real estate
tuesday april 13 2010
page 172

security deposit and unlawful detainer
sale leaseback

perfect to build bldg to specs
ad then find an investor who wants a long term tenant.  sell to invest
both tax write off
get money to grow the business
lease property back

talk to tax atty
advantageous for both parties

sells to leasor
leasee
lease purchase optio involves a contract
with a oneyear option to purchase
not a valid contract without extra consideration
graduated lease
to keep up with inflation
over 1000%
clearly some will
a graduated lease will

eleventh LA
CPI
London
any # of indexes you can use
at least 2-4% a year.

200/month when
mkt val is 2000/mo

gross lease is what we are familiar with.
a net lease tenant is paying some or all of the expenses.
paying as insurance.
plumbing doesn't work.
adequately insured.
taxes and operating expenses

control over maitnance and operating expenses

neyt lease common

with a percentage lease
common in retail
share of net prof or gross prof so
landlord does promos to have higher prof.
pay a certain floor and a percentage based on income and sales
trouble:  audit to make sure profit not hidden

many malls operate this way increase tenant flow by prom
fashion island

carolers
decorate fix up nicely
percentage leases not only in retail properties

consumer price index
inflationary factor

a license is similar to an easement
real property license is short term

a license
revocable
sorry we are at capacity
they don't have to let you in

license can be revoked at any time
scalping illegal

non-transferable
law enforcement can crack down if want to get hard-nosed

property management
brokers
real estate fourteen

a full semester of property management
not tested on the broker exam.
but if going into prop mgmt

degree in real estate
can manage with no license at all
keep house
rent it out
how screen tenants
dont know anything about it
not the owner

as resident manager
look after it for the owner.
do not need a license.
do if off-site.

property mangagement to act as a buffer.
maitenance and inspections

CAR
sales
professional orgs
IREM
best known
under auspices of NAR
designation for property management
certified property management
certified

managed apt. during law school---duffy learned RE and supported self during law school

broker's license
before get to chapter seven.


chapter seven
escrow and title
impt to make sure you get paid

dept of real estate
RE 11 once a year
you can make a career of escrow
thirty story high rise
anybody can start an escrow company
five years of experience

no license and control
arguably it should be
big picture person
pro-ration to the penny
prepares the deed
makes sure title insurance policy proper
pest control in timely manner

detail oriented highly organized person.
who has escrow
escrow used as the process
as title

escrow not required

atty at law deals with in many states
in CA due to the goldrush
the attys were so swamped that the y opened it up

bar treaty
only countries can make not states
CA can do escrow but if legal advice needed
must seek counsel
five yrs exp all needed to start own escrow
attys don't usually get involved
in terms of law requiring

escrow officer is a neutral third party
what kind of title insurance

purchase contract
dual agent is
as agent of buyer and the seller
acts as this neutral third party
as a wager

escrow hold s the stakes
buyer doesnt get title till close of escrow.
if it weren't for escrow it would have to happen in an open place
the neutral third party
cannot transfer to the buyer until all the conditions set forth
purchase agreement and joint escrow agreement
binding parties

escrow officer will not do the work.
until all spelled out in the contract.
if not fulfilled

deal breaker
set forth in contract
almost always bc of the money

many times
before downturn
sellers would not give time to anyone not prequalified for a loan
money is the most difficult part of the deal.

real estate finance
two chapters
pregnant wild duck
environmentalists held up escrow

if there is a loan
no lender makes a loan unless there is a private lender
it is negotiable
once in a while it is
unless you look at the escrow
in a ten thirty one exchange

probate process get s supervised by the state the largest
violated fiduciary duty to the seller

go between btw officer and seller
working thru sales broker
escrow officer
can be a corporation
can also be a title insurance corporation
unlicensed escrow officer
third one a real estate broker can also do escrow
as friendly competitors
when business is a little slow then steer biz to you?
tit for tat?
makes perfect sense
but you cant do escrow as a broker
impratible
i fought hard for the seeller and then become the neutral seller
impossible to be neutral
brokers dont usually do escrow except in smll twns

and as an independent corp must disclose profits
not common and not a good idea
bottom of 187

binding contract
other than preparing contract
call title insurance company
if title not signed
escrow company has to deal with it.

then order the preliminary title insurance

typical escrow could be ninety days
no limit on when it has to close
rare exception
two weeks
thirty days
thirty forty sixty days
once prelim title report in
by april the 20th
title officer
with pest controla nd inspection
typically on a property there is an existing loan
contact
actual number of days to prorate
escrow officers job
buyers purch price

pay off that loan
get a satisfaction from the trustee and get an existing loan
the financing offer
then determine if
title transfer
the lien is subject

make sure removed
before title
institution lender
promissory loan
a lot of times
you prepare the promissory note

talk about in the finance chapter
a lot of these things going on simultaneously
keeping track

unless have a good system
not necessarily in this order
it is the escrow off that does the prorate

one day to close without owing property tax
you can close
without prorate prop tax
july 1
either buyer owes the seller or seller owes the buyer

taxes run jul 1-june 30
fiscal year
proprate the rents
the insurance
casualty policy must be prorated
any income
close escrow on the thirteenth
escrow companies in the business of  closing the policies and see who gets back what

the escrow officer does not do the title recording

the trust deed
th egrant recording
the escrow officer
broker comission
title company gets paid
existing lender gets paid
the buyer gets paid
people are happier when they get money back---ask higher for the fees then return
more when we get to the prorate chapter
page 188

interpleader the worst thing that can happen with re
sues buyer and seller for the breach of instruction
escrow officer backs out and lets them fight it out in ct.

esc. officer is a neutral first party
they never take sides
sue both the buyer and the seller
once the lawsuit is filed they fight it out in ct
the ct pays the money they have
they only have money from whom?

in escrow
typically the buyer's money, the seller's money the pest control
closing expenses
deduct turn rest of money to ct

could take two yrs to see who gets it
tied up in ct
lose-lose except for the attys who get paid
escrow officer files interpleader

escrow running late
or dispute for quality.