Why Title Companies Reject Real Estate Investor Deals | Jessica LaFair

Jessica LaFair (00:00)
So that is a really excellent question. And I can tell you that the biggest call I get from my investors is I’m working with title companies and either they don’t want to work on my deal because the deal is maybe somewhere between 25 to 150,000 and it comes with a lot of dynamic needs. or my title company doesn’t know how to do this type of transaction. And so, and that can be for a wrap.

Transaction that can be for a double close. It can be for an assignment, a double assignment. I’ve done up to a quadruple assignment on one deal. they don’t know how to how to work in that environment or how to reasonably work with the clientele.

Scott Bursey (02:20)
Welcome back to the Real Estate Pros podcast, powered by Investor Fuel. I’m your host, Scott Bursey

Glad you’re with us. Today we have a true trailblazer in the house, Jessica LaFair CEO and founder of Cottonwood Title and Escrow. Back in 2020, at just twenty seven years old, Jessica shattered records by becoming the youngest title company owner in Texas history. Today she navigates the complexities of massive commercial deals, multifamily acquisitions, and residential developments across the state.

Listeners, you can expect a masterclass on navigating complex title hurdles, scaling under pressure, and dominating in a competitive market. Jessica, welcome to the show.

Jessica LaFair (03:03)
Wow, what an introduction. Thank you so much.

Scott Bursey (03:06)
It’s just awesome having you here, Jessica. And to help our listeners get to speed, please give us the ninety second highlight reel of how your career ignited and where you’re pouring your fuel now.

Jessica LaFair (03:18)
Absolutely. So I am actually second generation in the industry. So while I can say I started professionally in two thousand and eight, personally speaking, I was raised in the industry. I spent my summers up at my mother’s office. My mother ran a title company herself and she was one of the first women in North Texas to own a title company in a men’s market. And so I really fell behind her trail b blazing herself.

And then in twenty twenty, after see I think that was probably my twelfth or thirteenth year in the industry, I opened up Cottonwood Title. And so and it has been going, going, going ever since then. We opened then and in the fall of twenty twenty, everybody was refinancing or moving to the countryside and mobile closing was where it was at, and that was our specialty.

And so it was our pleasure to be able to work with the market and work with consumers that needed to get their need to get their deals closed. And then we worked with a lot of investors too that were working on purchasing properties, flipping properties, finding rental properties, you name it, I mean, we can close it. And so that’s where our background is and it has been an amazing journey thus far.

Scott Bursey (04:42)
Truly amazing. And what really caught my attention about you was the way you’ve been able to seamlessly orchestrate title pipelines across drastically different asset classes. Moving from single family residential flips straight into high stakes, retail and office developments without missing a beat. And building on that, Jessica, curious to know, what core strength allowed you to break barriers and launch a title firm at such a young age in Texas?

Jessica LaFair (05:10)
Well, I have to say that we are a Christian based title company. I think a lot of it had to do with the journey that I was meant to be on and less about me necessarily as an individual. However, having the background that I had and being raised in the industry, in our industry there’s a lot of individuals that learn just one sector of what our business is made up of. And because of my background,

I was able to learn all the way from being a receptionist into the background operations of what does it take to actually make the turbines of a title company roll and go forward. And so that was a huge blessing and that’s what got me in order to in a place where I could open up my own company and the knowledge that came from generational understanding was huge too.

Scott Bursey (06:04)
How do you actively maintain that sharp operational edge across your team today?

Jessica LaFair (06:10)
So we just keep on learning. I mean, we have so many deals that are brought to us, especially by our investor clients and and some on the large commercial side too, where they’ll bring something to our table that may not be entirely new, but it’s a a different type of complexity. And then we’re able to work with our underwriters and our council in order to be able to further understand how to process or how to move forward or when the laws change.

You know, when laws change or in in for instance in Texas, we have new reasons on who can purchase property. there’s certain countries or countries of origin where individuals can’t purchase, and we’ve had to learn how to navigate that type of dynamic and and how to have those sensitive discussions with investors and ask you know, what what is your background, where are you tied to?

And I mean, that’s a very sensitive discussion to have, especially in today’s age. And so, I mean, the changes really come from what’s going on in the market and what new type of avenues are our clients bringing to us for us to solve for them.

Scott Bursey (08:09)
taking a hard look at the industry, Jessica, where do you see the biggest internal operation bottlenecks in traditional title processing today?

Jessica LaFair (08:17)
So that is a really excellent question. And I can tell you that the biggest call I get from my investors is I’m working with title companies and either they don’t want to work on my deal because the deal is maybe somewhere between 25 to 150,000 and it comes with a lot of dynamic needs. or my title company doesn’t know how to do this type of transaction. And so, and that can be for a wrap.

Transaction that can be for a double close. It can be for an assignment, a double assignment. I’ve done up to a quadruple assignment on one deal. they don’t know how to how to work in that environment or how to reasonably work with the clientele. Cause this is these are sensitive transactions where you have to know what information you can share with who.

And and what keeps the the process moving smoothly towards closing. And so the biggest bottleneck that I see is investors trying to find a title company that knows how to not just work their deal, but is willing to move forward and make sure that it’s smooth.

Scott Bursey (09:31)
What simple system have you put in place to eliminate that friction?

Jessica LaFair (09:36)
Well, we offer our services. that and also even if we’re not able to be the title company on the deal, because not everybody gets their way all the time, right? a lot of my clients can call and ask me and I just say, pick up the phone. Give me a call and let’s see what what what direction I can give you. What can I tell you your next steps I believe should be?

And I have to be careful not to give legal advice, but give advice from a stance of this is what’s gonna take in order to clear your title and make it insurable. And we’re also going to be doing our Tuesday and Thursday live streams to allow people for questions and answers. And I’ll also be doing small little classes on different parts of the contract or the process surveys.

you name it to make that smooth for the investors or what do what are we doing on the inside of the title company. We’ll cover a lot of different information and and it’s all free. None of it’s being there’s no gatekeeping. I don’t have a subscription or you have to pay monthly or something. I just want the market to have a responsible amount of knowledge so they know how to move forward and do what they do well.

Scott Bursey (10:56)
And Jessica, from your vantage point, where do you see the most explosive market opportunity for Texas real estate investors currently?

Jessica LaFair (11:03)
Wow. okay, so I wouldn’t say there’s just one. I would say that each sector is exploding right now. There is a lot of economy coming to Texas. And so with that comes the need for people. And that includes being able to have multifamily housing, apartment complexes, the ones that are being bought out by investors and being revamped.

is a huge market right now. There is a huge market to buy land and sell it to developers. There’s a huge market, just for anywhere you look right now in Texas for an investor, they can get in on the the smaller side and finding those homes that are have tax foreclosures or suits, they have curative needs and flip those.

Or you can have your multi million apartment complex, multifamily that also is going to be essential to the market that is lighting on fire here in Texas, especially in North Texas.

Scott Bursey (12:12)
We’d love to hear your take on this. What emerging market threat or regulatory shift could catch commercial developers off guard this year in your view?

Jessica LaFair (13:03)
So there is a lot going on on the regulation side when it comes to zoning for one. And and some of these initiatives are great. So we see this happening where cities they don’t want to be a concrete city. And frankly, we don’t want them to be concrete cities either. But that does make it so large commercial developments, if you’re staying on the business commercial side, because there is a commercial aspect to being a large development too.

But if you’re staying on the business commercial type zoning, you know, you can expect to work with your cities and be given initiatives like the green initiative and where if you buy a certain amount of square footage, then you have to have a certain amount of green that you either donate to or purchase in the city, make parks and ponds and splash pads for for the community or even to have attached to your property itself. They

there’s quite a bit of that. I know that some of the cities are very strict on what kind of businesses they want to allow in right now. And as far as development goes, I think it is a really excellent opportunity. It’s it’s regulated, however, there’s really great opportunity to come into different cities that are wanting initiatives push forward.

when it comes to some of the lower income demographic type housings where they want to be able to help individuals that need that help and need that housing. And so while many will see that as a regulatory hurdle, truly it’s an opportunity and it’s a huge opportunity for investors because it’s a guaranteed income. There’s a guaranteed need and it’s subsidized by the government. And so that those incoming incoming numbers are guaranteed as well.

Scott Bursey (14:55)
What proactive steps should developers take right now during the due diligence process to protect themselves?

Jessica LaFair (15:03)
That is an excellent question. So go to the city council meetings, go to the county council meetings, go to mapping and future projections where they tell you where the road’s gonna be going. where do we see the properties surrounding these cities? because there’s so much growth happening in Texas right now. That if you’re a developer and you want to purchase a property, you really wanna make sure, especially

and and paying attention to what kind of development you’re gonna be doing. Are you developing a tiny home park community or are you gonna put in apartment complexes? Are you gonna do a subdivision with multiple houses? Are you gonna do a duplex subdivision? what kind of what development are you gonna be looking forward to? And are they gonna build a road right through it? Or are they gonna restrict that type of housing?

do are is your specialty already at full capacity in that city? Because a lot of cities have percentages for section eight housing versus medium income versus higher income. They already have projections on what they look. And so when you’re looking at a certain community, you want to plug in and see what is that community asking for, and also do they have the utilities to support? That is also a huge

a huge portion of what our our developers need to look at water, electricity and sewage. is there a plant that can handle if you want to put in a hundred houses, can they handle it? Or are you going to need to do and develop for one to one and a half acre plots depending on the county you’re in in Texas so that you can put in tanks or aerobic systems because there’s not access to city sewage.

It’s it’s really going to be a dynamic process for our developers moving forward because of the amount of growth to try to either not not get cut in half by a road or make sure you’re gonna have the utilities needed in order to make your project come to fruition.

Scott Bursey (17:08)
Looking at the pipeline, what trend in multifamily acquisitions is reshaping deal closings the fastest?

Jessica LaFair (17:16)
Individuals that are purchasing multifamily units that have become a little drab or they’ve fallen behind on repair. That has been a huge change in the market. and and cities love it. So cities love investors coming in and finding either those duplexes, fourplexes,

single family single family units and even just your general apartment complex giving them a beautiful new paint job coming in and repairing the inside making it great and better livable for the tenants inside which increases you know tenant livability and decreases crime in the area it beautifies the cities and it it makes people to be proud

of where they’re living and and it shows in how they live their daily lives. And so that has been monumental.

Scott Bursey (18:10)
Diving right into your inner circle, what does your professional network look like right now?

Jessica LaFair (18:17)
so my professional network is you know, you keep your friends your friends close and your network closer. So my network looks like a team of several counsels that that will guide me if I’m unsure of what to do with a certain scenario or a new type of transaction. I am surrounded and thank goodness, because if you don’t know, then you better know somebody that does.

with geniuses that understand Texas law, Texas litigation, case law, and how to make properties insurable. And I am also surrounded by some of the best team members that I could ask for. I have one of the most amazing assistants that anyone could ask for. having the team surround me, I have an amazing marketing team and I have a just

a amazing support around us and an amazing clientele. I it’s it’s fantastic to be able to set excellent and very clear expectations for our clients and them to understand them. And that’s the one of the biggest things we look forward to when we’re working with investors is that they can often understand exactly what we lay out for them with their properties. And they’re they’re often

Pretty well seasoned and if they’re not, they’re open to learning and understanding the dynamics and wanting to find out what that means.

Scott Bursey (19:47)
What an amazing network. And Jessica, when you’re dealing with high stakes, multi million dollar closings that you know, hit an unexpected title defect at the let’s say the eleventh hour, what is your ultimate strategy to salvage the deal and push it across the finish line?

Jessica LaFair (20:07)
Make a lot of phone calls and be thankful we’re not paying for minutes at this day and age. So reaching out to those in my network, if we find out something at the eleventh hour, truly, we probably weren’t doing our job correctly. our our gain above our competitors is to be proactive, to find things that are to be found up front.

So that if we see something because oftentimes there’s very few instances where we should have something pop up at the eleventh hour. So unless somebody has gone and put something on record since we first pulled title and looked into the property, and if something like that does happen, we’re picking up the phone, we’re calling, we’re finding solutions, and we’re gonna be the first to tell the clients what’s going on with precision and accuracy.

no gatekeeping, no overpromising and under delivering. We’re gonna tell exactly what’s going on, why we’re finding out almost when it’s supposed to be time for closing, and and what the solution most importantly is going to be or what that’s going to look like.

Scott Bursey (21:16)
Absolute incredible insight right there. And for those of our listeners that want to keep this conversation moving, stay in your lane or collaborate with you, what is the best way for them to plug into your pipeline and reach you directly?

Jessica LaFair (21:30)
So we are it very accessible. My my work cell is everywhere. It’s on Facebook, it’s on Instagram, it’s, you know, at a point it was on my car. you can reach me directly at any time. And I just always let people know if it is outside of technical business hours, you might hear some background noise.

But but we’re here to serve and we’re here on you can find us on Facebook. We have our main website which is cottonwoodtc.com where it also has emails, phone numbers, every which way that you could reach us and we’re available twenty four seven on call. So if it’s a Sunday afternoon or it’s a Tuesday at two AM,

We are here to help with those answers and get people where they need to go ’cause not all of our clients are here in the United States. Some of them are abroad and two AM my time is two PM their time. And if they need something, it’s our aim to be there for them.

Scott Bursey (22:37)
Jessica, thank you so much for joining us today on the Real Estate Pros podcast.

Jessica LaFair (22:42)
It has been a pleasure and it’s been really exciting. It’s really enjoyable. Thank you so much for having me.

Scott Bursey (22:48)
It was very enjoyable. And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be filling your tanks with a lineup of elite guests, just like Jessica LaFair, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.