Sunday, April 28, 2013

Seven Reasons Why I Love Owner Financing

     Owner financing is so easy.  You don't have to fill out any papers.  You don't have to give the lender your social security number and past address and job history.  You just agree with the seller to pay him $500 per month until paid off.  How easy is that?  You don't need a calculator to figure out the payments.  If the seller is holding a mortgage for $60,000 at 5%, let's make the payments  $500 per month.  That is OK with the seller.  That is OK with the buyer.  How many months is that?  Who cares?  Owner financing is cool.  Read this,

     Another thing I like about owner financing is you can always change the terms later.  Let's say the seller has agreed to a $500 per month payment on the above described mortgage.  Thirty six months later Mr. Buyer is having cash flow problems.  Mr. Buyer calls his morgagee, Mr. Seller and asks if it will be OK if we lower the payments to $425 per month and extend the terms.  He says OK.  Mr. Buyer's cash flow just got $75 a month better.  OR thirty six months later Mr. Buyer calls Mr. Seller and suggests that if Mr. Seller will lower the interest rate from 5% to 4% , Mr Buyer will agree to raise the payments to $600 per month.  Why would Mr. Buyer want to do this?  He just saved 1% on his mortgage balance.  Why would Mr. Seller (mortgagee) want to do this?  He is getting an extra $100 per month. 

     Another reason I love owner financing is that you are never finished negotiating.  One of these days, Mr. Buyer is going to decide to sell the house.  When you have a loan from a bank, what do you do ?  You contact the bank and ask them how much is the payoff.  The bank says the payoff is $49872 plus daily interest until you pay the loan off.  When you owe the mortgage to the previous seller, you contact the seller and ask him, "If I paid you off this week, would you accept $40,000?".
He says," No but I will accept $44,000.".  I like that system better.  Another way to keep negotiating is to include a little note in with every payment asking the seller (mortgagee) if he ever wants to be paid off at a discount, call me ( buyer,mortgagor).   One day Mr. Seller might have a financial crisis and call and offer to accept $50,000 for the $60,000 that you owe him. 

     Another thing I like about owner financing is that you can move the mortgage to your new house.  In 1998, Kathy and I bought a house in Daytona Beach, Florida We put a few thousand dollars down and the owner held a mortgage for about $110,000.  We lived in that house.  In 2001, we wanted to move to Deland, a town about twenty miles away.  I called Marvin, the mortgagee ( a savey investor) and ask him if I could substitute the collateral of the house in Daytona Beach for the house in Deland.  He checked out the Deland house and said OK.  The house in Daytona Beach was worth  about $145,000.  We paid $175,000 for the house in Deland. We paid cash for the house in Deland.  We had no mortgage to pay off on the Daytona Beach house.   Marvin still had a first mortgage on the Deland house.  How could he go wrong?  I didn't have to beg the bank to loan me the money.  I didn't have to give anyone my social security number or job history.  I didn't have to pay $4000 in crapola fees.   This is a wonderful advantage of owner financing.  It helped that Marvin was a sophisticated investor and understood such things.  Even if he were not, I believe I could have explained this to him and his attorney and made this happen unless he was dying to be paid off.  If he were dying to be paid off, he would probably be open to a discount offer. 

     Did I mention that I had never been late with a payment to Marvin.  If you are making payments on an owner held mortgage, pay those payments on time even if your kids are hungry and crying.  Once you owe about five owner held mortgages, be certain that you make those payments on time.  When you are asking a stranger to hold a mortgage for you and he asks you,"How do I know you will pay me?".  Ask him to call any of these five people that you have been paying for several years. 

     Another thing I like about owner financing is that you can put subordination clause in purchase money mortgages if everyone agrees.  You can also put exculpatory clauses in purchase money mortgages if everyone agrees.  I went to a seminar many years ago.  The guru at the front of the room told us that, if we ask the seller to allow us to put a subordination clause in the mortgage, most would agree.  This is a clause where the seller (mortgagee) agrees that, at some later time, the mortgagor can place another mortgage ahead of this mortgage in priority.  This would turn a second mortgage into a third mortgage.  Developers do this all the time when they are buying vacant land to turn into a subdivision.  The same guru told us that we could put a exculpatory clause in our purchase money mortgages.  Many sellers would not object to that.  This is a clause that makes the buyer (mortgagor) NOT personally liable for the loan.  If he defaults, the mortgagee can not sue the mortgagor  personally for a deficiency judgement.  Both of those seemed like nifty ideas. 

     I used to go to seminars and read books and take my new found ideas and go out on the street to see if I could make them work.  A couple of weeks later, I bought a house.  I assumed the seller's first mortgage and he held a second purchase money mortgage for $12,000 with no payments and a seven year balloon.  We had a subordination clause that said we could put as much as 20% of the appraised value in front of the seller's mortgage at a later date.  We also had an exculpatory clause.

     When we got to closing two weeks later, I showed up.  Harry,the seller showed up.  I said,"Well I guess we can start the closing.".  Harry said," No,we have to wait for my attorney to show up.".  I started to feel a little queezy.  The attorney showed up.  He asked the title clerk for the paperwork.  He looked at the HUD 1.  He looked at the mortgage.  He looked astonished.  He said,"Harry, this mortgage has no payments."  Harry said," I know that".  The attorney said, "Harry, Ron can place another mortgage in front of you at a later time.".  Harry said, I know that,".  The attorney said, "Harry, if Ron defaults on this mortgage, you can't sue him for a deficiency judgement."  Harry said," Ron is not going to default.".  We closed.

     Six years later, Harry was paid off with interest.  Twelve years later, harry called me and listed his mother's house with me.  Harry told me that I was the only honest Realtor he knew.  I tell you this story to make this point.  People hold mortgages for buyers because they like the buyers and they perceive the buyers to be trustworthy.  Learn to build rapport and trust in all business relationships.  In getting people to hold a mortgage for you, this is critical. 

     Another reason I like owner held financing is that I can make deals that other people can't make.  When I was selling houses every day as a Realtor, I used to call expired listings.  If you sell real estate, you should call expired listings.  That is another article. 

     I went out one day to see this expired listing on Edland street in Orlando.  This house had been for sale for twelve months.  It had been listed with a small Realtor for six months and it had been listed with a big Realtor for six months.  The big Realtor's listing had expired yesterday at $85,000.  This house was in a neighborhood of 1100 square foot houses.  The comps in the neighborhood was low $60's .  This house seemed to be overpriced. This house was 2400 square feet.  The owner had lived in it for 27 years.  He had expanded it in every direction.  The family room was larger than most of the houses on the street.  The reason the seller was selling was that he bought a 100 foot yacht.  It was parked at the Sanford marina and he was going to live on the yacht.  Do you know what a 100 foot yacht costs?  The house on Edland street was free and clear.  I was there to list the house and earn a commission.  I asked the owner if he would hold a mortgage for the buyer?  He asked me what that meant.  I explained that the buyer puts down a few thousand dollars as a down payment and makes payments directly to him, the seller.  He asked me could he get interest.  I assured him he could.  Twelve days later we are sitting at the closing table.  In twelve months, no Realtor had made an offer on that house with the owner holding the mortgage .  Why?  It is a mystery to me.  It is a safe bet that the Realtor that had it listed doesn't understand owner financing.  The seller doesn't understand.  Your Realtor probably doesn't understand.  You Mr. Buyer have to be the one to understand. 

     When you are looking at houses, your first question should be,"What is the price?".  Your second question should be, "Will you hold a mortgage?".  Read my article,"Seven Reasons The Seller Should Hold A Mortgage".  The link is above.  Owner financing is the best way to finance.  If the owner won't finance it, find another property to buy.

     If we can help,


Friday, April 26, 2013

If You Are Not Making Enough Money Selling Real Estate

     Let's get back to the basics.  You have to prospect.  Either prospects are calling you or you have to call them.  Is your phone ringing?  If it is not,start dialing or start figuring out a way to make your phone ring. 

     If spending money to make the phone ring comes to mind, belay that plan.  You don't spend money when you need money.  You spend money when you have excess money.  Right now you have excess time.  What are you doing with your time?

     You need prospects.  Call today's expired listings.  What are you doing with all of your time?  The sun comes up at seven.  Are you dressed?  Are you in the office?  Do you know how to run the expired off the computer?  What are you waiting for?  They are going to list with someone TODAY.  What if you called them at 8.01 AM before your competitor got out of bed?  I will bet Mr. Expired would list with you.  I am sure he would if you can make a dynomite listing presentation.  Can you? 

   If you can not make a super listing presentation, what do you need?  You need practice.  Go practice your mediocre listing presentation on one of today's expireds.  Call them.  Don't tell them that your presentation is going to be mediocre.  Call Mr. Expired and say something like,"Hi Mr. Expired. I see that your house has expired in the MLS.  I'd like to come show how XYZ Realty can get your house sold quickly.  Would noon be a good time or would four be better? 

     In Orlando, there is about twenty expireds every day.  Could this approach fail twenty times in one day?  I think not.  It helps if you said the above with a hint of enthusiasm in your voice.  If went out to practice your presentation.  You didn't expect Mr. Expired to list with you.  You just needed an audience to practice that mediocre listing presentation on.  If you did this once a day for a few months, that listing presentation just might improve. 

     When I was young, I sold cars at a Buick store.  When the sales manager walked by and asked me what I was doing, I always replied, "Looking for a laydown ,Boss".  In the sales industry, laydown is a jargon term for an easy customer, the ones that Bozo the clown could sell.  The laydowns in the real estate industry are in today's expired.  They are going to list with some Realtor today.  It might as well be you.  Pick up the phone and call an expired today.  If you are still not sure what to say,      watch this video.

     If we can help,


Friday, April 19, 2013

Can You Help Me Pass The Florida Real Estate Exam?

     You have finished your online Florida real estate course exam   from the gyspsy real estate school in another state.  You think you are ready for the Florida real estate exam.  You stroll down to the Pearson Vue test center and pay your $31.50 to take The Florida real estate exam. You walk out three hours later with a "60".  That is a failing grade. 

     I hope you remembered to keep your certificate from gypsy real estate school.  You are going to need it to get back in the exam for the second time. The pass rate for the second time takers in March 2013  is 24%.  If you don't know about this, read this 

     You need all the help you can get.  How did you do on the the math portion of the Florida real estate exam?  We can help with that at Climer School of Real Estate.  We have nine free real estate math videos posted on You Tube.  Our user name is Climer School.  You can go there and watch all nine of these free videos.  If you did not get ten out of ten on the math portion, watch all nine of these videos.  It will help you pass the Florida real estate exam. 

     What else can we do to help you pass the Florida real estate exam.  Have you taken our one hundred question practice exam that is on our website at ?  If not, take it.  It is free.  It will tell you if you are ready for the Florida real estate exam.  If you pass my practice exam, you are ready for the Florida real estate exam.  If you fail my practice exam, keep studying. 

     Watch my You Tube video about committe's deed.  That is a new question that just showed up on the Florida real estate exam.  If you haven't read the state exam breakdown in the "Candidates Handbook", read it.  The "Candidate's Handbook" is free.  If you don't have one, call Kathy.  She will send you a free copy.  Kethy's number is 407 822 3926. 

Monday, April 8, 2013

Florida Real Estate Exam. Pearson Vue's New Rule

     Here is the new rule at Pearson Vue's test center for the Florida real estate exam.  When you show up to take the Florida real estate exam, you must have a copy of your certificate from the real estate school that you attended to take FREC 1.  That is the rule.  That seems like a simple rule.  Does that mean, if I am showing up for the second time, I have  to bring a copy of my certificate?  The information that I am getting from my students that have taken the test more than once is YES.

     I strongly suggest that before you show up for the second time, that you be certain you understand this rule.  You can contact the Pearson Vue test center at 888 238 8232.  You do not want to have the rule explained to you when you show up to take your Florida real estate exam.  If the clerks says you are not coming in, you are not coming in.  Good bye $31.50.

     At Climer School of Real Estate, we only give you one copy of your certificate.  We urge you to make a copy of it.  We don't give you but one copy.  In the unlikely event that one of my students fails the Florida real estate exam, unless that student had made a copy of their certificate, they would not have a copy to present to the Pearson Vue clerk at the door of  the exam on their second visit.  Does it make sense to you that the clerk can not tell that you have been to the exam once already?   What can you do?  Here is my best advice.  Make a copy of your certificate from your real estate school and take it with you on your second visit to Pearson Vue.  That is my best advice.  Here is my second best advice.  Take your failure notice from your first visit with you.  If you don't have your certificate or your failure notice with you, how could the clerk know that you have taken the required course?  You could depend on the clerk to access the Pearson Vue records and ascertain that you are qualified.  The clerk could tell you that she is sorry that you did not understand the rules.  Thank you for the $31.50.  Call the test center number and reschedule.

      In conclusion;  Take a copy of your real estate school certificate with you every time you go to Pearson Vue.  It costs $31.50 every time you make an appointment.

     If we can help,


Sunday, April 7, 2013

Florida Real Estate Exam, Dismal Pass Rate For March 2013

     In Febuary 2013, The Department of Business and Professional Regulation made major changes to the Florida real estate exam given by Pearson Vue.  In March 2013, one thousand one hundred and real estate sales associates applicants took the Florida real estate exam for the first time.  Three hundred and seven of those applicants passed.  That is a pass rate of twenty seven per cent.  Eight hundred and thirty nine people went home disappointed.  All of these people paid $31.50 for the experience. 

     One thousand eight hundred and two people attempted the Florida real estate exam for the second,third, fourth of fifth time.  Pearson Vue got $31.50 from all of them.  Four hundred and twenty eight passed.  That is a twenty four per cent pass rate. 

     What does this mean?  This means if you went to a top notch real estate school and you study diligently, you have a good chance of passing.  If you went to a real estate school that really did not do a good job of preparing you for the Florida real estate exam, you are in trouble.  If you cheated on your on line test by using your notes while you took the final exam, you can not do that on the Florida real estate exam.  If you have been rather lackadalsical with your studying since you passed your real estate class, don't plan on passing on your first try.

     Many people take their online real estate school from a real estate school that is not in Florida.  They learn a bunch of stuff that would help if they were taking some sort of national test.  Florida does not use a national test.  We only have the Florida real estate exam.  This is one of the toughest real estate exams in the USA.  You need to be certain you are studying Florida real estate material.

    At Climer School of Real Estate, we use,as our textbook, Linda Crawford's, "Principles and Practices of Real Estate".  There is no better textbook available.  We also encourage our students to buy Linda's "Exam Manual" For more detail, watch this video   This is an essential study aid for passing the Florida  real estae exam the first time.  It cost $31.50 every time you take the Florida real estate exam.  Here is a interesting study aid.  If you fail the Florida real estate test, you can pay a few dollars and go review the test that you failed.  If you decide to do this, let me give you a little tip.  Put a legal pad on the seat of the car.  As soon as you get out of the review write down as many of the questions as you can remember.  Obviously, they won't let you take notes.

     At Climer School of Real Estate, most of our students watch all nine of the real estate math videos.  It is free.  It is on You Tube.  Our user name is Climer School.  There are four of these videos where I am wearing a red shirt. This is me teaching chapter fourteen out of Linda Crawford's tesxtbook.  The videos where I am wearing the Hawaiian shirt is the homework from the textbook.  If you are attending a real estate school where they use Linda's textbook, follow along. 

       If you are taking the test soon, take time to look at the break down of what is on the Florida real estate exam that is in the "Florida Candidates Handbook".  If you don't have the handbook, call Kathy at 407 822 3926.  She will email it to you for free. 

     If you want to know if you are ready for the Florida real estate exam, take my FREE practice exam on my website at .  You can practice or my free test or you can pay $31.50 to go practice on Pearson Vue's.  Do mine first.   Contact us if we can help.         

Thursday, April 4, 2013

Buy Discount Mortgages For Fun And Profit

     A lot of people that come to Climer School of Real Estate to  get their Florida real estate license are struggling to make a living.  Getting into real estate is an escape from a payday to payday living for them.

     We also have students that are not struggling.  They have money in the bank.  The problem with money in the bank is that the bank does not pay you much interest in 2013. 

     In our pre license real estate class, we hardly ever mention buying owner held mortgages at a discount.  We never mention it because it is not on the Florida real estate exam.   I often have students during breaks and lunch discuss this lucrative investment opportunity. 

     Buying discount mortgages is certainly not risk free.  It is so lucrative that it is worth investigating if you have a few dollars to invest.  People are constantly selling real estate and holding mortgages.  Read my article.  As long as there is real estate, there will be people holding mortgages.  Often, what seemed like a good idea five years ago does not seem quite as cool five years later.  Many people decide to sell their mortgage at a discount.  If someone were holding a mortgage with a balance of $10,000 with 120 months left at 111.02 per month, and they decided they would rather have some cash.  That 111.02 per month just doesn't seem as exciting as it was five years ago when our hero agreed to hold this mortgage. 

     If you contacted this person or he contacted you and you offered him $7000 cash today.  He accepted that.  He assigned the mortgage to you.  He can buy himself a boat or a motorcycle that he has been yearning for.  You are getting a fourteen per cent return on your investment. 

     This is not complicated.  It is not quite as easy s reading a this article.  Anyone that sells real estate for a living will run across plenty of opportunities to buy mortgages at a discount.  The next time that an opportunity presents itself, go for it. Buy it.  Fourteen per cent is better than one per cent.  Take some time and effort and learn more about buying and trading discount mortgages.  The better you understand real estate, the easier it is to sell real estate.  Knowledge is power.
     If we can help......

Tax Certificates, A Wonderful Investment.

     Do you have a few shekels that you would like to invest?  Maybe you have a hundred dollars.  Maybe you have a  hundred thousand dollars.  Whichever is closer to your truth, here is a golden opportunity.

     Property taxes in Florida are delinquent on April first.  Shortly after that date, in every county in Florida there is a tax certificate auction.  At the tax certificate auction, the county tax collector auctions off a certificate for the amount of the taxes.  The price is the amount of the taxes.  What you are bidding on is the interest rate that you will accept.  The bidding starts at eighteen per cent and bids down .

     Here is an example.  A British gentleman comes to central Florida and pays cash for a vacation house.  He goes back to the UK.  When he gets back to the UK, he moves his residence and fails to file a forwarding address with the post office.  For whatever reason, he doesn't pay his 2012 property taxes. His taxes are $1000.  His taxes become delinquent on April 1 2013.   On May 31, 2013 you bid on his tax certificate.  You are the low bidder.  You pay the county tax collector the thousand dollars and you get a tax certificate.  If there are any liens on the house, property taxes are superior to all other liens.  Let's assume you won the bid at six percent. 

     A year goes by.  Mr. British does not pay his taxes.  Another year goes by.  He still has not paid his taxes.  Three years go by.  He has still not paid his taxes.  You are accruing interest at a rate of six per cent.  Another year goes by.  Another year goes by.  Mr British decides to sell his house.  He finds a buyer.  When the closing attorney does a title search, he discovers that the taxes have not been paid for five  years.  Mr British pays his taxes now and you get your thousand dollars plus six per cent interest for five  years from the tax collector.  This is not the most liquid investment that you can find.  It is very safe.  It is safer than the stock market.  If you want more detail in Florida . 

     The delinquent list for 2012 will be in the Orlando Sentinel on May 13, 2013 and May 20, 2013 and May 27, 2013.  Buy some tax certificates.  You can buy one for fifty dollars or you can buy one for fifty thousand dollars.  Different counties have different times.  Check in your county. 

     In Florida you can only hold a tax certificate for seven years.  After you have owned the certificate for two years, you can request that the tax collector, foreclose on the property.  When that happens the property is sold to the highest bidder for cash at a tax deed auction.  You can bid if you like.  Whether you bid or not, you tax certificate plus interest will be paid to you by the tax collector. 

     This is the time of year for buying a tax certificate.  Contact your tax collector.  Get the details. Go buy some certificates.  Your stock broker is the only person that won't like this idea.

     If we can help......

Monday, April 1, 2013

Attention Realtors, April First Is Here

     What does April first mean to Realtors.  It means that many real estate licenses expired yesterday.  It means that many Realtors do not have a valid Florida real estate license today. 

     Sales managers, ask your sales associates to look at their Florida real  estate license.  The expiration date is on the license.  Twenty five per cent of all Florida real estate license have an expiration date of March 31st.  If you have not read my article,"The $12,500 Idea", you need to read it.  You certainly do not want to be on the wrong end of that story. 

     Not paying attention to your Florida real estate license's expiration date can be an expensive mistake.  What if some seller refused to pay you a commission?   You would have to sue that seller.  The first thing the seller's attorney is going to ask is,"Do you have a valid Florida real estate license?"  It could be an expensive mistake to let your real estate license expire. Look at your license right now.  Your expiration date is on the license. 

     If we can help you, contact us at .