Creative Finance Exit Strategies Price Breakdown
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- Опубліковано 1 вер 2022
- In this breakdown video, I talk about a property we recently walked through in a Real Deal episode. Here, we discuss the creative finance price breakdown and the exit strategy we used for this deal. If you’re looking for a step-by-step breakdown, you don’t want to miss this episode!
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❎ I am not a CPA, attorney, insurance, contractor, lender, or financial advisor. The content in these videos shall not be construed as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other and may be outdated or inaccurate; it is your responsibility to verify all information yourself. This is a UA-cam video for entertainment purposes ONLY ❎
This took a wild turn with the sober living. What a smart way to look at this. Nice work.
Pace brother you are amazing!!!! At my stage in the journey is would do the flip to roll the cash into building my business. 💪
Hey Jesse! That's dope.
KEEP IT! THANX FOR ALL YOU SHARE!!! YOU'RE AMAZING.
I'm so new I would need to flip it. I gotta watch a 2nd time cuz I didn't see PML get paid out from sale(only saw PO...approx 3 yrs...on hold) Thanks for this video Pace. You never fail to teach me something new!
Thanks Pace and community
My first thought would be to fix n flip. But with the market right now and seeing how it going into the fall and winter months this not the time to sell. So the smart thing to do would be to do the 600/bd ideas to pay the lender but then maybe 6 month to year refinance. And take out some of the equity to pay the PML. So the cash flow is free and clear for maintenance repairs and vacancies
can you tell more about sober living; how its done, what's the process looks like, any govt approval we need, and how to find people for this method.
really interested in learning about this from you
Aditya. I like that idea for a future video. Thank you! Stay tuned and make sure you're subscribed bro.
Depending on the neighborhood, area and surrounding amenities. Short term housing for traveling professionals, lease option, and or the sober house / Assisted living avenue.
Pace, keep it. I'm all about the mailbox money.
When I aquire a property like this under the same circumstances or very similar. I would keep it, because within 2 years after paying off the private money lender. You will have made over $80,000.00
Great breakdown! Sweet! In my actual situation i think flipping will be the right exit strategy. But…sober living is a more elevated choice! Thank you Pace!
Absolutely!
How about as an alternative exit strategy, cash out refi? But that's only if cash out amount would pay out all or most of pml & other expenses and loan payments would be covered by rental income. The pml would be available for next deal and you own all the equity.
What would you anticipate the value of that property being after the three years?
How much could you cash out at that point as well?
Keep it all day long!
Can u use the increased income from sob living to refi
Or is it only commercial loans where the cf is the value not the comps
@pace morby these deals only seem to work from a buy and hold if you change from market rent to bnb or other types where the rent is 2 times normal market rent. Also why did the guy not just sell it at a discount from the 370k it was worth and walk away with some money. Can you show an example where it works as a buy and hold with regular rental income
Starting out F&F upfront money. Over Time: cash flow.
Well me personally I don't have the cash for either one right now but if I did I'd keep and go the Sober living route. Great idea.
I usually use .12 as an estimate for closing costs and commissions. More of a worst case estimate... Thoughts?
Keep it!
I would keep it and have some students from the closest university. Also pace I would love to get the txt template, how can I do it.
I personally would have assigned it for a fee. Just because I'm newer and need to build capital.
Ideally, I'd like to build an Air BnB portfolio, but not so good in this area, so I'd call you to see if you wanted it. ;-)
If I couldn't get a good assignment fee, I'd do a fast fix and flip.
I would need to know the pros and cons of having a SL facility. I personally would flip it to someone with more experience... like you, since I'm a Newbie.
keep it for sure
How does a new person. Coming in know cost of things when looking at a deal as far as closing repairs ext.
What about closing costs is that included on the agreement
Hey Pace. I'm trying to understand why you pointed at the ~$1400 on Zillow (estimated refi. payment ) as the mortgage payment; wouldn't it be the amount the seller indicated he pays to his lender/bank?
keep it Pace and show us what you do to trun it into soper living and how its look like ? and what if you don't have 9 persons there ?
First time ever hearing about Sober Living. Interesting.
I am in need of a lump sum as well as long term cash flow so I am divided as to which way to go. The blessed position I would be in would be in is either way I would be able to retire from the j.o.b. forever at age 65 as of today.
What about retirement homes
And how does zoning play into things
Sober living is res?
What about rehabs?
Keep it. Would like to see the scripts for foreclosure properties.
Wongyc- Keep it.
I would keep it, because the private money lender would be paid off in 3 years. You would be making some serious cash flow.
Sober Living is intriguing. Who manages? Is there a “house manager”? Typical property manager? Great option. I’d hold it for the long term.
Hey Sadie! House Managers are usually employed to manage sober living houses.
That math is actually better than what you said unless I’m missing something ..that’s 23.1 months paying 2900 not 34 months… I would 100% cash flow it
Can you clarify something regarding the PML paydown my friend? You say the PML is interest only and never gets paid down so not only do you need to save for the $67k but you are also paying the $550/mo until you have the $67k in cash to off. Is that correct? So your total amount paid to the PML is $67k + $19.8k in interest only.
Maybe I’m missing something but if you have the capital, wouldn’t it be more beneficial to just pay the entire mortgage off instead of making payments ect or using a PML? Afterwards the cash flow would be just net that your paying yourself back.
In this case, he didn’t have the capital. He needed a PML for the addition funds need to get the homeowner out of the property. Hopefully I answered your question!?
He couldve used his own capital but from a buy and hold standpoint his cash on cash return wouldve been significantly lower to make his money back versus borrowing the money. Thats the great thing about leverage when done properly.
Is refinancing and paying off private money lender a good idea then making a sober living house??
Pace, so first you get the pm and then you get hard money, and hard money will take first position on your house? Does pm take a position on your home and how would it take 2nd position if you get the pm first and the hard money second?
Also this video was so helpful, I already set up a call with a sober house manager for noon today. Any questions you would recommend I ask?
Hey Chrissy! I love all your questions but it would be too lengthy to answer here on UA-cam. Why don't you bring this up on the free Facebook group and I'll get around to answering it. If not, my students can chime in and answer these. shor.by/Si74 Join and make a post!
Cash flow!
I would love for you to make a video on what you said on the text message / follow up .
Hey Antonio! Cool. Make sure you're subscribed and hit the notification bell so you don't miss the video when it comes out.
I would love to see text/call scripts for preforeclosures please! ✌🏼
Hey Caleb! I'm working on it so stay tuned. In the meantime, check out this texting script that I shared with my students. www.pacejmorby.com/texting
I would like the text templat please thanks Pace.
William. It's in the works but here's the current texting template that I use. www.pacejmorby.com/texting
I'll keep it and turn it into a "sober Living" facility. But how to go about it? Will it work in any State, in CA, for example? I'd like to have the texting message template, please. Thank you ♥
Jacqueline. That script will be out soon so stay tuned. For now, check out this texting script that I shared with my students. www.pacejmorby.com/texting
@@PaceMorby, got it. Thank you very much ♥
I would keep it.. it's a cash cow, 5400 a month after the mortgage and PML is gone If you keep it as a sober living property. worst case even if you rent it normally after you pay the mortgage and PML you can still cash flow for 1900.. Then in the future if you decide to, you can sell it for whatever the market is at that time. Worst case the market doesnt go up and you cash out for what it's worth now or most likely for much more.. sounds like a hold to me.. just my thoughts!!!.. I'm not really privy to creative financing but its definitely a niche I want to learn once my wholesaling gives me a nice cushion
Hey D! Thanks for sharing your insight.
I would keep it. It would make legacy contributions in 2 years.
I am in the long game, would keep it.
I find batchleads foreclosure lists are not current and usually a bad source of data? Have you guys not run into that issue and do you still pull and text those lists?
Hey Alan! Have you reached out to Batchleads Support? batchleads.io/contact-us
I need the text template please 😭 i got the leads through batch lead
Hey Gio! I'm working on a new one but here's the texting template I shared with my students. www.pacejmorby.com/texting
Keep it for cash flow
Keep it
What I’m missing from the math on if you flipped it, is how much of that money do you lose in taxes ?
💎
If those are in fact correct numbers, I would keep it for the long term.
Don't know sober living but would do travel nurse or final year students if near hospital or University
Bobby. Those are good options too, bro.
@@PaceMorby 👍🏽 Getting ready with a house for travel nurses and one for final year students. Both seller financed. Big plans for lots more.
Release the text template Pace! Sober living?! I need to look into that!
Mario. I'm working on a new one but here's the texting template I shared with my students. www.pacejmorby.com/texting
@@PaceMorby thank you boss 🙏🙏
i will flip it, much easier the PML they have criteria you have to meet.
But what about the equity the seller had in the deal? He just walked away from it. Balance was 180k and the PP was $247k
Keep It for Lifetime Cash Flow In Retirement!
Pace Morby - Scripts you use for each area you go after.
Hold
I would keep it and make it the living facility to help people who need housing
Can we have the script Pace?
Jordi. I'm creating a new script but I've used this texting script before and it has been helpful. www.pacejmorby.com/texting
isn't the 550 become smaller every month, when you keep payimg parts of the 67k?
Nir. Interest is 10% of the full amount.
Pace should keep it. if youre brand new then you sell it.
Can we have the text script please?
Hey Daniel! I'm working on that but check out this texting script that I shared with my students. www.pacejmorby.com/texting
flip it!
Keep it. Duh.✌️🥰😍🤣
Keep It, Cash Out Refi, Pay Off Private Lended, Then Do Sober Living But You’re Forgetting Other Operating Monthly Expenses
Pace ! What’s up ! Text template please ! Thanks 🙏🏽
Hey Roger! I do have a texting script that I used before. Check it out. www.pacejmorby.com/texting
I would keep it. Earn monthly income AND use it to write off depreciation.
🕺🏽🇳🇿✌💪🐊🙌Pathway Rain/Reign Maker in Play. 😎🤝
Personally, I have no interest in doing something like a sober living facility so I would flip it
As of today, I would flip it. Me in 5 years - keep it.
Fair enough!
If you find a sober living renter! Then keep if not it won’t work! And must sell and get some quick money
Sober living will invite neighbors' call to police.
Script..?
Keep it!
Keep it
Keep it!