I got behind the desk as an escro officer. It is a whole different world. Completely different. It’s like you

don’t want to see how the sausage is made. Some in the state of Texas. If you die

without a will, Texas has a will for you. Somebody dies without a will. All of their interest goes somewhere.

Sometimes those kids are in prison. Sometimes those kids are in another country. Sometimes they’re estranged. And we’ve got to go find these missing

heirs. As an investor, you get a relationship with an escro officer. This person will make your life so much

easier. [Music]

Welcome back to the Hybrid Real Estate Professional Podcast, the show where we help you build a life of abundance through real estate and small business

investing without compromising what matters most. Today’s guest is my friend Andy Hemings from Capital Title, where

his role is to help get real estate transactions closed the right way while serving as a resource to address

questions before, during, and after the transaction. Andy’s been in and around the real estate industry for decades in

a variety of capacities. Starting as a licensed broker in the late 90s, an escrow officer more recently, and a

hands-on investor across single family, small, multif family, and light commercial along the way. He now invests

passively in syndications and brings a unique perspective, having seen deals from both sides of the closing table.

And on top of it all, he is a proud father and husband and a very generous human being who goes out of his way to

add value to those around him. Andy, welcome to the show. I’m glad to have you here.

Thank you. That made me uh made me tired listening to all that. Wow. Done a lot. Yeah. No, I really appreciate appreciate

being here. I know we’ve just recently met and I was so happy to meet you and I

love hearing your story. Got a fantastic story. And congratulations on your recent uh successful acquisition and

closing. Yeah, thank you so much. like you said, we met recently, but I feel like we we hit it off very well and I can tell kind

of the the type of person you are and um like I I meant what I said in the intro, you go out of your way to, you know,

educate others and provide your perspective and that’s what this show is all about. So, um I was excited to have

you on. Appreciate it. Yeah. So, there are a few different, you know, layers we can peel back here, but

I think it would be great to start with just kind of your core, your current job at Capital Title and spend a little time

on some of the kind of key concepts that investors should know uh that they might not. And I’ll I’ll include myself in

that category because admittedly, as long as I’ve been doing real estate, which is not that long, but um you know,

I’m about eight years into it. And I would say title is kind of one of my biggest blind spots. Um, I know enough

to be dangerous and enough to keep the lights on. Um, but I’m sure there’s a lot I don’t know, too. So, um, let’s

start with like what is a title company’s role in a real estate transaction and and maybe, um, we can we

can dig in from there. Sure. Sure. You know, it just a quick backdrop to further eliminate what you

just mentioned. I was a real estate broker for for 20 years. I sold real estate and so I raised my family had a

wonderful career loved it and then there came a point where the kids were grown

were were moved out and I wanted a more stable uh work schedule and um you know

when you sell real estate you work all the time and and I and I loved it like I say it was it was wonderful but I I

wanted I wanted a more stable predictable schedule and so um as fate

would have it a friend of mine was running a local title company and He brought me in as an escrow officer. Now,

keep in mind, I’ve been selling real estate for 20 years. I had a local real estate school. I had a CE school where I

would teach realtors about real estate. I mean, I I knew my stuff, right? You tell you what, I got behind the desk as

an escro officer. It is a whole different world, completely different. And just to to your point there, there’s

just so much that happens behind the scenes at a title company that you just don’t know about and you probably never

will know about. It’s like you don’t want to see how the sausage is made. So, so in it, it was really eye opening me

eye opening to me when I started working as an escrow officer and just all of the

work that goes into making sure that not only does that the transaction closes,

but that it is a property that the buyer can feel uh feel comfortable and

confident in purchasing. that there’s not going to be anything that comes back on them in a legal from a legal

standpoint, let’s say to make it simple, whether it be leans or prior ownership interests or something like that. So,

that’s one of the main roles of the title company is we do deep research on

the ownership history of the property. We pull any document that’s been recorded that relates to the property

and uh we then issue basically what’s called a what’s it called a title

commitment. Think of it as a research paper for the property and it’ll list any leans that are associated with the

property. It’ll list any uh potential it’ll list who is legally entitled to

the property. Sometimes you think you’re dealing with the person that owns the property. That’s not always the case. There’s more

people involved. And and it really it it really goes down goes back to there’s a

lot of different ways that someone can acquire interest in a property. They can get it through a, you know, through transfer of ownership in a deed. Simple,

right? They can get it through a divorce. They can get it through airship. And so these all of these

different ways that a person acquires ownership interest in a property um has

a direct impact on how that closing flows and how how it happens. And so

that’s that’s a that is a big part of what we do right there. And then of course another big part we look for any

leans associated with the property whether it be a mortgage lean, judgment lean, tax lean and all those have to be

satisfied before closing because when it closes we issue what’s

called a title insurance policy. We’re on the hook. Okay. and the buyer can

then know that all right if anything pops up in the future that was an issue prior to closing that

title policy will cover it and so title insurance is unique in that regard in that it is backwards looking instead of

forward facing like a home home insurance auto insurance you’re insuring against things that might happen title

insurance looks backwards we’re insuring uh about things that from the past

So, um, that’s that’s what the title policy is all about. And title insurance has been, you know, been around since

the, you know, midish 1800s. And before that, people when you bought a property,

it was it was buyer beware. It was buyer beware. You you just there was no guarantee that what you were buying, you

actually uh had full ownership interest in it. That is a very quick and dirty uh

not dirty, but a very quick summation of what title insurance is. Now, there’s a a lot of other things that we do that go

into it we can kind of unpack, but in essence, that’s what we do. Yeah. No, that’s a really good overview.

And what’s interesting, you know, I look back at the first property we bought. It was not a rental property. My wife and

I, we we bought it just as a primary, and it was the first time we’d ever gone through a mortgage transaction. There’s

paperwork flying back and forth between your loan officer. There’s Yeah. A title company got looped in at some point, but

I didn’t really know what they were doing. you know, I showed up there to sign the documents at the closing and there was 100, you know, plus pages to

sign. There were deeds, there were notes, there were title, you know, policies. There was, you know, all sort

applications. And you’re kind of just like, when I think about now, it’s a lot of new stuff at once, especially when

you’re new to real estate. And it’s really virtually impossible to self-educate, you know, in one single

transaction when there’s that many new things. So, I guess my where I’m going with it is, you know, what

why is it such a um afterthought in general when you when you look at real estate education and when you look at

the different things that people are learning about? I feel like title is pretty far down the list of things that people go out of their way to learn the

intricacies of. Why do you think that is? And um and maybe what what you know, should it be a higher priority than it

is? I think that that’s a great question and I I I think that the assumption is that

the deal it it’s it’s going like it’s got it’s going to close like the title

you it’s it’s going to happen and the due diligence that

mo that buyers go through they they’ve got the due diligence with with their loan with the loan process they’ve got

to work with the loan officer directly right got to check their income, got to, you know, check their their their debt.

They go through the whole loan application process. So, the buyer is directly involved in that process.

Buyer’s also directly involved in the due diligence on the condition of the home. Got to get your home inspection,

make sure that that happens, right? They don’t even think about title. Why do you think about title? Heck, the title

company, you just go there. They’re the people that just put the throw the papers in front of you and you sign them. That’s all they care to know about

until um there’s a problem that pops up. That’s when you generally learn about

what happens at the title company is when a is when a problem uh pops up. And I don’t know, Erin, it’s you know,

there’s there’s certain common issues that that do tend to happen that I think

is I think it’s definitely good for real estate agents to know about, but as a buyer or or a seller, I don’t know.

There’s just there’s just so much that’s involved in it. It would be impossible to know to know everything. And so with

with an inspection, it’s a it’s a pretty defined um uh parameters on what you do. You

have a home inspection. With a loan application, it’s pretty defined parameters. You fill out this application and they check everything

out. With the title process, there are so many different things that can happen. It’s literally impossible to

educate someone on on everything. you know, one of the um uh a couple of the

the the main issues that happen that that prevent a deal from closing or at

least delay the deal. Now, with with this said, most all deals, we can get them closed

with enough time and sometimes some money too to get legal work done to clear up the title. we can get it

closed. But the most common thing that it definitely from a residential uh side

and sometimes on a on a commercial side too would be um airship issues. Somebody

dies without a will, right? Somebody dies without a will. And now that person

that died, all of their interest goes somewhere. It either goes to their spouse or it goes to their children from

a from a prior marriage. And that’s when problems really develop as they didn’t have a will, they died. They had

children from prior marriage. Now all their interest goes to those kids. Sometimes those kids are in prison. Sometimes those kids are in another

country. Sometimes they’re estranged. And we’ve got to go find these missing heirs and get them to sign. And then we

have to break it to the surviving spouse. Hey, that that half interest is

not coming to you. It’s going to those kids that you don’t like and you don’t know where they are. Uh so that’s

probably one of the main things that happens that kind of fouls up a closing, if you will. Uh sometimes there’s big

things like tax leans. The uh the owner did not pay their income taxes and the

IRS will file a lean. And I mean I’ve seen deals where there’s hundreds and hundreds and hundreds of thousands of

dollars of tax leans on a property that the sales proceeds are not going to

they’re not going to satisfy the you know that lean. So we’ve got to work with the IRS get a partial release of

lean that def definitely delays things. Um, so that’s just a couple of the, you

know, just kind of some big things to to be aware of. Beyond that, there’s just so many different potential fail points

that can happen. Most of the times things go smoothly, but those are a couple of big ones. And I will say this,

Aaron, that depend, you know, from an investor’s standpoint, depending on the type of the type of investment,

the title issues are going to be completely different. For instance, let me give you the the goal the the

opposite ends of the spectrum. If you’re if you are a wholesaler, you know, you heard of wholesalers, right? Your issues

are going to be airship issues because you’re dealing with distressed properties. You’re going out, you’re digging up these properties. More than

half the time, they are going to have uh problems in the chain of title from an ownership standpoint. I mean, they’re

just the titles are just dirty, right? And they got to be cleaned up. On the opposite end of the spectrum, let’s say

you’re doing a development. Let’s say you’re buying an apartment complex. You’re not really going to have you’re dealing with a business entity and

you’re not going to really have any airship issues or anything like that or very very rarely. So, the issues on that

end may be something uh completely, you know, completely different. Uh there might be a judgment against the owner

that’s got to be cleared up or something like that. Uh that would be a real real common one. uh or if it’s a development

deal, there may be some easements going across the property that are going to potentially affect the buyer’s intended

use of the property. Completely different than the other end. So, depending on where you are on that

investment spectrum, you’re going to run into some different issues. I’m learning a thing or two about uh

easements running through properties on developments in real time. So, uh that one hit home for sure. But, no, it’s

interesting to hear hear that whole spectrum and and you’re right, like the context matters. Um, and me and my wife

buying a primary home where largely like our agent, the lender, and the title

company are going to do most of this work for us. You’re right, maybe it’s not that super important that we get

really deep into the researching all the title because largely those issues will be surfaced to us

by the professionals that are in charge of it. But if you’re out there hunting offmarket deals or wholesaling or going

after distressed properties, well, those you might be able to buy them at a discount, but you’re going to have to clean up whatever baggage comes with

them. And most likely, they’re going to have these unconventional situations. And so maybe it’s with the level of

complexity of the deal or the different profiles of property that you’re going after,

that’s when you probably need to spend time really educating yourself on um on those risks. But what’s interesting

about kind of some of the stuff you’re saying is that the title company, assuming it’s a, you know, good, reputable title company, you’re

providing it as a service, right? Like you’re going to uncover the issues and likely at least have some idea how to

fix it, if not be able to go fix it for a buyer or a seller. And um I guess like

what is the extent? So you mentioned tax leans. There could be hundreds of thousands of dollars of tax leans. Do

you help clear that up or do you just say, “Hey, this is a problem and you’re gonna have this is a liability you’re going to have to assume with the

purchase of this property.” Like what what is the actual interaction in a scenario like that? Another excellent question. All right.

So, we work on a contingency basis, if you will. All right. We don’t get paid

till the deal closes, you know, so it’s in it’s in our interest to get the to get the deal closed, but we’re gonna we

are going to make sure that it’s all of the issues are cleared up. issues that could be a potential claim against the

title policy, but we’re going to do everything we can within reason to get it closed.

You mentioned tax lean, so let’s take that one. That’s a that’s a fairly easy one to explain at least. Whenever you

have an IRS lean on the property, it’s really the seller’s responsibility to

work with the IRS and get it cleared up. But let’s think about that. you’re

just to I don’t know how to put it uh lightly, but you’re dealing with a person who doesn’t pay their taxes.

They’re not the most responsible individual. They’re not somebody you can count on to follow through on doing what needs to be done. That’s the truth of

the matter. So, we end up having to drive the ship a bit more to get it

done. Now, there’s and so in that situation, we have to get the seller to

sign a document to the IRS that authorizes us to communicate on their behalf. There’s a name for the form. I

can’t think of it right now, but that that’s what it does. Basically, the seller has to give us authorization, has to uh give authorization to the IRS for

us to communicate with them. And from there, we can steer the ship a bit better and and bring it home. But until

that point, until we have that authorization, there’s nothing we can do. There’s one example. Another example

is I mentioned that sometimes there’s a person who was entitled that deceit that

died without a will. In the state of Texas, if you die without a will, Texas

has a will for you. And it’s called the law of descent and distribution. And it’s it’s a it’s it is it is a

statutory um process by which that owner’s interest that that died where

their interest goes to. and the first is to their kids. So, we do what we can. First of all, we

educate them on, hey, this is what’s going on. So, we have to be the bearer of bad news. We get that title

commitment back. We do that research. We find out, okay, here’s a person that was entitled. They died. They didn’t have a will. First, we have to educate them on

this is what’s happening. A lot of times that’s quite shocking to to pe to to the

seller, the surviving spouse, that they’re losing half the interest in the property. Sometimes it’s shocking to the

buyer as well because they thought they were going to close next week. It’s probably not going to close next week now. So, we got to we have to educate

everybody. From there, we provide the documents that need to be filled out in

order for us to get the deal to closing. And in this case, it’s called an affidavit of airship. It’s a that that’s

that’s a whole conversation in of itself. But the affidavit of airship is the process through which we can um get

those other individuals into title so they can sign not get them into title but but uh bring them in so they can

sign and convey their interest over to the other to the other party. So we help

a lot with that. We give them the paperwork. We educate them. We, you know, we we direct the seller to talk to

the consulate if the person is in another country because if you’re in another, if this air is in another country, they have to go sign at a

consulate. We we help educate them throughout all of it. Sometimes it gets

to a point where there’s no more we can do. Like let’s say the person just can’t be located. And it’s funny, Aaron, they

they think that we can just go find them. Well, this is y’all’s problem. Y’all go find him. It’s like, no, this

really ain’t our problem. you know, this is, you know, this is something that is caused by the fact that you didn’t have

a will. It’s not our job to go find these people, you know, and so sometimes, uh, we we get put in that

position. We just have to tell them, look, you need to get an attorney or hire a literally hire a private investigator or something like that to

go find these people. So, the short answer is we do everything to the extent that we can and because we want the deal

to close, too. And you mentioned service. We provide a service and I’m glad you said that because yes, we sell

title insurance, but our real product is service. That’s what we’re selling because a lot of people don’t know title

insurance is regulated by the state of Texas. The cost is regulated. Title policy is the same no matter where you

go. Doesn’t matter which title company you close at in Texas, the title premium is going to be exactly the same. There

may be a little bit of difference in what’s called a settlement fee or escrow fee, but it’s literally going to be

within, you know, a couple hundred bucks or so. So, for all intents and purposes, title companies don’t compete on price,

we compete on service. And just to go ahead and and toot our horn right now,

uh, Capital Title, uh, we are known for our service. Not only working, you know,

with uh with with homeowners, but especially with investors. We have an outstanding team. uh teams of uh closers

that deal with with uh investors from across the spectrum from the wholesalers that we talked about, fix and flippers,

all the way up to the largest commercial, most complex deal you could imagine. We have teams of closers and

attorneys that can uh that can get these deals closed. No, that’s amazing. Thank you for

breaking it down because I think there’s just so much behind the scenes that uh yeah, even admittedly I don’t think I

fully understand. And what I do know though is that uh title, you know, issues can kill deals or at a minimum,

like you said, significantly delay them. And it’s something like where having a go-to or a dependable company or an

escro officer, especially if you’re doing anything offmarket, it’s a must. It’s not that’s not

something you want to you find a great deal, you find the buyer, um but you

don’t have your title company picked out. like you could get stuck in that process and that’s not something you want to just like Google and be like,

“Let me go find a title company, right?” Like maybe be a little more methodical about it and find someone who you can build a long-term partnership with

because I’m sure, like you said, you get paid by transaction and if an investor wants to build a long-term relationship

with you and they’re bringing you repeat business, then you know it becomes a win-win and um and you can trust each

other and understand each other over time. So, it’s it’s a great asset for an investor as well.

Yes. And you know, I and I’m glad you mentioned that, too, because we’re part of the

closing team. We are an obviously an inter integral part of the closing team. I always recommend getting a real estate

agent. I mean, I was one for 20 years. That’s how I made a living. and a real real estate agents are going to perform

uh services for you and get you in the right deals and keep you out of the

wrong deals more than you would ever care to realize. So, I always recommend having an agent if you don’t have an

agent. Uh and and you need to have a relationship with the title company, period. And the you know, we we’ve got I

think we’re up to 120 or so offices across the state of Texas now. And by the way, we close deals all over the

country, but here in Texas, we started here in Texas and we got 100 we have 120

offices um you know across all the major metroplexes and and beyond.

Highly recommend that as an investor you get a relationship with an escro officer. You need a go-to person. This

person will make your life so much easier. They will help you if you’re

just looking at a deal and you’re concerned about something. you can just you can just call them up and they’ll

help you. If you’ve got a deal with another title company and you don’t understand what’s going on and they’re

not explaining things correctly, trust me, that can happen. When you have a relationship with an escro officer,

they’ll they will they will help explain things even if it’s not their deal. They’ll at least educate you because

that that’s what we do. You know, we provide a service. So, uh, to your listeners out there, if you do not have

a relationship with an escro officer and with a title company, I think you’re going to put my contact information in

there, let me know because I can connect you with an escro officer anywhere across the state uh that will uh that

will be able to handle whatever type of deal you’re working. Like I said, whe if you if you’re just an entry- level investor, that’s great. If you’re if you

like multif family, if you like assisted living, got we got closers for that. If you’re a developer, we got closers for

that all all across the spectrum. And similar to how not every agent has

the same specialty, um different escort officers can specialize in different transaction types. So that’s that’s a

good call out too. I have one last title question. Oh, sorry. Go ahead. Yeah, like today, just for example, just

not and I get these calls all the time. Uh an agent called me and I’ve known her,

actually trained her when she was a new agent back when I was a broker trainer. Uh she called me and she said, “Andy,

I’m about to go list this property and it’s a guy from California and he’s um

uh he’s he’s got this property under contract through what’s called a noation

and indemnification agreement. Uh what is that?” And I said

I said, “You know, it sounds to me kind of like it’s an assignment type of deal that he that he’s working on. Uh let me

get you let me get you with somebody.” So, literally we have a closer in my office here and and there we have them

in every office but in my office here in Bumont and uh I I said send me that

document and she sent it to me. I sent it to the escro officer. Escort officer said I’m calling her right now and she

answered her question. She got it done you know and that’s just one example and literally that it doesn’t happen every

day but it happens very very often. Had a another good friend of mine. He’s a he’s a local real estate broker. He was

listing a property in as a ranch that they wanted to sell using a 1031

exchange and buy a big a big property down here at Boliver Peninsula and he said, “Andy, I don’t know about these 10

1031 exchanges. I don’t know about that. My seller doesn’t know about it.” Said, “I got you, man. No problem.” And so I

talked with the seller first of all because I know a bit about 1031s. And then I got him with our 1031 attorney.

We actually own a 1031 exchange company as well. And um got it done. He did the

exchange flawlessly. He said, “Man, that was easy as could be.” I said, “Yeah, well, when you’re dealing with the right people, that that’s the way it’s

supposed to go.” Those are just a couple of I I literally have so many examples like that. That’s just a couple.

Yeah. No, thank you for sharing those. I have one last title related question. And so, in a in a transaction, a

typical, you know, residential transaction that’s not offmarket, uh you have a buyer’s agent and you have a

seller’s agent. Who is the title company working for?

And is there such a thing as a bifurcation between buyer and seller where you’re getting uh repres you know

one side representing one versus the other or is it dual representation or how do you see that?

Yeah, the title company is a disinterested third party. That’s the short answer. We are not uh we are not

you know siding with the buyer or the seller. We are absolutely completely disinterested.

Our business is issuing title insurance

policy. We make money off of title premiums. We’re an insurance company. So, our job is to research the property

and research the people that are involved in the transaction to make sure that any potential uh any issues are

cleared before closing, which reduces our risk of there being a claim against

title policy. So, we’re completely disinterested. Good question. Yeah. No, thank you. Um, like I said,

selfishly, I’m I’m filling in a lot of gaps in my own knowledge with this conversation, and I think it’s a it’s a

good topic, one we haven’t done before, and and one that I’m I’m hopeful my listeners will appreciate as well.

Yeah. And and let let me say this, too, in that a lot of times we get the

question, well, who picks the title company? And the the the common thought

is that, well, whoever pays for it, whoever pays for it gets the pick. actually accord and in in in pra in in

practice that’s usually what happens just to be fair that is what happens but according to the real respect

act the seller cannot if

if the seller is paying for the title policy it’s negotiable okay buyer could

pick it’s a negotiable item the seller cannot make the make the deal uh

dependent on that title company. It’s it’s a negotiable item and it’s and it’s because

the buyer should have some say so, you know, in where they’re, you know, where

they’re closing, right? Or what who’s issuing the title policy. If the buyer is paying for the title policy, they can

pick the title company and it’s non-negotiable. Okay, that I get that question a lot and but in practice

normally what happens is whoever whoever’s paying for it picks the title company and you just have to have to go

that way. That’s an important nuance because again I think most people just, you know,

respond to whatever email they get from whatever title company reaches out to them and without thinking any further

about it. Yeah. And so I’ve got a lot of I’ve got a relationship with a lot of agents out

there just from being in the business for so long. And I tell them I’m like, “Look, even when you’re the” and they

and they like closing with us. They’ve got a relationship with us. They enjoy closing with us. They they like to close here. And you know, sometimes they’ll

say, “Yeah, but you know, the seller is saying we got to close, you know, we got to close over here.” And I tell them, I’m like, “Look,

you don’t have you don’t have to. It is negotiable. Now, don’t lose the deal over it, but just know you have some say

so in the matter. You can say, “Look, I would really rather close over here. Got a relationship over here. I think

they’re going to do a great job for us. Maybe I had a bad experience at this other maybe they had a bad experience at this other particular company that they

that they’re wanting to go to.” So, the buyer does have some say so. So, um you know, selfishly on my part, uh I tell

buyers agents, you know, don’t just go with it. If you don’t want to close there, at least try, you know, and many

times the seller really many times the seller doesn’t care either. Yeah. Especially if you’re positioning a

reputable company as the alternative, right? That’s that’s correct. That’s correct. Now, once again, I do I do tell the

buyer that like look, if this is the deal that you want and the seller’s insisting on closing there, don’t lose

the deal over it. You know, you don’t have to lose the deal over it, but you can at least you at least try.

Yeah, makes sense. All right. A lot of good food for thought. Now, I want to spend the balance of the time we have

together. Um, you have an incredible variety of experience. Like you said, you started as a broker, you have your

your your job now. Um, and you’re also an investor both, you know, actively and

passively. Uh, I don’t even know where to pick to start there, but I guess, you know, you’ve you’ve made a career out of

it. So, you have your day jobs that have been adjacent to real estate, but you also use that. Not every real estate

adjacent day job professional uh invests in real estate, but it seems like you over the

decades that you’ve been doing this and been in and around it, you’ve had your own strategy and your own evolution. Can

you share just a little bit about like kind of how you started with your personal investing and then why you’re

now on the passive side of the fence? Absolutely. I read Rich Dad Poor Dad

back when I turned 30 years old. I’m 57 now. I read Rich Dad Poor Dad and then The Richest Man in Babylon of course the

you know some of the foundation some foundational books here right and

I had been in real estate for just a couple of years and my history before that I actually have a masters in

education I used to be a teacher uh which is why I like teaching so much but

uh when I got into real estate I was like oh okay all right I see this is you can make some money doing this right

this is like I can I can wrap my mind around this. It just really just

appealed to me. So, uh, once I got a little bit of money, I’d been selling real estate for two years and I just I I

did well with it just from the very beginning. I went into business with my with my mom. She was one of the owners of the Remax here and she got me up and

running, you know, you know, always thank her for that. And so, I was able to get some success pretty quickly as a

as a as an agent and get some money put aside. And uh my first deal, I love

telling the story because it’s like the origin story. Uh I was trying to find a deal, trying to find a deal. And there

was these two houses that had been on the MLS. The seller was selling them together for like I think like 110,000.

One was a 32 and one was a 21. This was back in 2000. Uh so it was a 32 and a

2-1. 110,000 for both of them in in an okay little area. Great school district. Two pier and beam houses built in

probably the you know 40s. and they were sitting on the market for a long time. And I thought,

wonder if that seller would split them up, right? So, I called the agent. I knew the agent. I said, “Hey, Jeanie,

would you know, would the seller be willing to, you know, I want to buy that one that they’re selling next door because they had a tenant in. They were

living in one they had a tenant on the next door. I want to buy that one that they’re they have rented and then that maybe that’ll make it easier for you to

sell that other one.” You get it, right? So, I offered um $299 for a two-bedroom,

one bath with a tenant in it. Was getting 650 a month and they took it. And I mean, it was cash flow in.

I know. And it’s like it’s not a lot of money, but to me it was like a huge deal. I mean, I’m like, I did it. You

know, I made a good invest and it was it was a great if you look at the the ROI and it it was fantastic, right? And so,

man, you know, as you know, once once that bug bites you, man, it’s hard to it’s hard to go back. And from there, I

just started growing my portfolio a little little bit at a time. And I would just tell everybody, you know, all my

realtor friends, all my realtor colleagues, if you have anything, let me know before you list it.

Every deal I ever found was from a real estate agent. I mean, that’s how I never went and found a deal amount. It was

always from a real estate agent. they would bring it to me and I had a real simple formula for um analyzing is this

going to work or not and the formula work and I just kind of came up with it and it turned out to be a pretty good

formula and it was it was very very conservative and so over time I in I didn’t I didn’t work up to a huge

portfolio properties I think the most I got up to is like maybe 31 doors something like that but just and it was

a mixture of little single family some white commercial little apartment complex duplexes, triplexes, but Aaron,

just that it’s made all the difference in my life. I mean, those properties

that I started acquiring back then, you know, at that time, I mean, it’s literally going to be a huge part of my

retirement, you know, and it enable me in the not too distant future. Um, just

doing that. It was just a little bit at a time. So about two years ago, uh, you know, I’m

looking at retirement on the horizon and I’m thinking, I don’t want to keep managing these properties. This is a

lot. It’s, you know, it’s quite a bit. And I had a property manager, Debbie Hannah, did a great job managing them, but still there’s I was still involved a

lot. And I was like, okay, I got to find the exit door on selling getting out of these properties and getting into some

something else. And that’s when I happened upon Total Wealth Academy where I met you and I went there and I’m sorry

the story is long. Yeah. So, uh, I went with Debbie Hannah, my property manager. She was a guest speaker one night and I

just went to with her to support her. She she had a success story to share. She was a member of Total Wealth. I’m like, “I’m going to come support you,

Debbie.” And so, we all drove over there and I walked up to the top of Total Wealth Academy and you know how they

have all those syndicators on the right side and I’m like, “Who are these people? what is this? I had no idea. I’d

never even heard of it. And by the end of the night, I had drank the Kool-Aid, man. I was like, nobody ever told me

about this syndication thing. So, I started selling my properties and I did

well with them. And as I sold them, I would start investing passively. And I’m now in five different deals. And uh so

that’s how I got into it. And I just I learned about it. I was like, “This is it. This is the way I want to go.” And and that’s what I did. So now I’m in

multif family deals and I’m also invested in a big commercial portfolio

over in it’s it’s out of Idaho, but they’ve got properties in Idaho, Utah, Washington. It’s a really interesting uh

commercial fund that’s doing very well. So yeah, that’s how it happened. And I still have six more doors that I’m

waiting for interest rates to come down and I’ll sell those and finish moving it passively. But right now is just not a

great time to sell them. So let me make sure there’s there’s a lot of stuff I would love to ask about there but let me make sure I heard the chronology

correct. So around 2000 25 years ago you started scaling a portfolio. You slowly

and methodically built it up to about 31 units mixed across you know single family up through light commercial and

small multif family and then over time you you you talked about you know discovering syndication and passive

investing as you start to have an eye on retirement. And then that’s where this kind of shift of like, hey, let me I I I

like the term harvest um you know, harvest some of this equity and um and turn it into something that’s more

passive and put my trust and you know, obviously there’s a ton of due diligence. We’ll talk about that in a second, but like you you place your

money with operators that you believe in the plan that they have and they can steward the money. They can take the

operational burden. They can take the phone calls and you can, you know, be um

an observer and uh and and a beneficiary of of that work without having to bear

the burden yourself. Uh did I did I capture that pretty well? You captured it perfectly.

Yeah. And it’s an interesting shift because I I think one of the reasons I was so excited too to like be able to talk to you, you know, at this length

and depth is that 25 30 years of experience like you you can’t um learn

that from a YouTube video, right? Like that’s something that you learn through life. And I think you you also have

family, you have you have kids that grew, you know, into adulthood. I know I know um you know I I see how much you

care about being a father. And um all this stuff evolves in real time. And I think one of the things I I really like

to emphasize on on this show, it’s called the hybrid real estate professional because people, nobody is

very singular in their life anymore, especially in this world. It’s like we’re all wearing multiple hats. Uh father, husband, employee, investor,

business owner, all these different things. And I think it’s the it’s that unique intersection that we have that that makes us who we are. And so this

kind of evolving journey that you’ve had and then allowing yourself to acknowledge the various like pivot

points in your life. Um I think there’s just a really cool story to tell there and being okay with what you started

with not being what you end with. Um I think some people get really committed

to like, oh, I’m just going to buy one single family home for, you know, 20 years and then I’m going to retire. They model it out on a spreadsheet and it

sounds really good in the moment, but the life is just so not linear like that. And so to be able to follow the

signals as they present themselves and let yourself evolve, I think like that’s that’s the real story um you know that I

see when I hear you tell you know your journey. Yeah. Yeah. I’ve that’s exactly right.

And I and I like the word you used signal. I it was always clear to me when

it was when there was an opportunity that presented itself and and I’m not a

and I’m not afraid to pull the trigger, you know, I’m just not. And and I’ve got to say that, you know, especially on my

in my active investing, I did really well um uh with with the choices that I

made and my methods were were good and I I made and I made good choices, but it was a lot of work, man. It’s a lot. It’s

a lot of work, but when you love it, it just doesn’t feel like work. I mean, I wake up just, you know, look, I just

love challenges and I and I love when these opportunities pop up and executing on them. And then when that signal came

literally at the at Total Wealth Academy and I learned about syndications, I was like, I mean, I just knew this is it.

This is this is what I’m going to do. And so, when when I feel it, I’m not I’m not afraid of executing on it. Yeah. And

I know we’ll talk a little bit about due diligence because I’ve had to learn that as I’ve gone along and I would probably

do things a little a little bit differently in retrospect, but for the most part, uh, I’m very happy very happy

with the way things were going. And it’s interesting because like you said, you have a bias for action. You

enjoyed the journey of learning how to operate. I’m sure you you had a property manager that you had a long-term

relationship with that you trusted. And it sounds like um you weren’t the person that was like, “Oh my god, I’m scared of

3:00 a.m. toilet calls. I’m not going to do this.” You were someone who leaned into the challenge and you enjoyed that like that journey of building. So to me,

one of the hardest things is when you’re used to being, you know, having some degree of control and influence

than to turn fully passively where you literally legally have no influence, right? uh you can maybe call the person

and try and pressure them but like legally operationally it is written into law that you as a limited partner you

know do not have any operational control uh in a syndication. Was that a tough bridge to to you know cross um where you

basically are seeding control and putting complete trust and faith in someone else? I’ll be honest, it it for me it wasn’t.

And I I am by nature I am a trusting person and I got to know everybody that

I invested with. Um and I felt comfortable moving forward and I knew it

was a risk. I mean, I went into it fully knowing that it was a risk and I said, “Well, here here we go.” And you’ve

probably said this on your podcast before. Uh you know, you’ve been on the jockey, you know, not on uh not on the

horse, right? So, and that’s what I did and with one exception had had one deal

that’s u unfortunately not worked out uh that nobody could have foreseen. But

other than that, you know, the uh everybody that I’ve invested with, things are moving along very nicely. And

to answer your question, it just wasn’t I just didn’t have a lot of trouble doing it. I mean, once I make my mind

up, I just I go. And that that’s really if if you look at my trajectory just

since college there’s there’s a lot of things like that a lot of big changes that I made and once my mind is made up

I just don’t mind doing it. And I don’t know what you just said you just said a bias for action. I I love that. That’s a

perfect way to put it. I do have a bias for action. And you know now um I’ve

been approached by a number of people to become a to become a GP. like what you

know what you know how to do this you can do this and uh and I have a lot of respect for for uh people like you and

your wife who made that leap and who you who’ve done it. I’m not ready for that just yet. I mean just my gut uh I’m just

not ready. I want to keep learning more. I’m just not comfortable enough. But I’m I feel I’m going to get there in the not

too distant future. I’m uh waiting for the passive income, my passive income to hit a level where I can devote my myself

full-time to it and then I’ll lean into that, but I just haven’t I just know

myself and I’m like I want to know I want I want to feel more comfortable before I make that particular because

that’s a big leap once you do that. Yeah. And I actually think that you know so I have a theory of why it wasn’t as

hard for you to cross that bridge, right? You had already been doing it for a long time and being active and you’re in a different season of life. Your kids

are growing up. you have a, you know, your career is evolving. Like there’s other elements of your life other than

just investing in real estate. And I’m sure at some point it’s like, okay, I see something I like. I see people that

I’m getting to know that I believe I can trust. I like the plans that they’re putting together and I have the money I

can cycle out of these other assets and put with them and I don’t have to run it. It’s not So that that would be my my

take based on what you told me. But the and then you know learning if

you ever want to be a syndicator yourself like we invested passively in a couple deals before we took the leap and

I think that’s one of the best ways to learn because you see how people think you see the investor relations side you

see all the quarterly reporting and communications sometimes you see things you don’t like um that you wouldn’t want

to do and I think it’s it’s good to taste um you know before you brew so to

speak and um so that’s that’s another element man and and you know just because you invest passively doesn’t

mean you have to eventually become an active GP or a syndicator. You can just invest passively and enjoy your life,

right? That that’s exact that’s exactly right and I very well may do that. We we will see. Uh and and actually I you know just

to be completely frank what interests me the most is is investor relations. Uh I

would I picture myself like if I do get involved in in syndications that’s the end I would want to be on. That’s just

my nature. I’m just it’s because to me it’s education. It all goes back to education for me and that’s what I enjoy

the most. Operations, I’m just not as strong with operations and I’m not as comfortable there. So, um if if I do go

that route, that’s kind of how I see it. Teaming up with someone who’s strong in operations, let me handle the investor

relations end of it. So, but we’ll see what happens. you know, right now, um, I I love my job that I have right now with

Capital Title. And it, interestingly, what what’s happened is I’m now merging

the two because I’m getting relationships with investors like yourself and many others out there uh

that I’m able to partner with teams here at Capital Title to to help you all out, helps me out as well. So, right now, I I

like the spot that I’m sitting in because I feel like I’m providing a good service uh to uh the investor community

uh while still, you know, benefiting me, myself, and and my company and just keeping me in the mix because I love

this stuff. I just love it. Yeah. And and when you love it and you put yourself around it, opportunities,

you know, some people say, “Oh, you’re so lucky. You’re surround, you know, stuff just comes to you.” It’s like, no, you’re putting yourself out there.

You’re creating your own You’re creating your own luck. You’re going out to events. You’re you’re educating other people.

You’re you’re putting yourself in the room, so to speak, but um I have one question. I know we’re almost

at time here, but we talk we promise we talk about due diligence. And I guess I’ll make it a very simple question.

When you made that switch and you started evaluating opportunities, what was the number one most important thing

about either the operator or the deal itself that you looked for before you were comfortable making an investment?

You know, when I admittedly

when I first invested, I didn’t know how to fully vet a deal. I just didn’t I I

know I mean 20 times more than I knew at that time.

I went with, you know, operators who I I knew but I I knew how to how to read the

proform. I understood it. I knew I understood the numbers. I didn’t know what question exactly what questions to

ask or hey is this number like does a real like I know the questions to ask now but even then I really did so it

just came down to if the deal looked good and you know I’m looking at it okay their numbers look good and I talk to

this person and I get to know them and I trust them I’m okay with it and

that just that was just me and and I um and I would you know of course ask other

anybody that I knew within the community. Hey, what do you think about this person? We I would I would do at least some due diligence there to to try

to vet them. Um, but really Aaron, what it came down to was just working with

somebody that I that I felt I could trust. And there just comes a point

where you just got to go with your gut on it. And because two of the people I invested with had never done a deal

before. Yeah. This was their first deal. And actually, I like And you know what? those are

going really well because what somebody told me was that, you know, sometimes those guys, their first one, they are

going to bust. They’re gonna they’re gonna work really hard to make sure that deal works. And I’m like, that makes

sense. And as I talked to them, I I could just feel it. I’m like, all right, these these guys are going to do

everything they can to make it work. And both those deals are going really really well. As someone who just raised money as a

first-time operator, you know, on our first deal of this magnitude, I I appreciate that answer. And it’s actually really I I did a lot of

reflecting on the people that ultimately ended up investing in our deal and we asked them a lot and about you know what

ultimately compelled them to invest and it really was it’s consistent with what you just said. Do they trust you? Do

they trust you to make decisions? Everyone knows that your plan your exact proform that you created on year one is

not going to play out dollar fordoll you know minute for minute over the course of a 10-year business plan. Everyone

knows that. I hope right. So, do they trust you to be able to navigate the twists and turns, the curveballs, the

title issues, the construction delays, the, you know, tenant problems, whatever they are like, and and that’s at the end

of it, you know, if they can trust you and they see how you think and they like how you think, then that that really is

what under underlies the entire process. And um and I like what you said too

about first-time operators definitely are going to want to get their you can’t build a track record if um if you don’t

get results. And um so you are going to work I I can say I guess from my personal experience like we are going to

work as hard as we possibly can to smash our projections out of the park and um and make our investors very happy that

they chose to trust us. Yeah. Yeah. And it and it’s proven to be true because these in those two examples

specifically, they both of those guys have worked really really hard and the deals are are are going well and and you

know even even though it was their first deal, I mean they have a history. They have a work history and you know one of

them you know he had done over a 100 fix and flip properties. I mean the dude was a beast when it came to construction and

and knowing his numbers. And so as I talked with him, I’m like, man, this guy knows what he’s doing. I mean, he

understood numbers. He understood what’s going to be profitable. He understood how to set a budget. He had crews to get

it done. And I really like that. Like, like the GP, he’s the one that’s doing the work. I really like that. And he had

a really good property manager that he partnered up with. Man, just sounds good. And the the the other guy uh was a

an engineer, a project manager and a very very detailoriented project

manager. And um he was the last one that I invested with and by that time I kind of got a feel for what questions to ask

and I wore him out. I wore him out. He answered every single question. We

talked so many different times and um and it and it turns out like I said,

Donnie, you know, this his project is going real well. That’s awesome. Well, thank you for sharing that because I

think it’s important if you’re people that are considering making their first passive investment like what’s the emotional experience? What’s the real

process for making that type of decision, especially if it’s a pivot or an uncomfortable space? So, I appreciate

you sharing that. Yeah. Yep. Yeah. And there’s, you know, like I said, I’ve learned so much more

about due diligence. And uh one book that I read a while back that I that I

re I got a lot of books I can recommend, but one book that I that I recommend that really opened my eyes called The

Hands-Off Investor. The Hands-Off Investor, Brian Burke.

I wish I would have read it, you know, sooner. I I don’t know I would have made any different choices, but I would have

at least gone in my eyes a little bit more wide open. But the hands-off industry by Brian Burke, that is an

excellent uh entrylevel book on how to vet a deal. And that’s just one, but it’s a good one.

It’s really easy read. And the irony is that I read that book while we were it was about two weeks before we launched

raising capital, right? Because I wanted to put my my mind myself in the mind of somebody who’s considering an

investment, right? And so I um it works both ways, right? If you if you’re somebody who wants to raise money for a deal, uh those are the elements that are

the academic ways of thinking about how to evaluate an investment. And then of course, if you are considering an

investment, too, it’s a great read. You know how I know Andy loves uh books is because he runs a book club, too. And um

yeah, that’s a that’s a good way to learn. Well, Andy, we’re um we’re about out of time here, but this was a great conversation. I learned a ton about

title and also appreciate you being forthcoming with um your journey and your evolution. Uh there’s a lot of

value that um I hope my listeners get. Where can people find you if they want to learn more about you, Capital Title,

or any other um way to get in touch? Certainly. Uh my cell phone number and

feel free to text or call is a 4096583695.

Uh email pretty easy a himmings.com.

Capital title of Texas ctoot.com. Uh but yeah, reach out to me. Um, I work

in Bumont. I live down here in southeast Texas. Uh, but I have relationships with Capital Titles all all over the state

and even uh throughout the country. I’m on the national commercial operations team for Capital Title. And so I’ve got

relationships with with investors all all over the state. So, even though I’m tucked down here down in the southeast

Texas, little old Bowmont, um I’ve got a wide wide network to to tap into to help

connect investors with with whatever team they need and help uh however they need.

Awesome. We’ll make sure all that information is included in the show notes and um thanks again for coming on and hopefully we’ll do it again someday

soon. Thanks, Aaron, and congratulations on all your success. Thank you for making it to the end of

today’s episode. As you may know, podcasts are very difficult to grow organically. If you’re getting value

from today’s episode, I’d deeply appreciate if you can take 30 seconds to leave my show a fivestar rating and

review. This will go a long way to helping me reach more listeners just like you. Thank you so much in advance.