Tim Bell walks through finding "free and clear" properties by searching public records for houses with no recent loans. Target owners whose last recorded loan was 30+ years ago, like empty nesters with high equity who might sell.
The next method on our list, free and clear property lists. Now, in my experience, it's much easier to negotiate with someone who owns their property free and clear than it is to negotiate with someone who has a great big mortgage on their house. Obviously that makes sense if you think about it. And as a consequence, I like to talk with people who have free and clear properties. Properties where the last time a loan was taken out was about 30 years ago or so. So if you look back when the last time in the public records, when the last time a loan was taken out on that particular property and you see that it was 30 years or more, you know that most likely that property is paid off. Anything that appears in the public record there would be a loan. And if they have a loan on the property, it's going to appear there. Now it's possible they may have borrowed some money from their brother in law and didn't record it or something like that. But for the most part, properties that show free and CL in the public records, or rather properties where the last time a loan was taken out on the property was 30 years ago or more, then those are going to be good properties for you. Those are going to be good opportunities. If you think about it, what's happened during that time frame, that 30 year time frame? Well, typically they, as we've already talked about, paid off the house, which means they have a large equity position, which means they're going to be easier to negotiate with than someone who has a smaller equity position. And also ideally over that 30 year period, if they, for example, bought the big house, ideally their children have grown up and moved out and they don't need the big house anymore. So you combine the fact with that they have a high equity position in their house with the fact that they don't need the great big monster house anymore because the kids are gone, that offers a perfect opportunity for us to go out and put a deal together on that type of property. Free and clear property lists can be a great way to find people who have a desire to sell their house. They have a high equity position, which means in many cases they'll negotiate away some of their equity just to get out of the house. So that can be popular and that can be helpful for you. Now, how do you find these free and clear properties? Well, we talked earlier about your team members and one of the team members of course is your title company or title attorney. And the title company or title attorney's office does have direct access to, as we've talked about the public records and they can look up in the public records and see when the last time a loan was taken out on this property. And so you can find properties where the last time a loan was taken out was 30 years or more ago. And then that way you know that that property is paid off. And you also have a pretty good sense that the family has changed, the empty nesters don't need the big house anymore, and it could be an opportunity for you. So again, ask your title company or your title attorney's office to run this list for you of properties where the last loan that was taken out on the property was 30 years ago or more. That could be a good source.
