Flipping Homes? What You MUST Know About Title Issues

Erika Proctor (00:01.272)
Hey everyone, welcome to the Real Estate Pro Show. I’m your host, Erika, and today I’m so excited to be joined by Steve Manzo from the Orange Coast Title Company. He’s been a real powerhouse in the title insurance space. Steve, I’m so glad to have you here.

Erika, thank you so much for inviting me. I’m very excited to be here today.

Erika (00:24.322)
I think our listeners are going to really appreciate your advice and expertise about navigating the complicated title processes and also hear some investing stories too. So let’s dive right in. our audience who isn’t that familiar with your world, give us a quick rundown. How did you get started in the title industry?

You know, I was introduced by a friend over 35 years ago. So I have been in the industry for quite some time. I’ve, you know, worked with realtors, lenders, escrow companies, closing companies, and investors for a very long time.

Erika (01:07.806)
Awesome. And then what markets do you focus in?

Steve Manzo (01:07.362)
You know, my main focus is in Los Angeles County. However, I do have clientele all over the state of California. And I do actually have some clientele in other states because we are a national company. So I like to work with investors all over the place.

Awesome. And how do you find the balance with that? Working on your own flips, working on local properties, and then working with those national customers as well.

Well, it is definitely a balancing act. You just have to really have very good time management. I’m one of those people that if my phone rings, if I don’t answer it, you will get a call back within five to 10 minutes. I find that if you take care of things immediately, then they don’t keep building up. Sometimes, you know, go, I’ll get to that later. And then two days later, you’re like, my gosh, I forgot to call that person back. So

I like to be, you know, Johnny on the spot and take care of things as they come up. And I find that helps me to balance all of my business.

I heard that the California market can be really unique. How do you approach the title services there?

Steve Manzo (02:32.774)
the California market is is is a little bit different than a lot of other states throughout the country. it’s it’s definitely a lot of hard work. I’d like to go to offices. I’m a very, I love one on ones. I love networking. I feel that, you know, texting and phone calling is one very small side of it. I believe in the one on one and the face to face.

so that you get to know the person that you’re dealing with. And I think that that’s probably helped me most in building up my clientele. And of course, know, having, being around so long, my knowledge in the business does definitely help out. And I try to encourage everybody in the best way that I can by listening. You know, you’ve got to listen to somebody’s needs to be able to help them.

Yes, I totally agree. Steve, title insurance often gets overlooked until a problem comes along. How do you educate clients and investors about the value of title insurance before issues arise?

You know, one of the things that I do that’s probably a little bit different than most other title companies is,

Steve Manzo (03:57.374)
I like to make sure that like I tell all my investors and my realtors before you’re going to look at a property, especially the investors, is to make sure you give us a call. Let us do a quick search on the property so this way you could know what TDs are against that property. Are there any back taxes? Was there an NOD filed? You know, we can also run the seller so this way we could find out is there any

state or federal tax liens. Is there alimony or child support or a les pendants? Solar. So there’s a lot of information that I like to give to my clients upfront because this way it helps them to make a very informed decision when they’re going to possibly purchase that property. Because the last thing I want to see happen is you go into escrow, then two, three weeks in, you find out that there’s a $50,000 tax lien.

and now it blows up your deal. So this way it wasted all their time, their energy, and nobody wins in that situation. I feel that making sure that my clientele is properly prepared and informed of what they’re getting into is probably one of my biggest assets.

Got it. And diving in a little bit more deeper with the importance of title insurance, is there a particular story or example that you can share with our listeners to help them understand why title insurance is non-negotiable? You need it.

Yes, absolutely. You need title insurance because you never want anybody coming back on you. So that’s what we call clear title. I think what a lot of investors have to watch out about is the vesting, which is how title is held on a property. So they may be talking to a say the son who is saying, OK, I want to be able to I want to sell my parents property.

Steve Manzo (06:08.718)
Well then after we look into what we find out that maybe the son isn’t even on title, mom and dad is. Maybe one of them has passed away and the other might be in a nursing home. But it still doesn’t mean that the son can go around and sell that property on their behalf. And a lot of times people go, well, I have this power of attorney. So as a title company, we go, okay, well, how old is that power of attorney?

If it’s not within the last 12 months, we really don’t give it a lot of validity. And then we also have to, if they’re in a nursing home, we have to make sure is the parent of sound mind. We might have to get doctor’s notes saying that they’re either of sound mind or not sound mind, and then base our decisions on being able to allow that person to sell the property. The other question also comes up.

Are there any other siblings? So are you selling the property but your brother and sister don’t have any idea about it? Maybe, maybe not. So we have to make sure that if there’s any other children involved that they also know what’s going on. And sometimes we want to get an affidavit from them saying, yes, older brother is going to be in charge of this and we are fine with his decision making. So that would be.

You know, just one quick scenario that I feel a lot of investors that are listening to your podcast has probably already come across.

Yeah, you’re probably right. you Steve, you’ve done some flipping yourself. Has there been a moment where you were working on a flip and maybe there was a curve ball or a time that you had to pivot fast? Would you mind sharing one of those moments?

Steve Manzo (08:10.638)
Yeah, and that would probably be on my last one that I did. When we got into the whole project, everything looked great. Prices looked all right. Once it’s fixed, we can sell it at this price. We should make a great profit. The market turned. Interest rates went up. Buyers dried up.

And so our pivot was that we had to keep reducing the price of the property faster than the market. And even with that, you still run into those issues. So unfortunately, the marketplace is something we have no control of. But you definitely have to keep your finger on the pulse of what’s happening. Because if I was

not proactive and I just left that property sitting there, we would just keep losing more and more money due to holding costs. you know, making sure that it’s priced properly to the market that you’re in, I think is extremely important.

Yeah, yeah. For our listeners who are early in their real estate investing journey and are looking to level up, relationships are critical in this business. When it’s come to building a network for you, what’s made the biggest difference?

I think, you know, building the network is huge. You have to make sure that you have all the right people. So you have to have a great lender or lenders that have different programs available for you as a flipper. You have to make sure that the title and escrow company or closing company that you utilize understands the investment arena because it definitely has

Steve Manzo (10:09.314)
couple other little issues that come up more often than say the normal single family home. And I think, like I said, you know, mentioned earlier, like what I do is making sure that you’re working with a title company who’s going to help to provide you with the information that you need when you find the properties. But on top of that, hopefully they also have the experience.

of helping you to find those particular kind of properties.

Yeah, yeah. So Steve, I have to ask what is next on the horizon for you? What are you focused on when it comes to infesting and what are you focused on at Orange Coast Title?

for me on my business at orange coast title, I am definitely trying to take my business more to a national level. like I said, I do have, I do a lot of networking. I love doing podcasts like this. So once again, thank you for having me. and, and on the flipping side, I, I myself, I am going to start getting more into like smaller.

to mid-size apartment buildings. I wanna build up my portfolio at this point in time to start getting mailbox money. So I’ve done enough flips where you can make the extra money and keep building the empire. But once you get to a certain level of money, I think that it’s good to be able to get into some larger projects and utilize that for down the road in your retirement.

Steve Manzo (11:55.424)
So that’s why I want to, you know, start with, and I’ve actually have done two so far. They were smaller. One was a 10 unit and the other was a nine unit. But, you know, the beauty is they’re brand new. So as time goes on, you’re only going to build equity in the percentage of ownership that you have in that apartment building. And in the meantime, you collect some money along the way. So.

I think everybody could use a little extra money.

Yeah, exactly. For our listeners who are just starting to get invested, what advice would you give them looking for their first property?

So for the newer investor, the most important thing is no matter where you live in this country, we all know of areas that probably are a little less desirable or provide an opportunity of you being able to find a property that is going to be a little more

somebody that needs help. Because realistically, you’re trying to help an individual that probably is in a very bad situation that needs to get out of that situation. And I think that’s where investors need to look at the aspect of helping people. You can help somebody and maybe not get that property as a flip, but you did the right thing.

Steve Manzo (13:40.374)
Other opportunities will come along where somebody is just in dire straits and they have to get rid of that property. And at that point in time, that’s where you can buy it at a level that you’ll be able to fix it and flip it and then make money for yourself. But I feel that people have a sixth sense. And when you are only out after the dollar, they know it. And it’s all about trust because these sellers want to be able to trust you.

and want to feel that you are there in their best interest. Hey, we all want to make money and I’m all for that too. But it’s also about helping other individuals in the situations that they’re in. So that would be something that I would look for. And then. Sorry, I rambled on about that, but no advice.

Yeah, but I would also, you know, as a first time person, I would probably look for homes that are much older. You know, properties that are 30, 40 years old, 50 years old, because you know that they’re going to have, they’re going to need upgrading. They might need the roof or, or, you know, new flooring and paint and they probably need the bathroom in the kitchen remodeled. But that’s where you’re going to have that opportunity of maybe being able to help that person to go on to greener pastures, and then you’re gonna be able to maybe bring in youth into that neighborhood, because there’s a lot of startup families that are out there looking for properties. So you can really dive into certain smaller neighborhoods and start doing them the…

the service of upgrading the neighborhood and getting rid of the eyesores, if you want to call them. And like I said, hopefully help out a new family that needs a property that’s more affordable.

Erika Proctor (15:50.978)
love it. That’s a great strategy. When it comes to those renovations, how do you decide what is absolutely necessary and what is optional? You know, got to balance the practicality with what the cost is, right?

Absolutely. you know, things like flooring and paint, I think are almost a necessity almost in every property. if a bathroom’s really beat up, I would highly recommend remodeling a bathroom. sometimes it’s kind of hard to disguise a bathroom, where in a kitchen you might be able to get away maybe with a new countertop and maybe be able to

refurbish the existing cabinets and stuff like that. But one of my recommendations to any new person also is go to Lowe’s and go to Home Depot and familiarize yourself with the cost of what it would take to remodel a bathroom or remodel a kitchen and the cost of pain and how far that’s going to go. Because when you go into these properties,

you have to be looking and your mind’s got to be clicking going, okay, it’s going to cost me 10 grand for that bathroom, you know, 18,000 for the kitchen, another 10 for this bathroom. I can probably do the flooring for 10 grand. So you, you’re, you, you’ve got to be adding your numbers up, in, in, an intelligent way, not just guessing, but kind of really, you know, being fairly close to your number so that you know what to

make as a fair offer on that property. Because too many times people can get into a property then they put all this stuff in and then depending on what the market is doing is going to depend on how much you can sell that property for. I think really understanding it’s not that you’re going in and doing the work yourself you might you know have a GC but I think you need to familiar your

Steve Manzo (18:02.53)
familiarize yourself with the pricing of what it could cost so this way you, you know, make a better, you know, determination if you could do that housing.

Got it, got it. And Steve, if someone is looking to reach out to you, maybe they want to partner with you on a flip or they need help with title insurance, what’s the best way for them to reach you?

Um, the best way is you can call me. Um, my phone number is 661-810-3047. Um, or you can email me, uh, which is smanzo at O C title.com. Um, some of the things that I will do for whether they’re just starting or a veteran.

We do have a website that they can sign up for free. It works in all throughout the United States so that people can pull property profiles and comparables. It even gives a little property history on a property. So it gives them an idea of what’s going on with that property. I can also then teach you how to target market for the kinds of properties that you’re looking for.

So maybe you’re looking for absentee owners. Maybe you’re looking for absentee owners that are out of state, or as I mentioned, empty nesters, properties that are 30, 40, 50 years old. So I can definitely help you, you know, and also with notice of defaults. So there’s a lot of different ways that I help to provide you with information and tools.

Steve Manzo (19:53.784)
to help make your business grow. Cause you know what, I work on commission. So if people don’t buy and use us, then we make no money. So I’m more than happy to put out all my tools and services up front for free in the hopes of being able to do the title insurance when the opportunity comes.

I love that. Thanks for caring about helping people, providing useful resources, and valuing trust. We need more people in the industry like that.

Well, thank you. Yeah, I just find the people who do that actually do more business. It just works that way.

Yep. Well, Steve, thanks so much for coming on the show today.

Erika, thank you so much for having me. if there’s anything else I could ever do, you let me know.

Erika Proctor (20:56.45)
You’ve got it.

Have a great day.

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