lot of brand new services coming in that are going to be available all the time. Now let me real quickly explain how Bag makes money. This product and this product and everything that falls in there. I am the actual client. As I told you, typical Investor may do 5 BPOs a year. Bag does hundreds of them monthly. Same with title search. So these are private, labeled under the Bag logo. I am the actual client. But because of the volume that I do with each of these entities, I'm able to pass on a great price to everybody, be it an individual or the guy that's giving me 50 deals at a time. So I'm invoiced by these people. I in turn invoice you and then pay the vendors. Typically I do not send an invoice out until the job is completed. Knock on wood. Of the 5,000plus BPOs that have been done, I've had one person stiff me for for a hundred dollars. So I'm here to help you. So I feel real good about that. All of these other services that are listed, if you need any one of these services, I directly introduce you to whoever that vendor is. I've got so many vendors and so many products. Unfortunately, I don't get into the details about each and every one of the services. That's why I put you directly with whoever that vendor is to discuss Their pricing, their turn times, etc. When it's all said and done, you pay the vendor, not me. And full transparency. I do have referral agreements with my vendors, but because of the volume that I do with these, I do several hundred referrals monthly. They don't raise their price to pay Dickey. So guys, that's pretty much what bag is all about.

Got a question here, Dicky. Do you have a price sheet where you could provide to us? We could throw it in there so everybody has a bit of an idea because that was a. We covered a lot of information there. You have a price sheet that we could upload the file, the, the manual, everything for everybody to have there as well. So they know.

And you know, keeping in mind, I, I do have the, the set prices like we talked about on the BPOs and title searches. Keeping in mind that there's always instances, but I will never proceed if the price is higher than what I'm telling you because an abstractor could be charging copies, but as we could see in the title report. Well, how many copies are there going to be? We don't know. Well, how much are they going to be? Well, every county and state is different. Some of them charge a dollar a copy, some of them charge 50 cents a copy. But yes, I can give prices. But keeping in mind if it exceeds that, I will not proceed and I'll get your permission to move forward.

Two questions here for you. First, we'll start with David's question. David asked the question. Does the collateral review underwrite result in an opinion on whether this would be a good investment or the end result of that is no, they're not going to give you an opinion. It is up to you to decide with what you see. They're simply going to show you what is if everything is there or if there are any deficiencies as far as missing documents. You know, like I'll get one of these back and it'll say that hey, there's all the assignments are there from A to Z to transfer, but there's like a launch missing. Well, in that case I'm okay, go to closing because I know I'm going to launch created very quickly and pretty inexpensively. But there's an assignment missing which I'll share. I'm this one deal at work and we're waiting on assignments. We're not going to close until the assignment is here. Okay, so that's what that means. You have to make the decision on if it's a deal or no deal. But that's why you have the collateral review to identify if there is any missing holes that would stop you from foreclosure, the transfer of the docs, the transfer of the asset. Correctly. Right, Dickie, that's it. Another question from somebody asked online. I'm sorry, go ahead, Dickie.

Well, no, I was just going to support. What you're saying is because you may have more risk tolerance than what the collateral view does and they don't want to be blamed for making a mistake to tell you to buy or not buy.

Yeah, nobody's going to tell you to buy or not buy. That is ultimately up to you on what to offer. And if the numbers make sense for your investment, you have to realize that everybody out there, you're the final say. Now, question for you here. Somebody asked a question. Do you use. Have you thought about using TransUnion for skip tracing, getting signed up with them?

No, I have not because I could look into it, the sources that I had. And once again, in all transparency and Scott got involved with this individual way back when.

It wasn't a lot of money, it was a little bit of money from the pull some information and they just fell off, you know, they just didn't return the information. And that's okay. It'll happen. Vendors and Dickie was the first one to come in and say let's get this fixed, let's buy. Got somebody else new. Let's test them out. You know.

So in that period right now I do have a vendor that I'm signing their contract to where I can go because of the volume that I'll be doing. They've given me access to where I can go in and put the people's names and things like that. And so we're going to test that out to see how that works.

We ask a question or what about PACER reports? Do you guys do. Are you able to pull bankruptcy filings? Bankruptcy reports?

Yes.

Where is that done? On the website.

It would fall under the title arena. And keep in mind, if a bankruptcy obviously is recorded, the front pages will show up in the title.

Sir, I didn't know if you had the plan. I was able to log on to pacer.gov to download the reports. As far as the plan, yeah, we.

Can go in through the title service. I honestly, I don't do that many of them, but yes.

Okay, good. That's good to know everybody because we'll talk a little about that later on as they're going through stuff here today. Dickie, once again, bud, thank you so much for Coming on spend an hour and a half going through some of the different ways to order this stuff to secure their investment to secure help answer those questions and identify if they've got a deal or a dud.

Buddy. Well I mean we make a good team. Buddy.

Yeah, same here man. Well hey, you have a great rest of your Saturday. Enjoy the grandkids. Pace yourself. Get your Red Bull. Maybe not. Maybe not. But thanks so much for coming on.

You could be going all day, right?

Yeah, I know where we're going for quite a while. Probably go till 3 o' clock this afternoon based on everything I've got planned.

Up for I like to say for the folks that are on here that are using bag thank you. I appreciate it. For you that have any questions please. I mean do I work a lot hours What I tell everybody Scott, I told you this. I only work a half a day. If I can't get it done in 12 hours then I'll start working the next day. So I try and get back with everybody as quickly as possible. I'm here for you. That's all I can say.

He is everybody check it out. Baldwin advisory group.com check it out. Add it to your favorite list. Star that because you're going to be. I mean Dickie and I talk weekly. If it's not via email it's definitely on the phone going through different services and stuff like that.

And please reach out through LinkedIn and Facebook and if we're not already connected, let's get connected.

Amen to that. And Dickie, actually you'll be coming to Austin in a couple months for our nut mastermind.

Looking forward to that. I want to swing from that chandelier again.

There we go baby. Exactly.

It.

Sa.