The Expert Podcast

Let's talk about some of the popular subjects that came up this week Our investigative division is going to talk about asset searching. And asset recovery And some of this, comes into play when you have a judgment or where there's some family event like a probate or divorce. we're going to touch on. mediation. Where if you have a dispute in a court, or even if it hasn't gone to court yet how mediation I can offer some advantages to that We may touch on some electric vehicle news There are some, recent developments out of California where there's some free money being thrown around for electric vehicles.

I'm probably going to talk about real estate more today than normal. where there's some still some deals on residential real estate single family homes maybe under 200,000. we're going to talk about some zombie mortgages popping up from back before the housing. bubble crash and how those might be affecting homeowners. and also some…strategies on getting inspections done when you're buying a house.

And if we have time at the end we may touch on some business management strategies. You know if you're a business owner and you have people trying to sell you stuff. All the time how to deal with salespeople how to make that decision and how to help the sales person or how to get the salesperson. To negotiate for you. How to put them in a position where they're working the best deal for you So we're going to dive right in first We're going to talk about.

Assets searching. So. There's three or four different scenarios where a client needs to have an asset search done. And one of the most common is if there is…

a judgment. Against another party. Maybe you have a lawsuit and you've won a judgment. And now you need to collect that money. Maybe you're in.

A certain type of a case That's a family law case like a probate. Somebody. died and they're supposed to have left you money and you don't know where it is. Maybe there's other family members that are shuffling some of that money around. And some cases there's a divorce happening and there might be missing money.

One of the…

One of the things that comes up quite a bit with. divorces as people try to hide money. And here's an example of an article. this one happens to be. just from within the last few weeks where there was a husband in a divorce that had a half a million dollars in cryptocurrency.

And that money was found. Look one of the things that's going to happen is if you're in a, any kind of a case involving a large sum of money divorce probate lawsuit, the other person's going to try to keep you from getting. As much of that money as they can. And in some cases they're going to try to hide that money…

Cryptocurrency Bitcoin. Seems like a very tempting way to hide money. But in most cases it's the worst way to hide money. Not old. joker, somebody tries to hide money under the mattress or they bury money in the backyard.

In reality that's probably a better way to hide money than crypto because crypto can be traced, even though it's anonymous. The flow of that crypto creates many many data points where the money came from where it goes to You can follow the wallets. So, especially amateurs. Using cryptocurrency it's not the best way to go So this is somebody who literally got busted in reality. It's not the, the biggest case you know we've seen many cases even in our.

our agency where there's more than millions of dollars that are being hidden in a divorce. There was a famous case back in. I think it was 2015 where you know there was a spouse. that had $400 million. when he was divorcing his wife this is obviously a high, high net worth individual, but it's not uncommon And in this case,

The people found it because look, the one thing about hiding assets. The…

Act. The activity of hiding assets usually creates more records than the asset did in the first place. Most people are not good at hiding assets. Unless you do it for a living every single day And I mean, not that you're an accountant or an attorney that knows how to hide assets. The people who hide assets Well, our high level narcotics traffickers.

Or, international terrorists that have to hide assets for life or death reasons. They can do an okay job of doing it But even those people. You see it in the news all the time. They have their assets discovered by. government agencies FBI DEA CIA.

They find these assets. Four. The people who spend millions hiding them. So an average person trying to hide assets is probably not going to get away with it. One thing to to be aware of when you do find assets and you'll always find them if you do the right kind of asset search you do the right kind of due diligence.

Assets are always going to be located, right They're not going to be hidden. The only time that somebody gets away with hiding assets is if nobody ever looks for them and you let them get away with it. But when you find him what's very very important is how you. Collect them…

Let's say you could find a bank account. And. You know, The person knows you $50,000 in a judgment you find their bank account that has 150,000 in it You want to get that money? A lot of creditors, even attorneys will make the mistake of walking into the bank with the copy of that asset search, a copy of the judgment and say look this person knows me 50,000 give me their money from their bank. You walk into a local branch.

Definitely the wrong way to go. Now remember we're not attorneys, we're not giving you legal advice. You want to get that from a qualified law firm? But most of the work we do are for law firms So we know how this works. You have to get a writ of garnishment from the court to, to present to the financial institution.

And even when you do. You shouldn't bring it to the local branch. You should go to the main office or regional office And here's why. In most cases. If a bank receives a valid…

Garnishment record. From. A. Debt accreditor. They have to…transfer the money.

To that person. Without notifying the. Account holder until afterwards, right…

But remember that bank isn't really not on your side. The account holder is their client You're not right So they're supposed to not play favorites Although some banks don't really care. Right there. They have millions of account holders They just do the paperwork. Some of them especially at a local branch might have a personal relationship.

With the account holder they might know Joe Schmoe that walks into bank once a week and cashes the check or talks to them about loans or whatever the case might be…

So by walking into a local branch. You increase the probability. That somebody in that branch could tip off. The debtor. And allow them to move money and then you have to start all over…

The other thing is…if you just walk in without a writ of garnishment, Now you're putting the bank in a position where they're allowed. To tell that debtor. Because you don't have the proper…

request for them to transfer the money You have to have that writ of garnishment. And if you just. barge into the bank like a bull in a China shop and. You have your judgment you have your assets search and say look this person owes me money Give me their money. They're not allowed to do it.

And if anything is wrong with the way that you request the money. Now all bets are off that bank and notify the account holder and say look somebody came in here trying to take your money. You might want to be aware of this and then they can move their money around. So…

If you are going to…

Garnish money. Or any asset for that matter real estate vehicle boat vessel corporate assets. Make sure that the method you're using. Of seizing that asset. Garnishing that asset is the correct one and all I's are dotted T's are crossed.

Because if there's anything wrong with the garnishment…

The trustee whether it's a bank whether it's the clerk of court, whether it's the recorder of deeds department motor vehicle for car titles. If they get something that's incorrect. They can reject it and now they can notify the person who is…

Who's the debtor. So you want to make sure you have all your details correct…

Another note to be aware of with asset searches one of the most common and increasingly common. Type of case in inquiry we get in our investigative division. Is probate. This day and age…

It states from somebody who died it can be hundreds of thousands and millions of dollars It doesn't take much to have a million dollar state. You have a house, have a couple of bank accounts 401k Boom You're at a million dollars. And if you have two or three. Errors children, right…

It's not uncommon for one of them to try to shave a little more in their direction. Right. Even if they. Rake off an extra 50,000…that benefits them. And a lot of times they'll do it.

At the expense of their other siblings, but it's not necessarily they don't think they're doing anything wrong Maybe they think well, the other sibling he's got more money anyway So I'll just take my. A bigger share or. That person did me wrong in the past So I deserve more or I spent more time taking care of. The parent So I deserve more. Well if that's not in the will.

That's not correct. But you have some that justify just like any fraudster or a scammer justifies their actions. Taking more money. Usually it's the one who has…a easy executor of the state or closer in proximity Oh look the typical case we get is. parent the last parent dies.

And one of the siblings, the errors will contact us and say look, I know my parents had bank accounts They had money that had real estate, but when I'm seeing the estate I'm not seeing as much assets as I thought Can you look into it? So we do asset searching and asset tracing. And we find that maybe there was a piece of real estate that was sold off. Separately. That nobody knew about piece of land.

Maybe there was a business asset that was transferred to somebody else. Maybe there were bank accounts that were closed in the funds. We're

distributed in a cashier's check. It doesn't take much And sometimes it's a small amount Sometimes you see a vehicle, you know they had an old vehicle that was a classic car and a barn that's worth $30,000. And instead of putting in the state that's distributed properly they give it to their niece. Right. Whether or not you want to take action on that That's up to you but.

The estate was put in a will. For the wishes of that. Person for their legacy. They wanted that money to go in a certain way. And if you allow it.

Two. Be distributed differently than that. Then that's not. Honoring their wishes. Look if you decide you want to give some of the money to somebody else yourself that's fine.

Let the money be distributed first How the will. Directs it to how the person who died wanted that money to go. And then you can decide to give some of it to somebody else whoever that is if you want to. But the wishes of that person should be honored and you don't want somebody to get away with it because at the same time, it also enables them to maybe do other things which might not be good So keep in mind that probate is a lot more common than people think.

it's the fastest growing area fraud look, four years ago the biggest type of fraud was corporate embezzlement and Ponzi schemes. Right Investment frauds. Now the biggest area of fraud investigations is family law. Probate and divorce divorce has always been around you know when you're divorcing a spouse there's already a conflict. So somebody trying to take extra money from the other person.

That's not unheard of. And you can understand that. So I write but you can understand it. In a probate case you're dealing with people who are your relatives. Right.

Brothers sisters cousins…

And that's that's a whole different deal So be aware this is happening and it's. It's more common than people think almost every time. Somebody suggests that we look into a probate We always find assets being…distributed in properly. Many times by the executor…

Keeping on the…theme of legal conflicts. One area that people overlook is using mediation. As a form of resolution. If you have a conflict a lawsuit a dispute and argument. contract issue with another party.

You can always file a lawsuit go to court and battle it out with the court Let a judge or jury decided. But Nope. who knows anything about disputes thinks that's a good idea. Not even attorneys…

Attorneys. Even though they get billable hours and they make more money If you go to court, you ask any one of them They don't want to go to court. And approve a point Here's a an ad we saw for there's a company. That. is advertising.

On…

Let's see if this is it here. Oh that's not it. Yeah, they're advertising on Instagram. For a legal…

System. That you can sign up for as an attorney. Escape the courtroom never work a heartbreaking case again. Get profitable trust clients a hundred thousand six months Right. So they're appealing to the despair.

Of attorneys. Who I…

don't like to go to court and it's not like they don't want to advocate for you because they do, but they know that the better way to go is not to go court and duke it out. Right. Many clients want their day in court They want to be heard They want to be, you know, put their Their cards on the table and that's fine And we'll talk about how that works in mediation too. But attorneys know that all you're going to do with me going to court is ending up with a worse result. Then you would have had you gone into some type of settlement or what's called ADR alternate dispute resolution like mediation arbitration.

You end up with a worst result and you pay more money. You have to pay money for the court fees you have to pay…thousands or tens of thousand dollars to an attorney Ask an attorney What a typical, even a minor civil litigation is going to cost. It's going to be five figures maybe six 50 60,000 easily. We've seen cases that were. A relatively minor contract case 10 or $15,000 at dispute that costs a hundred thousand dollars in legal fees for both for each party.

It's crazy. So attorneys don't like it. You won't like it.

you might think that while the attorneys should you know go to bat for you they will if you want them to, but they know it doesn't do anybody any good That's why these companies are out there…

Trying to give attorneys. A…

An outlet for not having to do litigation because it doesn't help anybody And it takes a mental toll…

In some areas. Mediation is required. Right…

For example here is some information about, North Carolina. Where. This is actually from a law firm Here we go Here's a law firm. Warden Smith don't know anything about them but you know they have this article primer on mediation in north Carolina's courts there they're promoting mediation and there are law firm. Litigation is costly both time and money.

court dockets or backlogs so it can take longer. Even years to resolve a lawsuit There's another reason right? To save litigants and courts time Most courts now require…mediation or some other type of dispute resolution. Long before a case goes to court. And we see this in many jurisdictions You actually have to at least try mediation Now there's a lot of misconceptions about mediation.

One is that the mediators come to tell you what you have to do That's not true…

The mediator is there to help facilitate. A result. You could walk away from mediation anytime you want If the mediator. Suggest something or offer something that you don't want agree with. It's up to you.

Right. A lot of attorneys will…

We'll use the phrase immediation is your last chance to control your own destiny. Right And I mentioned that to a colleague. a year or so ago. And he. look, attorneys must go to the same training school because that's exactly what my attorney told me He used those words last chance to control your destiny.

And they know that because once you get into the court system, It's out of your hands You have to abide by what the court says. mediation has become customary and is required. It still seems to surprise litigants that they're required to discuss a settlement with the opposing litigant. A lot of people want to have their day in court They want their pound of flesh Right. And.

That's fine I mean if you're in conflict sometimes you might have spite against the other person or you want to get back at them. That's all great. But that spite or that revenge or vengeance is going to cost you a lot of money and it may cost you more heartache. Then the satisfaction you get from. Fighting it out with that person…

It talks about, you know what are the logistics and preparing for me? and, and those kinds of things But. The better resource for this. We found his…

What are…the advantages mediation you might think Well it's just a negotiated settlement Can't my attorney negotiated settlement. Yes and no, your attorney. Is advocating for you. Right. They're on your side They can't be neutral.

They can't hear the other person. Many times. All the parties in a dispute want is to be heard. In fact think about your position in a. Conflict or in a court case.

Basically you want to be heard? That's what that's why people say I want my day in court. When somebody says they want their day in court, it's not because they love going to the courthouse. They don't want to go through the metal detector and get frisked…and…get felt up by a. By the you know the the, the guard at the courthouse and then have to wait.

In the lobby. You know courthouses are not luxury buildings Is that like going to your low lawyer's office and a nice, comfortable commercial property class a office space with a. LA with a lounge with Perrier water and coffee and everything else.

courthouse is a very stark government building It's like sitting at the DMV. Right. So when you say you want your day in court it's not because you want to go to court. It's because you want to…tell somebody you want to tell the world what your deal is You want to tell everybody what the other person did wrong…

Isn't that what it is you want to show? The public. That's your opponent is wrong and tell him what they did. Even if you know, That overall you are in the wrong. Even if you know that overall you're probably gonna lose.

You want to tell. The rest of the world at least what the other side did wrong. So you're not completely the bad guy…

Right Or you might believe you're the good guy and you want to show the world why the other side is wrong. How can mediation help you with that Well, here you go…

This is a great article called it's not always about the settlement. And settlement is only one of the reasons that mediation is good. You know one is a fresh perspective You know you have a mediator who listens to both sides and kind of sees the reality of the case. Your attorney can somehow sometimes do that. But again they have to advocate for you.

And even if they do see…

The, the realities and the, the. The good points of the other side. If they bring that up to you what are you going to say Well whose side are you on Anyway? Right. If your attorney starts to point out look, you might want to consider the other side.

They have this good point They made a good point. You're not going to like hearing that. And you might not even keep that attorney if they point out things of reality of the other side…

Where the mediator they play neutral. And this is the biggest one right here A lot of people think that the biggest advantage of mediation is the privacy because when you go to court or everything you say in chorus public record, Somebody says bad stuff about you It's on the public record and everybody's got to know that forever…

Mediation is private whatever goes on behind closed doors of mediation you can lay out all the dirty laundry and vice versa And nobody's going to know about except for. The parties have that mediation which is confidential. People think that's the big advantage I don't believe so. The biggest advantage to me is this. Opportunity to access your assess your risk.

If you are litigant in a case. And you believe that you're right. And maybe you are. It doesn't matter if you're. Factually right or morally right If you go to court.

You still have a risk that you could lose. You could even have a risk that you could win, but that it could cause other damage reputational damage evidentiary damage…

Time. Stress. Right. So. You want to make sure that you know what the risks are A mediator has been through hundreds or thousands of disputes and court cases.

They're going to know. What are the pitfalls What are the hidden. Risk that you might run into going to court Your attorney knows that too. But if they tell you it's probably going to fall on deaf ears. Right.

So you want to make sure that you have. Y eyes wide open knowledge of all the risks. So that you're not…

Making a decision in the blind right. And there's another one another, another you know we just talked about opportunity to be heard many lawsuits arise from tragic circumstances grief. Finger helpless us. Look, if you're in a lawsuit. You're already upset.

You already are mad maybe you're depressed whatever it is. And you. to vent that you want to get that out there. Don't confuse…

The court system with therapy with counseling. If you have to get that out there and do that separately because if you start to mix in that anger that sadness whatever that is into the court dates it's just going to cost you money And it's going to make that worse and obviously less animosity between the parties. You're not fighting against the other person directly You have. Neutral facilitating the middle. That's hearing both of you in and separating out the conflict.

Think about this. When you buy a piece of real estate you buy a house or sell a house…

You don't have any conflict animosity with the other person You don't have grief anger or fear. You don't have animosity to the seller or the buyer. Right. But you also don't contact them directly. There's always a real tour or two realtors in the middle of it There's brokers.

And they do that because it takes away the personality. If you point out Hey I don't like the color of your kitchen. the other person's going to take it personally. And they might. Not be as comfortable in negotiating a deal with you.

Right. You gotta remember that house is something they lived in for 30 years and you pointing out the flaws because it doesn't match you. That might be taken personally on the other hand. If you're a seller and you look at buyers and you're not sure if you can imagine them living in your house that creates animosity, realtor separate that out I think of how much animosity there is between people who do have a. A true.

Conflict between them. That's where a mediator can help. So on the other side of the break, we're going to talk about some real estate issues. Zombie mortgages title searches. We're going to talk about.

an alternative way to do home inspections that might be cheaper and also get better results than just call up Joe Schmoe home inspector. But first take a look at. some messages about contacting cert. experts. That can give you some advice without having to get a sales pitch without having to talk to a clerk or somebody who doesn't know anything about their industry.

this might be some information we'll see in a minute…

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from real people…

So in. The consumer and business world one of the biggest subjects that comes up as a real estate right Everybody has to have a place to live a house to live in, or even a commercial property. if you have a business. And obviously in the news what we've heard about is affordability, housing crisis. Right Can't afford a house.

Well, There are hundreds of thousands of homes that are out there. That are still affordable. there. A $200,000 house or under. Is still find-able.

Every market in the country has one within an hour. Houses on the coast. Beachfront communities. Houses with acreage five to 10 acre houses houses with large square footage four or 5,000 square foot houses. There are homes all over the country in every category that are under two.

grand Now granted. It might not be your dream home. All right You might if you want everything you're gonna have to spend more than 200 grand. But…

We search every single week. For examples of homes that are. 200 grand and under…

We have a theme of every episode. This might be houses that are 5,000 square feet. These are houses that are within five minutes of the beach. These are houses that are on waterfront. Always under 200 grand Now some of them might be smaller than you want Some of them might be fixer-uppers, they'll all will be livable We don't do any houses that are…condemned or you can't move in You can't start living in them.

We also don't do condos or land They have to be single family homes. So if you look at our website home sheep you'll find those. And we're not realtors are not trying to sell anything You can't pay us anything for this. This is just a place where we do research as part of our other. Businesses that we do.

And we find these houses and we…make you aware of. they exist and you can make your decision If they're the kind of houses you want to buy or not. Now what about when you're buying a house…

You need an inspection. And a lot of people when they purchase a piece of real estate they'll do their contract. They will. negotiate with the seller and then they'll call a home inspector to come check out that house. And in many states home inspection is a loosely…

Licensed or certified or regulated industry Pretty much anybody can say they're a home inspector and the spec the home, and they may charge you four or $500. They look around with a flashlight Did they see any cracks in the wall? Did they see any leaks and they write up a report and give it to you? But…

It's notoriously common…for home inspectors to miss…

Very significant…

Floss defects problems in the house Why is that Well, no one person is going to be an expert on everything about a house even if you're a general contractor. You are. not necessarily going to. No everything about every. Type of.

Home system. So a lot of times home inspectors or somebody who maybe worked in the building trade they know a little bit but they're not going to know everything And they miss stuff structural things all the time…

And there's disclaimers If you read their report, they'll say we disclaim all liability for all these things. And there's not much recourse if they miss something. New stories all the time had this So what do you do? Well, one strategy and we use this a lot in buying a property. Instead of calling a home inspector…

You have a contract on a house call five. Different. Specific tradespeople, you call an electrician. You call a plumber, you call an HVC person. You call a framing…

Expert framing contractor and call a painting company. My painting company. talk about that. Each one of those trades is an expert in their field. And sometimes you might have to pay him, you know payment an hour or two for their labor My cost a hundred bucks 200 bucks.

Sometimes you could just ask them look, I'm buying this house I want. A an estimate on the repairs that I'm going to need to pay for this house Just so I know what I'm getting into many companies. We'll give you free estimates That's all you're asking for is an estimate on the cost of repairs. You say look I'm going to buy this house. I want an estimate on the repairs and they'll come through and they'll say it needs a new outlet It needs a new.

You know circuit box whatever it is, the wiring is wrong and they give you an estimate Now you have an estimate Isn't that What a. And inspection is an estimate on repairs. You do the same thing for. Your plumbing. And they're going to look to see if there's any you know what needs to be fixed or plumbing.

The good thing about estimates is they're going to. Find everything. Did they could fix cause they want to make money. And an estimate. Right And they're experts.

A. And electrical. Licensed. Trades person. Is going to know more about electrical.

defects then even a general contractor, general contractors hire electricians to do the electrical. They know a little bit about it, but even if somebody was a retired licensed general contractor, The electrician that they hire to wire their houses is going to know more than they do So now you're getting. The tip of the spear of the actual expert. And then you can do the same thing for plumbing, HVC very important system in the house, the cooling and heating and air conditioning. If you want to have that dialed in and know what the estimate there to repair is.

People in industry love. To find things that are wrong we all do Right We all like to find fault We all like the judge. So if you get an expert. HPAC person to point out, oh this has done wrong And this is an old unit and this is wired the wrong way. People love doing that So it's not like it's gotta be hard to have them find stuff…

Same thing with framing. Framing person's going to come out and see that. You know if there's things that are misaligned or things that are out of whack, they'll find that. What about painting Why is painting? Contractor somebody who maybe it doesn't need paint.

That's true. But you gotta remember. Paint on a house on a property is the first line of defense especially on the exterior. If a painter comes out, they're going to be able to see is the caulking done properly Is there water intrusion? Are there places where the there's rot right Because painter see all that as part of their prep work.

And if you get a painter to come out and give you an estimate on repainting a house, They're going to notice these things They're going to notice more than you might imagine more than probably all of the other contractors put together because the paint is the envelope of the house inside and outside, and they're going to notice what's wrong with it So that might be a strategy. Four. Good a house evaluated that you're purchasing Now the tricky part is going to be getting a contractor. To be able to come out and do that Sometimes they're busy, but if you put some diligence into it you can probably…

find that to be done. Also part of. Buying any real estate commercial or residential is a title search. You want to make sure you get a title search done properly. And there's not just one type of title search as a current owner search a two owner search a 50 year search.

And depending upon the requirements of your lender. They may want certain types of searches You may want to do more than that. Some lenders only require a one-owner search which only searches from when the current owner bought the property. From that point forward. You may want to go back farther to make sure there's no hidden liens to make sure there's no ownership.

claims or conflicts. You may want to find out prior owners just for your own knowledge to see how that property was used before. And if there's any easements. Are there any encroachments? Those are things that sometimes on a title insurance policy which you'll normally get And we'll talk about that.

There may be exclusions for easements for HOA. Requirements for survey requirements. Anything that's on page One of exceptions of that title policy are excluded from your coverage So even if you have title insurance, There's a lot of things that are excluded from coverage And if those come up you're out of luck. Also when you buy a piece of real estate. Your lender If you have a mortgage.

Which many people do. Is going to say. This is a lender's policy It protects the lender…

So all that policy is going to do is if there's a problem with the title. And the. The title's found to be defective and the lender, their collateral for the loan is defective. They pay off the lender. So there are off the hook.

It doesn't give you your house. It doesn't. Protect you from the claims of that person let's say that property was part of a hundred acre farm 50 years ago And the farm was sold off to build houses and maybe the farmer died and their daughter was supposed to get an inheritance of that farm and they never did. And it was in the deed that they're supposed to get it. If that was overlooked, that daughter can come back and say I want all this property back, the title policy will protect you from that.

But if you only have a lender's policy. You're you're not going to have coverage. In fact some lenders policies. Again we're not attorneys giving legal advice You want to get this from the policy? Even if they pay off you still have to pay the mortgage It just protects the lender.

But now the title company owns the mortgage and you have to pay them your mortgage payments So that might be the worst of both worlds. Lose your house and you have to pay for it.

so a title search. Is part of that but a title insurance policy you'll also be offered in owner's policy on top of the law. policy and owner's policy, which sometimes in some jurisdictions it's customary. Four. The seller to provide that to the buyer in some jurisdictions it's not customary So make sure you understand the difference between the owner's policy and the lender's policy.

It's expensive. And some people say you don't need. An owner's policy or title policy…

Remember a title policy is a one-time payment It's not like insurance You pay every year Like your homeowners insurance or your auto insurance You don't have to pay it again over and over. It's a one-time payment. It's up to you whether or not you want to get it. I had a close friend asked me about this a couple of years ago and I said, you know for me if it's something it's your primary residence you have hundreds of thousands or millions of dollars in that residence. It may cost you a couple of grand.

Most of the time you're never going to need it. You know, Title insurance is the lowest payout policy. Of all insurance types. When…

Property insurance or auto insurance. Companies look at their rate structure. Whatever they take in and rates they pay out a very high percentage and claims. If you pay, if you pay $2,000 a year for your homeowners insurance. They may not pay it to you but all the premiums they take in they pay out more than half of it.

60 70% on claims. Right The other goes to profit and administration and everything else. They pay out a large percentage on claims. Title policies It's the opposite. They do searches and they prevent claims from happening.

So if they take in a hundred dollars in premiums, they. May only pay out $2 in claims. I think the, the last survey I saw for title policies was. Only three or 4% is paid out in claims So a title insurance claim is very rare but when that happens it's a big deal Cause you're threatened at losing your house…

Related to that are the zombie mortgages. And this is something. that was in the wall street journal. just this week. And…they said zombie mortgages could force some homeowners into foreclosure.

Homeowners say they're getting bills on second mortgage that they thought were taken care of. And by thought they were taken care of. It doesn't mean they were paid off their long dormant. They were made more these loans were made more than a decade ago in 2008. And what happened was these loans were what's called charged off.

Okay charged off and we get this a lot in the car title side too. charge off. It's not the same as a payoff, a charge off just means that. The lender said we're unlikely to get this money. The borrower fell behind and we don't believe we're kind of get paid.

So we take it off our books. In fact. Some financial accounting requires. That a lender…Remove non-performing assets from their book of business. If they don't think they're going to get paid off because here's the thing If you're a business and you have assets you have inventory you have vehicles you have buildings.

You're allowed to put those on What's called a balance sheet, which they those are assets. If you have a loan that's out there that people are paying, that's considered an asset So when you go for financing when you file your taxes you can say I own these assets This is what my business is worth. But if one of those assets, let's say if you have a car if it gets crushed, Right…

Then that asset doesn't exist anymore…

You have to take it off your books If you have a loan…

Which is not performing You may have to take that off your books…

That's a charge off. It doesn't mean it's paid off. It means that the bank takes it off their books. Now. The bank is still go back and try to collect it It just means that…it's unlike.

They're going to get the money. It doesn't mean they're giving up on it. Right. So what happened is these lenders sold these mortgages to investors for pennies on the dollar. And they sat out there for decades.

Collecting interest now that real estate has gone up in value. These investors are now. Trying to collect them And many times they're valid and they have to pay them back. So be aware that these loans are out there. And if you're an investor.

You know you may want to look at those as, as opportunities, if you are. A homeowner. You may want to see if you have a charged off loan on your, on your account two last things and then we'll, we'll call it quits for the day. one is electric vehicles…

There is a new…extra bonus. On a lecture cars with free money How much are we talking Well we know the federal government has 7,500 and some other, entities some…

utilities and local governments have more, but LA county orange county Riverside and San Bernardino will give residents up to $12,000 $12,000. to buy a fuel efficient vehicle. Right. Several specific criteria. you have to have a…household income That's not above a certain amount and depending on what it is it could be.

You know 148,000. And you must own the vehicle for 12 months. Before you apply for a title. So. There's money out there.

That's one thing. Last thing we'll talk about is a negotiating strategy This is a little bit of a teaser. for, an upcoming video. This has to do with companies that try to sell you something. If you are.

a business. And you are looking to buy any type of product service…

Advertising from anybody. A lot of times that…

Salesperson is going to tell you look all you gotta do is sell one more of your product and it pays for itself. And this is a trick question. But that's not really true And you want to use this as a negotiating strategy. Let's say if you have a company trying to sell you something for a thousand dollars whatever that is a thousand dollars consulting a thousand dollars a month for advertising a thousand dollars for whatever. And they say look.

Your product costs $500 If you sell two of your product, you made your money back and you broke Even you might say well gee that's true. I should be able to sell too, but that's not how it works. Your company probably has a profit margin. Like most companies, anywhere between 5% and 25% depending on what kind of business you have. But let's just say that you have a 20.

profit margin meaning that at the end of the month end of the year, all your revenues added up. You keep 20%. All your expenses take off of that. Payroll rent utilities insurance advertising. You take all those expenses out Cost of goods, cost of sales commissions.

At the end of the year end of the month. Your profit margin is. 20% So let's say if you have a $5 million revenue business at the end of the year you keep $1 million in net profit. The rest went to expenses. Great…

So now. If you. Buy something for a thousand dollars. How much do you have to sell? To earn back that thousand.

Well if you're operating on a 20% margin, you have to sell $5,000. Worth of goods or services. To earn the 20% that pays off that thousand. See how that works. So…

Now you have if you sell your product for 500 bucks, you have to sell 10 of those just to break even. For that thousand And of course you're not in business to break even because if you…sell that extra 10 and go through all that hassle to do it just to make back a thousand, you might as well not have done it because you didn't get ahead at all. So how much do you have to make to make that. That thousand dollars expense worthwhile. Maybe you want to.

Have an eight X or 10 X. Return on your investment. That means that you have to sell eight times the cost of that product or service So if it costs a thousand. You might want to sell 8,000. Times 20%.

That's 1600. From that 1600 you take out a thousand to pay for that. Expense you keep 600 more profit. You can tell your sales person that. If they say well what's your budget.

I don't have a budget. I don't have any constraints on budget. My budget is my return on investment So if you're selling me something for a thousand, you need to show me. How it's going to make me. An eight X return or a nine X return.

Why not much Well and you can explain to me your profit margin and also explain to them speculation because not every one of those $1,000 expenses is going to turn into a profit Some of them are just going to go away because you don't know there's no guarantee. So you have to build in a fudge factor, a little bit of

extra leeway to make sure that. It's worthwhile…

Eight X or nine X. You're the salesperson you tell me you show me how reasonably probably it's going to turn into that Granted. It's my responsibility to make it happen It's It's not your job to run my business, but you have to tell me at least…

How this is going to turn into a…

Eight X or nine X return on the money because here's my budget You asked me my budget as a sales person. I don't have a budget if it if it costs a million dollars, but it makes me 10 million in profit. I'm in, I can afford the million…

If it cost me $1, but it makes me zero. I don't have a budget for the dollar I can't afford the dollar I don't have a dollar I'm too poor to pay the dollar for something that makes me nothing. So now you put the salesperson in the driver's seat for you like advocating for you And you can say look, I'm going to sit back and you tell me. How does it make me eight X times whatever your thing costs are nine X. Right.

And you can tell them that's our process internally how we evaluate any expense. Multiplied times of factor…

Remembering that some of them are going to be more speculative if it's not. As clear that it's going to make that we might make it a 12 X if it's more risk involved, if it's more solid if your presentation can show me more clearly that it's going to make back my money maybe I'll accept an eight X maybe even a seven X. But if you can't show me clearly how this is going to work, I might need to pump up the numbers and make it a 12 X. So as negotiating or not even negotiating because look. If it's something that's going to be valuable to your business you want to buy it and you can tell them look I want to spend money to grow my business.

So you need to show me how this is going to help me grow my business…

Put your comments to let us know what are the. Subjects you'd like to talk about on the next. episode, keep an eye on describe TV…and also on. Actual human.com If you want to have some. live consultation.

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