Avoid these four pitfalls around the titles in flip transactions.


Today we’re talking about what you should do to avoid the top four pitfalls for the title side of flip transactions. We work with a lot of investors. It’s important that your title company knows who your investors are because investors come across a lot of crazy, hairy deals. After all, distressed properties are often the best opportunities.

1. Get the binder with the closing team of your choice on the way in. A binder is a short-term title policy for if you plan on selling the property in less than two years. Through it, you will get a reduction in the price when you go to sell it. You’ll have to work with the same team when you re-list, so ask to use your settlement services of choice when you buy the property. Most listing agents and sellers will let you do this.

2. Get your entity documents in order. It’s very important to make sure you have your LLC paperwork, your articles of organization, and who the managing members are because the title company will need to review that. Also, get your statement of information, especially with distressed properties. It allows us to have both the APN and social we’ll need to search through any possible issues.


“We were able to work through the LLC issues and still close the day of! “


3. Get a copy of the trust. We need this because it acts as a roadmap for us. It helps title companies review the property so that we don’t need to go into probate. If the property is in probate, then we’ll also need a copy of the trust.

4. Have your LLC in good standing. We’ve run into several deals this week where we had trouble closing because of this. Your signature means nothing if your LLC isn’t in good standing; you cannot do any sort of real estate transaction with it. However, in these deals, we were able to sort the issue out and still close the day of. Just another reason to work with an excellent title team.

If you have questions about this or anything else, don’t hesitate to give us a call. We’d love to help.