This was a master at work, He basically broke down sub two in that little bit of time, and he killed the call from the very start when he asked the questions about the kids and the rooms wow. My favorite part was the phenomenal breakdown of the mortgage regarding the payment of $340, Absolutely brilliant.
Pace is the master. Non solicited testimonial. I am not an official student/member . . . Yet. Have been in the crei biz for way more than a decade. Whathe is sharing is absolutely right on. When I recover from a hurricane disaster I will be one of Pace's students. This is real guys. Listen to this a bazillion times and then lip-sync him to get comfortable with the process. EVERY minute, every HALF minute is pure gold.
@@PaceMorbyPLEASE TELL ME HOW THIS UNDERWRITER WRITES OUT THIS DEAL WHERE THE EXISTING MORTGAGE DOESNT SHOW UP ON SELLER SO HE CAN BUY ANOTHER HOME I MEAN THATS THE WHOLE DEAL YOU CANT EVEN DO THIS DEAL WITHOUT THAT INFO ! I NEED THIS INFO ALSO WHO IN REAL ESTATE IS GOING TO KNOW AND HELP PUT THIS DEAL TOGETHER LEGALLY WHAT PEOPLE DO I NEED TO MAKE IT TANG-ABLE AS FAR AS PAPER WORK AND SENDING TO WHOEVER TO HAVE IT LEGAL ? LISTEN I TALK TO LENDERS AND THEY ALWAYS TELL ME I CANT BUY ANOTHER HOME BECAUSE I OWN A HOME AND I DONT MAKE ENOUGH MONEY TO AFFORD TWO LOANS ITS RIDICULOUS LITERALLY GOING TO RENT THE NEW HOUSE OUT I JUST AM AT MY WITS END I NEED YOU !
As a mortgage lender the issue I see with this conversation is that the seller is still financially obligated to the payments on the subject property. Therefore it is not as simple as just giving them 20k to go through with the pending purchase of their new home. They would have to qualify for the new mortgage with both the existing mortgage payment that Pace is taking over AND the new payment on their new home. The only other option is to lease it to Pace prior to closing to negate the debt and then finish the Sub To transaction after they close on the new home.
@@PaceMorbyI have a great deal in McComb ms that this video will help. So genius! Is there anyone that would like to participate or know how I can give it to pace?
You made it sound like you were going to pay the seller his full equity within a 3-5 year term. I don't have a crystal ball either, but I'm willing to bet that you're not going to get a 3.75% interest rate or lower within that amount of time, so how are you going to pay off the seller's equity in under the 5 years that you suggested? You are very misleading & that's what you are teaching us??? I give you credit for being a smooth talker & you definitely know special finance well, but some of what you say can come off as shady (if you need to clarify what you said and what you meant), and you also come off as really arrogant. Wow, and you don't refinance most of your deals, so the seller is stuck with 2 mortgages under their name and waiting for you to pay them their equity. Just saying... shady. If you would just be straight with the seller, I'm sure you would get the same result. OMG, every time someone asks you when the seller can be expected to get his equity paid in full, you dance around the question and tell the other person that they are over complicating it. Please just be straight with people. Shady is not a good look on anyone.
I would like to add that he did say that most (80% of clients) don’t worry about getting paid their equity for 3-4 years, however, to your point he ALSO said that “he knew this is family money and therefore would aim to pay it off in 24 months (probably)”. That, I agree is misleading and shady. Especially when you know you almost never refi the loans and it is extremely unlikely for us to see sub 3.75 rates in the next 24 months. That being said, he definitely doesn’t get off scotch free without paying their equity at all. I’m going off on a limb here (bc I also don’t understand how the equity is paid without refinancing) but if I had to guess how he does it, it’s probably using a Private Money Partner to pay it off by collateralizing his own “equity” that has been built into the property by paying down the loan over the last 5-7 years. If this is incorrect, someone please share because I would like to know how the equity is paid off to the seller if there is no refinance! On the same note, I’m not understanding how the PMP is getting paid back in these scenarios such as the down payment/commissions/closing costs or in a situation where they pay off the sellers equity. Can anyone elaborate?
@@Hunter.Hawkins @bymilliebphotography8249 The lender is getting paid back through cash flow/ equity, or just in it for the equity if the property is not cash flowing well enough to get funds back in a reasonable amount of time. It depends on what the lender wants. Private money lenders want interest and private money partners want equity and part ownership thus are in it for longer. There’s something called a DSCR loan where you can refinance based off of how well the property performs over a 2 year period (for example) which is my presumption of why he mentioned 24 months. Yes the seller does have 2 mortgages in their name but only the new one will affect their debt to income ratio/ credit. Pace is fixing this family’s main issue and that is that they need to sell as soon as possible and get moved into the new property as soon as possible. At first glance it looks shady, but this is far from the actual case. If you have any more questions you’re welcome to message me. ✌️❤️
The better part is he’s literally getting an interest free rate of 140k if the seller was smart they would as for interest payments on that 140k of equity honestly if the seller was smart they would just pull some equity use it to fix the house and then rent it themselves and cut out the middle man it’s not like they even need to manage it or they could pocket that management fee he’s just a smooth talker and down plays things or breezes over them in a manner that makes it seem like both are winning
🎯 Key Takeaways for quick navigation: 00:00 *📞 Introduction to the Seller and Situation* - Pace introduces himself as a real estate investor. - Discussion about the seller's situation and their plans. - Pace offers to explain creative finance as a potential solution for the seller. 01:47 *💰 Explanation of Creative Finance and Terms* - Pace explains the concept of creative finance. - Benefits of creative finance for the seller, such as quick closing and flexibility. - Discussing the focus on terms rather than price in creative finance deals. 03:23 *🔑 Benefits and Challenges of Creative Finance* - Pace outlines the advantages for him as the buyer in a creative finance deal. - Addressing challenges, such as dealing with equity and payment structures. - Explanation of how commissions and expenses are handled in creative finance transactions. 08:25 *💡 Creative Finance Deal Structuring Discussion* - Explanation of potential deal structures in creative finance. - Importance of determining seller's interest and minimum down payment. - Detailed scenario walkthrough with considerations for a smooth transaction. 09:50 *🏡 Simplifying Creative Finance Process for Sellers* - Pace explains the process of him taking over payments and handling commissions. - Real-life example of a similar deal solved using creative finance solution. - Addressing seller's concerns and emotional aspects in the deal-making process. 11:14 *💰 Handling Equity and Payment Terms in Creative Finance* - Detailed explanation of handling equity in a creative finance deal. - Discussion on repayment terms and refinancing strategies. - Managing monthly payments and long-term financial strategies in creative finance transactions. 16:39 *🏡 Creative Financing Strategy Discussion* - Explanation of showing the new lender the change in payment responsibility. - Importance of ensuring financial feasibility and understanding debt-to-income ratio. - Collaboration with the current lender for a smooth transition to the new loan. 19:26 *💸 Evaluating Cash Flow Potential in Creative Finance* - Detailed breakdown of potential cash flow calculations in a creative finance deal. - Emphasis on managing expenses and ensuring positive monthly cash flow. - Factors influencing cash flow, such as rental rates and expense budgets. 20:32 *💡 Value in Creative Finance Deals* - Explanation of the true value in creative finance deals beyond purchase prices. - Emphasizing the benefits of low down payments and takeover of existing low-interest rates. - Introduction to leveraging private money partners for deal financing and sharing profits. 24:24 *📞 Effective Communication with Sellers* - The importance of building rapport and creating a connection with sellers during phone calls. - Addressing objections and sympathizing with the seller's situation. - Planting seeds for future discussions and ensuring the seller's understanding of their best solution. 27:04 *💰 Addressing Equity and Refinancing Terms* - Explaining the process of handling equity payment and refinancing in creative finance deals. - Clarifying the role of transaction coordinators in setting terms for refinancing. - Emphasizing the importance of clear communication and avoiding overwhelming sellers with excessive information. 30:28 *💡 Focus on Speed and Effective Deal Structuring* - Identifying and addressing the seller's primary objection to expedite the deal process. - Contrasting the mentality of cash transactions with the benefits of creative finance in terms of equity and deal structuring. - Highlighting the advantages of creative finance in providing win-win solutions for all parties involved. 32:58 *🔀 Creative Finance Explanation in Practice* - Explanation of creative finance concept in dealing with sellers. - Clarification on the process of creating notes for financing without using upfront cash. - Discussion on the strategy of paying the seller through financing and handling the mortgage payments. 35:02 *💸 Reasons for Buying Real Estate* - Detailed breakdown of reasons for buying real estate beyond just generating cash flow. - Explanation of anticipated appreciation in value and tax benefits. - Insight into leveraging real estate investments through refinancing to access additional funds for future investments. Made with HARPA AI
The most professional sales people I’ve ever met in my life, bring up objections and disarm them before the prospect. It’s complete and total control and you make it very hard for them to say no. Especially in this case.
The way pace directs the conversation with sellers makes it look like to the seller hes the only choice and the best choice and its absolutely beatiful!
Very professional and really helpful because you know the downside of it and already put the solution in place- you empathize and put yourself in the situation because its not always about the money but People
I just got hired by a wholesaling company and I am studying up to be better on the phones. I've been binge watching your videos and I want to thank you for teaching what you teach. This is gold. I've bought all of my properties with 20-25% down payments but this is a much better strategy as long as you have a tenant paying off your debt payments!!
32:34 Thanks for clarifying! I often tell people you have two choices in any market, real estate or otherwise. You can sell it in a short time for a discount and this applies to all products someone could purchase. Or, you can sell it for more money and it will take longer to sell. Overall, creative financing is the long term play. You can give the seller everything they’re asking for, just not today. It’ll take time. I like presenting all options. Brilliant video!
I have the same question as Chris, so how will the seller want to move forward with this deal with Pace knowing he is putting those terms in the contract that states "I will not refinance until the interest rate is 2.5%"? Or is that not what you tell the seller? I can just see that becoming a problem down the line when the seller wants to collect their money.
At 40:00, he has paid down the loan a ton & gained a ton of equity. If the seller calls & says my wife was in an accident & I need my $100k equity, he’d be able to refinance & pay the seller with virtually any bank because the loan would be half the appraised value & it would be an easy commercial loan too because he has a proven income stream from the tenants
Pace great job educating that seller. I have a couple questions, what happens if the interest rates don’t come down in the next 2 to 4 years? What happens if the real estate market crashes and the value is 10 to 20% less? How will you pay back the seller has equity?
I hope the seller is out there who has the same situation, watching this video, Pace. Then, they may ask for help solving their's! If I had known you before, I wouldn't have gotten into the foreclosure!
Pace, love you man and I always gain valuable insight and strategies from listening to your calls. I’m also a SubTo/Gator student. Here’s the question that you didn’t touch on that I feel is extremely important for others to remember and to research…the $380 net cashflow you quoted is based on the current PITI payment. Considering the seller had significant equity and not knowing when they purchased the property, I have to assume they purchased the home probably 10+ years ago. Their tax base is probably much lower than what a new buyer would need to pay. So there will probably be a reassessment at the $340k mark. What that new annual tax amount is, I don’t know, but it is something every investor needs to be aware of and factor into their numbers. More than likely, their PITI will increase after the purchase.
This all sounds really good, I still have one unanswered question and would love if somebody could help me. Since there was no guarantee to refinance within 24 months, how long does this loan burden the seller in their life moving forward? This is a quickfix for the seller, but in the long term doesn’t having two mortgages make any subsequent financing for them more difficult, until the buyer pays off the loan? Still not convinced it’s the right thing for everyone involved.
I would have structured this deal a little differently to reduce risk to Seller and put myself as a buyer at risk with seller - 1/3 of equity in cash on closing - carry 2/3 of equity at 0% with without a monthly payment and a full loan due in 3 to 4 years - guaranteed written refinance at seven year or early Now I understand it is not gonna look as lucrative as space terms, but I believe the only way anybody will accept if they are in an extremely desperate situation or they do not know the commitment they are making
If you're not making money then you're not providing value. Money is a measurement of the value you're providing. In a free society our richest would be those who provide the most value and would be acknowledged for the heroes they are. That's the beauty of win - win voluntary trades and the true value of cooperating with other individuals. Every person out there in the world is a potential value to your own life when you embrace these principles. The productive businessmen are who's responsible for the constant increases to our standard of living. Knowledge is power so be aware and open for new opportunities to learn.
so you take over sellers loan payments & rent out the house or sell it via wholesale & use the money to pay the equity or the loan @3.75%. Waiting until rates are below 3% coukd take a long time. What if seller wants their equity money in a certain timeframe.
Not completely sure but my best guess would be getting with a PML or HML (Private Money/Hard Money Lender) and giving them 50% of the deal if they can get the seller their equity.
Also this is perfect scenario where you are putting the money to pay the agents and to pay the down payment to the seller. If you get private money to pay all that then you have to consider interest on that money, which will dilute the monthly cash flow
Payment plans available! If I would’ve know about this instead of paying $100k for a degree would’ve gladly went to Pace’s SubTo U and been richer quicker
I want to hear how the warranty deed allows the new lender on their next house to give them another mortgage. And how does that affect the tax benefit a homeowner gets when they're rolling the equity from one house to the next house without having to pay a tax on that game because it's the homeowner rollover exception.
@PaceMorby - My favorite part of this video is minute 40:00 to 41:00 LOL , so funny . This is gold though- This video is a small glimpse of what is inside the mentorhip....Just another day at the office though
34:54 So the answer is that when the interest goes down, you will then get a loan that will cover what is owed. Easy day. However, most people don’t believe that the rates are ever going to dip that low so how would you overcome a seller objection being if your plan is to refinance when rates drop and we have no reason to think that is going to then I am never going to see the equity in my house. At the very least if I were Seller, that’s what I would be thinking. Because if the equity in my house is tied up waiting for you to get a better rate, there’s a possibility that I will never see the equity in my house and I’m not sure why I would want to do that. How do you overcome that objection or how would you explain it to somebody who was thinking like I am thinking? Are you not refinancing and instead of just taking equity out of the house to pay? Can you take out equity subject to mortgage? That seems like it would be tricky. How would you do that?
Hypothetically speaking Robbie wants to upgrade to a $400k home, $20k gives him 5% down but would change the financing terms and possibly even his DTI qualifications on the new home. Qualifying on a contingency. The lender would need to see agreement to remove monthly payment. If they’re going conventional, the basis point spread will vary based on LTV - a direct response to down payment.
@Pace Morby I'm wondering about a few different things... 1. The seller still has the debt in their name, for them buying another house, how does that mortgage (on the house that you're buying Subject To) not go against their debt-to-income ratio and effect them buying the next house? **** Answered at @15:05 **** 2a. With the mortgage in their name still, they could choose to do a refinance, HELOC, or second mortgage on the property still, right? 2b.The bank doesn't know that title work was done and that the deed has been transferred... if the sellers do the above mentioned HELOC and default on the loan... and the bank begins foreclosure proceedings... what happens then? You sue the seller? The bank is just SOL, because they can't foreclose on the home and have to try to sue the seller and go for any assets that they might have? They still foreclose on the home, but go after you for the amount that you are under contract with the seller for? This is tricky.
Not an expert but have done several of these deals in past. 1) Just like any landlord lease deal, the landlord has their own house in their name and may have 5 or 10 other houses they lease out, all mortgages are IN THEIR name, but those mortgage payments are taken OFF their DtoI ratio because someone else is making the payment on those ie: the tenants, it's the same thing. 2a) The seller with the mortgage still in their name CANNOT do a refinance or heloc or whatever because they DON'T OWN the house any longer. Can't get refi money out of a house you don't own. That should answer 2b) as well since it can't happen. Hope that helps.
Meanwhile the sellers wait for their equity. Equity they could have used for furniture, new car, etc. Have any of these Gators received threats by sellers ? Since it takes years before refinancing ?
The only thing I don’t understand fully (very new to this), but like the dude that called in asked but didn’t finish imo, is, if the interest rate NEVER goes back to 2.5% (which seems very realistic rn), you just never pay him his equity? Or only when you finally sell the home down the road whenever that may be?
Pace are you buying these homes through llc's or something? And how does it affect your ability to pull money out in the future as alone against the equity you'll build up in 5 or 10 years if it's held in an LLC without having to pay tax on that loaned money?
You say for the past 8 years (in other videos you have not used your credit for anything. How then would you get a refinance if its not an FHA or if you have already exceeded FHA limit?
I do like one aspect of this deal and that is it is not a foreclosure and the law in many states and district attorneys tend to look more closely at real estate deals that are done in foreclosure because they believe the seller is under more duress and the public likes to look at those deals as the buyer is scamming the person who's about to lose their house out of their house. Well of course that's not true they're not scamming them because they're going to lose the house anyway but it's a perception problem whereas a guy like this a DA really can't make a case that somebody's ripped this guy off because the guy is probably going to buy a bigger and better house so it's his choice to sell his current home in the situation that he is in and he's got a job and he's not under the same kind of financial duress he's merely under a time frame and deal duress. And it's really only a question of how he's going to get his money not whether he's going to lose it all.
he doesn't lock in on a time frame (i.e. 24 months), the contract states he MAY do when when the rate goes below 2.5% I don't think the seller understood that, smooth but misleading.
Any listing agent worth their salt should know the settlement numbers for their seller. The payoff amount to bank should be readily available on that call.
Yes the payment you’re taking over is around $1400 a month, which you say gives you a $389 cash flow each month, but what about the monthly expense of taxes and insurance AND isn’t there a monthly payment on the money you have to borrow to pay them their $20,000 (or whatever amount they come up with ) down payment on the next house? Won’t these reduce or eliminate the positive monthly cash flow?
@@PaceMorby I get that and those are very valid reasons, but did this end up being a breakeven or negative cash flow house? after the taxes, insurance and financing to pay the owner some equity?
Even if interest rate falls to 2.5% you likely can't refinance because you will need it to be it on your credit and a primary home. And u can do that a few times not 100
I’m just now learning about subject to financing and listening to as much content as I possibly can. Can somebody help me understand a few things? The sellers name, doesn’t that continue to damage their credit for any subsequent years moving forward, until the loan is completely paid off? Also, what sources are you using to pay down the remaining loan in 24 months?
Doesn’t the seller need his equity in cash as a down payment for his new loan? Without that cash, his mortgage payment will be higher and then they’ll add PMI on top of that.
So Pace only pays equity if and when rates DROP because that’s when he refinances. But … What happens if rates go UP and it’s a decade or two before rates drop. How does this seller eventually get access to his $140k equity? If rates climb and stay high the seller loses his equity
What about needed renovations during the long term of owning the rental? Such as a new roof (big expenses). I know you said 500 a month goes to managing the property. Is the big expenses included in that?
One thing you didn't tell them. You're really not putting just a "renter" in their home. More like a tenant-buyer, so you wouldn't be replacing any "broken windows", but I respect the hustle.
The guy had to move and couldn't rent it out because it would stay on his DTI preventing him from getting a new place. Maybe the guy got a better job elsewhere. Or maybe he got laid off and got a new job across the country. Who knows. People need to move all the time. For all kinds of reasons.
What is there to be confused about? Relisten to the podcast and you will get your answer. Did you have $300 before that house🤔 Hiw about 30 houses at $300 each or 100 houses at $300 each🤔
The only real risk to the seller is when they will get their hypothetical equity that they believe they have in the house but as pace properly points out a seller doesn't really have that equity most of the time and they certainly don't have that equity if they are distressed seller like this person is who needs to sell this house fast because their primary concern is to get into the new house. Most regular people view houses as a place to live that they can afford with their current job and everything else about the process is hypothetical to them and not their main concern. They may hear that they're going to get rich off owning a home but it's not what they really think about nor is it their goal. So it's way down on the guy's list whether or not he's going to see that equity that he thinks he has now because he knows darn well that if he has to put his house back on the market tomorrow he's going to be settling for a whole lot less selling price and there goes that equity anyway. So at least he has a chance to get the equity this way whereas he knows he's going to lose a lot of that equity the minute he puts that house back on the market tomorrow and lowers his price.
Great stuff! But are really going to refi? The rate is never going to go to what the sellers rate is now or even lower. The below 4% rates are a thing if the past and most likely will never be seen again.
@@MedicalShorts191 I get it but we all know rates are never going that low again. Even if they go below 4 why would you refi into a 30 yr when the sellers loan has less years on it from paying it down. I’ve done subto I tell seller that most likely I’m never refinancing it’s less deceiving to the seller and more transparent
@medicalShorts191 yes but why would you refi a loan with an already low interest and paid down years to a me 30 year low intrest. It’s deceiving to say to the seller you will refi when you know damn well that’s not happening
If you are not paying the equity upfront to the seller his next house payment will be higher because you only giving him the minimum down payment. And he will receive the equity whenever the rates go down which is unknown. So another wards you are not helping the seller you are taking advantage of his situation. He will be paying a higher monthly payment on his new house and wait for his equity for a long time.
I’m tracking everything here so far however right now in 2024 it’s doubtful that the rates are going to drop below the 3.74 that the sellers have. So when you refinance, you’re not refinancing to a lower rate, you will refinance to our higher rate. Are you OK with that? And if so, why?
The question is? Are people not buying houses today with over 7% interest rate🤔 If rates not falling but my rents cover the refinance rates what is the problem? I can also sell the property.
He said he won't refinance until it's lower...who wants to wait 7 years or more for that? That money will be less then than if he gets less now by selling it for less.
My concern for Robbie is this: He now has to trust Pace to pay the loan on the Cutter house. Where is the verification that Robbie isn’t stuck with 2 loans if Pace can’t refi for a lower rate in 24 months? Too high risk for my comfort level.
Wouldn’t we have to at least wait until the principle balance is less than ~80% of the appraised value to refinance? Who would finance a re-fi at 100% LTV?
19:35: When bonds are paying 5.4% right now....$389/mo is 5.4% of $86,000 so if you pay more than that for this deal...then its not a good deal, right? If you are counting on higher equity in the future, its not a guarantee its a gamble.
Love you pace. I will say it does seem a little misleading. As you said you will shoot for 24 months. Seems a bit like a bait and switch as you said it will probably be 5-7 years They may be relying on that equity. And it is HIGHLY unlikely rates will go back to 3%. So it is speculating on the future rates. So what if never does not go back down? At 24 months they are expecting. Layout and you say sorry the contract says XYZ.
Pace said on the phone most seller get their equity in 2~4yrs, $120k in this example. If you dont refinance, wheres the $120k to pay Robert comng from?
What happens if they subto buyer files bankruptcy before paying the seller the equity they have in the house? Is there a form done between the subto buyer and seller where the purchased house goes back to the mortgage holder if there is a default by the person paying the mortgage? Lots of faith by the seller that the subtio folks do what is promised for possibly a long period of time.
This was a master at work, He basically broke down sub two in that little bit of time, and he killed the call from the very start when he asked the questions about the kids and the rooms wow. My favorite part was the phenomenal breakdown of the mortgage regarding the payment of $340, Absolutely brilliant.
Thanks man, really appreciate you!
you're gonna look back at this and realize how simple it was. genius.
@PaceMorby I wanna be a genius like you when i grow up! lol
Pace is the master. Non solicited testimonial. I am not an official student/member . . . Yet. Have been in the crei biz for way more than a decade. Whathe is sharing is absolutely right on. When I recover from a hurricane disaster I will be one of Pace's students. This is real guys. Listen to this a bazillion times and then lip-sync him to get comfortable with the process. EVERY minute, every HALF minute is pure gold.
@@PaceMorbyPLEASE TELL ME HOW THIS UNDERWRITER WRITES OUT THIS DEAL WHERE THE EXISTING MORTGAGE DOESNT SHOW UP ON SELLER SO HE CAN BUY ANOTHER HOME I MEAN THATS THE WHOLE DEAL YOU CANT EVEN DO THIS DEAL WITHOUT THAT INFO ! I NEED THIS INFO ALSO WHO IN REAL ESTATE IS GOING TO KNOW AND HELP PUT THIS DEAL TOGETHER LEGALLY WHAT PEOPLE DO I NEED TO MAKE IT TANG-ABLE AS FAR AS PAPER WORK AND SENDING TO WHOEVER TO HAVE IT LEGAL ? LISTEN I TALK TO LENDERS AND THEY ALWAYS TELL ME I CANT BUY ANOTHER HOME BECAUSE I OWN A HOME AND I DONT MAKE ENOUGH MONEY TO AFFORD TWO LOANS ITS RIDICULOUS LITERALLY GOING TO RENT THE NEW HOUSE OUT I JUST AM AT MY WITS END I NEED YOU !
As a mortgage lender the issue I see with this conversation is that the seller is still financially obligated to the payments on the subject property. Therefore it is not as simple as just giving them 20k to go through with the pending purchase of their new home. They would have to qualify for the new mortgage with both the existing mortgage payment that Pace is taking over AND the new payment on their new home. The only other option is to lease it to Pace prior to closing to negate the debt and then finish the Sub To transaction after they close on the new home.
This is GOLD!!! I’m about to call a seller right now that’s been trying to sell their property for over a year and 3 months. Wish me good luck.
Good luck man!
@@PaceMorbyI have a great deal in McComb ms that this video will help. So genius! Is there anyone that would like to participate or know how I can give it to pace?
You made it sound like you were going to pay the seller his full equity within a 3-5 year term. I don't have a crystal ball either, but I'm willing to bet that you're not going to get a 3.75% interest rate or lower within that amount of time, so how are you going to pay off the seller's equity in under the 5 years that you suggested? You are very misleading & that's what you are teaching us??? I give you credit for being a smooth talker & you definitely know special finance well, but some of what you say can come off as shady (if you need to clarify what you said and what you meant), and you also come off as really arrogant. Wow, and you don't refinance most of your deals, so the seller is stuck with 2 mortgages under their name and waiting for you to pay them their equity. Just saying... shady. If you would just be straight with the seller, I'm sure you would get the same result. OMG, every time someone asks you when the seller can be expected to get his equity paid in full, you dance around the question and tell the other person that they are over complicating it. Please just be straight with people. Shady is not a good look on anyone.
I would like to add that he did say that most (80% of clients) don’t worry about getting paid their equity for 3-4 years, however, to your point he ALSO said that “he knew this is family money and therefore would aim to pay it off in 24 months (probably)”. That, I agree is misleading and shady. Especially when you know you almost never refi the loans and it is extremely unlikely for us to see sub 3.75 rates in the next 24 months. That being said, he definitely doesn’t get off scotch free without paying their equity at all. I’m going off on a limb here (bc I also don’t understand how the equity is paid without refinancing) but if I had to guess how he does it, it’s probably using a Private Money Partner to pay it off by collateralizing his own “equity” that has been built into the property by paying down the loan over the last 5-7 years. If this is incorrect, someone please share because I would like to know how the equity is paid off to the seller if there is no refinance!
On the same note, I’m not understanding how the PMP is getting paid back in these scenarios such as the down payment/commissions/closing costs or in a situation where they pay off the sellers equity. Can anyone elaborate?
@@Hunter.Hawkins
@bymilliebphotography8249
The lender is getting paid back through cash flow/ equity, or just in it for the equity if the property is not cash flowing well enough to get funds back in a reasonable amount of time. It depends on what the lender wants. Private money lenders want interest and private money partners want equity and part ownership thus are in it for longer. There’s something called a DSCR loan where you can refinance based off of how well the property performs over a 2 year period (for example) which is my presumption of why he mentioned 24 months. Yes the seller does have 2 mortgages in their name but only the new one will affect their debt to income ratio/ credit. Pace is fixing this family’s main issue and that is that they need to sell as soon as possible and get moved into the new property as soon as possible. At first glance it looks shady, but this is far from the actual case. If you have any more questions you’re welcome to message me. ✌️❤️
The better part is he’s literally getting an interest free rate of 140k if the seller was smart they would as for interest payments on that 140k of equity honestly if the seller was smart they would just pull some equity use it to fix the house and then rent it themselves and cut out the middle man it’s not like they even need to manage it or they could pocket that management fee he’s just a smooth talker and down plays things or breezes over them in a manner that makes it seem like both are winning
🎯 Key Takeaways for quick navigation:
00:00 *📞 Introduction to the Seller and Situation*
- Pace introduces himself as a real estate investor.
- Discussion about the seller's situation and their plans.
- Pace offers to explain creative finance as a potential solution for the seller.
01:47 *💰 Explanation of Creative Finance and Terms*
- Pace explains the concept of creative finance.
- Benefits of creative finance for the seller, such as quick closing and flexibility.
- Discussing the focus on terms rather than price in creative finance deals.
03:23 *🔑 Benefits and Challenges of Creative Finance*
- Pace outlines the advantages for him as the buyer in a creative finance deal.
- Addressing challenges, such as dealing with equity and payment structures.
- Explanation of how commissions and expenses are handled in creative finance transactions.
08:25 *💡 Creative Finance Deal Structuring Discussion*
- Explanation of potential deal structures in creative finance.
- Importance of determining seller's interest and minimum down payment.
- Detailed scenario walkthrough with considerations for a smooth transaction.
09:50 *🏡 Simplifying Creative Finance Process for Sellers*
- Pace explains the process of him taking over payments and handling commissions.
- Real-life example of a similar deal solved using creative finance solution.
- Addressing seller's concerns and emotional aspects in the deal-making process.
11:14 *💰 Handling Equity and Payment Terms in Creative Finance*
- Detailed explanation of handling equity in a creative finance deal.
- Discussion on repayment terms and refinancing strategies.
- Managing monthly payments and long-term financial strategies in creative finance transactions.
16:39 *🏡 Creative Financing Strategy Discussion*
- Explanation of showing the new lender the change in payment responsibility.
- Importance of ensuring financial feasibility and understanding debt-to-income ratio.
- Collaboration with the current lender for a smooth transition to the new loan.
19:26 *💸 Evaluating Cash Flow Potential in Creative Finance*
- Detailed breakdown of potential cash flow calculations in a creative finance deal.
- Emphasis on managing expenses and ensuring positive monthly cash flow.
- Factors influencing cash flow, such as rental rates and expense budgets.
20:32 *💡 Value in Creative Finance Deals*
- Explanation of the true value in creative finance deals beyond purchase prices.
- Emphasizing the benefits of low down payments and takeover of existing low-interest rates.
- Introduction to leveraging private money partners for deal financing and sharing profits.
24:24 *📞 Effective Communication with Sellers*
- The importance of building rapport and creating a connection with sellers during phone calls.
- Addressing objections and sympathizing with the seller's situation.
- Planting seeds for future discussions and ensuring the seller's understanding of their best solution.
27:04 *💰 Addressing Equity and Refinancing Terms*
- Explaining the process of handling equity payment and refinancing in creative finance deals.
- Clarifying the role of transaction coordinators in setting terms for refinancing.
- Emphasizing the importance of clear communication and avoiding overwhelming sellers with excessive information.
30:28 *💡 Focus on Speed and Effective Deal Structuring*
- Identifying and addressing the seller's primary objection to expedite the deal process.
- Contrasting the mentality of cash transactions with the benefits of creative finance in terms of equity and deal structuring.
- Highlighting the advantages of creative finance in providing win-win solutions for all parties involved.
32:58 *🔀 Creative Finance Explanation in Practice*
- Explanation of creative finance concept in dealing with sellers.
- Clarification on the process of creating notes for financing without using upfront cash.
- Discussion on the strategy of paying the seller through financing and handling the mortgage payments.
35:02 *💸 Reasons for Buying Real Estate*
- Detailed breakdown of reasons for buying real estate beyond just generating cash flow.
- Explanation of anticipated appreciation in value and tax benefits.
- Insight into leveraging real estate investments through refinancing to access additional funds for future investments.
Made with HARPA AI
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The most professional sales people I’ve ever met in my life, bring up objections and disarm them before the prospect. It’s complete and total control and you make it very hard for them to say no. Especially in this case.
That's a good network! The agent is bringing you deals, and prepping a good lender the seller's next purchase. Very good convo, Pace!
Thanks!
Pace is a gangster. Dude is a beast! Great teacher. Makes it look so freakin easy! I’ve watched this call several times and it doesn’t get old.
The way pace directs the conversation with sellers makes it look like to the seller hes the only choice and the best choice and its absolutely beatiful!
I am the best choice!
Professional, empathetic, strategic, educational. Gold ✨️
Thank you!
Awesome video Pace! I closed my subto deal today learned from you. I am in the process of joining the Top Tier TC program ❤🎉
Let's go! That's awesome so happy for you.
Very professional and really helpful because you know the downside of it and already put the solution in place- you empathize and put yourself in the situation because its not always about the money but People
I just got hired by a wholesaling company and I am studying up to be better on the phones. I've been binge watching your videos and I want to thank you for teaching what you teach. This is gold. I've bought all of my properties with 20-25% down payments but this is a much better strategy as long as you have a tenant paying off your debt payments!!
That is awesome!
Have you ever had a seller ask for a guaranteed time to repay the equity and if not how would you answer that?
32:34 Thanks for clarifying! I often tell people you have two choices in any market, real estate or otherwise. You can sell it in a short time for a discount and this applies to all products someone could purchase. Or, you can sell it for more money and it will take longer to sell.
Overall, creative financing is the long term play. You can give the seller everything they’re asking for, just not today. It’ll take time. I like presenting all options.
Brilliant video!
I have the same question as Chris, so how will the seller want to move forward with this deal with Pace knowing he is putting those terms in the contract that states "I will not refinance until the interest rate is 2.5%"? Or is that not what you tell the seller? I can just see that becoming a problem down the line when the seller wants to collect their money.
I guess all the smart questions are still unanswered here in this comments ! Only flowers and roses they see:)))
At 40:00, he has paid down the loan a ton & gained a ton of equity. If the seller calls & says my wife was in an accident & I need my $100k equity, he’d be able to refinance & pay the seller with virtually any bank because the loan would be half the appraised value & it would be an easy commercial loan too because he has a proven income stream from the tenants
@@butchgreenebut why would he refinance at a higher interest rate??? So let's say it doesn't ever go down?
PACE...you always bring the FIRE and so much value! LOVE LOVE LOVE your style and your brilliance. THANK YOU for sharing with us!
This video came out at the PERFECT! time for me. Cleared up so many questions. Thank you Pace
You and me both! :) Good luck!! :)
Glad you enjoyed!
Pace great job educating that seller. I have a couple questions, what happens if the interest rates don’t come down in the next 2 to 4 years? What happens if the real estate market crashes and the value is 10 to 20% less? How will you pay back the seller has equity?
I refinance "when rates go lower"
When is that exactly?
What i love is that you're taking future profit from a bank by not refinancing at a higher rate instead of current equity from the seller
I hope the seller is out there who has the same situation, watching this video, Pace. Then, they may ask for help solving their's!
If I had known you before, I wouldn't have gotten into the foreclosure!
You’re on fire pace. That call, that deal, insane. You’re extremely on point and well spoken and know exactly what to do!
Thanks so much! Glad you got value out of it!
This is such a great call, Pace you are the "GOAT" !!!!!
Thanks glad you enjoyed it
Pace, love you man and I always gain valuable insight and strategies from listening to your calls. I’m also a SubTo/Gator student. Here’s the question that you didn’t touch on that I feel is extremely important for others to remember and to research…the $380 net cashflow you quoted is based on the current PITI payment. Considering the seller had significant equity and not knowing when they purchased the property, I have to assume they purchased the home probably 10+ years ago. Their tax base is probably much lower than what a new buyer would need to pay. So there will probably be a reassessment at the $340k mark. What that new annual tax amount is, I don’t know, but it is something every investor needs to be aware of and factor into their numbers. More than likely, their PITI will increase after the purchase.
This all sounds really good, I still have one unanswered question and would love if somebody could help me. Since there was no guarantee to refinance within 24 months, how long does this loan burden the seller in their life moving forward? This is a quickfix for the seller, but in the long term doesn’t having two mortgages make any subsequent financing for them more difficult, until the buyer pays off the loan? Still not convinced it’s the right thing for everyone involved.
I would have structured this deal a little differently to reduce risk to Seller and put myself as a buyer at risk with seller
- 1/3 of equity in cash on closing
- carry 2/3 of equity at 0% with without a monthly payment and a full loan due in 3 to 4 years
- guaranteed written refinance at seven year or early
Now I understand it is not gonna look as lucrative as space terms, but I believe the only way anybody will accept if they are in an extremely desperate situation or they do not know the commitment they are making
If you're not making money then you're not providing value. Money is a measurement of the value you're providing. In a free society our richest would be those who provide the most value and would be acknowledged for the heroes they are. That's the beauty of win - win voluntary trades and the true value of cooperating with other individuals. Every person out there in the world is a potential value to your own life when you embrace these principles. The productive businessmen are who's responsible for the constant increases to our standard of living. Knowledge is power so be aware and open for new opportunities to learn.
Boom. Mic drop.
so you take over sellers loan payments & rent out the house or sell it via wholesale & use the money to pay the equity or the loan @3.75%. Waiting until rates are below 3% coukd take a long time. What if seller wants their equity money in a certain timeframe.
Not completely sure but my best guess would be getting with a PML or HML (Private Money/Hard Money Lender) and giving them 50% of the deal if they can get the seller their equity.
I have the same exact question
What if the interest rates never go under 3.75? Or it doesn't happen until after 10 years?
Also this is perfect scenario where you are putting the money to pay the agents and to pay the down payment to the seller. If you get private money to pay all that then you have to consider interest on that money, which will dilute the monthly cash flow
It seems to be a very good but very long term strategy
@Pace you are a BEAST man. The only question I have is, how can you refinance if the loan is not in your name?
He’s using a deed transfer
1:29 Thank you Pace Great call
Glad you enjoyed!
Thanks Pace and community, learning a lot. Appreciate you
Glad to hear it! Thanks for being here!
I called your program and asked for help and your guys asks for 9k? Wow!
Payment plans available! If I would’ve know about this instead of paying $100k for a degree would’ve gladly went to Pace’s SubTo U and been richer quicker
Same for me but he wanted 12k
9.8 k, if you change your mind lmk so I can refer you
I want to hear how the warranty deed allows the new lender on their next house to give them another mortgage. And how does that affect the tax benefit a homeowner gets when they're rolling the equity from one house to the next house without having to pay a tax on that game because it's the homeowner rollover exception.
🏆 this is the greatest videos explaining how real estate is so powerful
Thank you glad you enjoyed it
You are awesome!!! These are the best videos on investing i've seen yet...and i've seen ALOT.
pace, you are awesome, putting all the pieces together
I appreciate that!
Chris isn't overcomplicating anything.He simply has integrity.
@PaceMorby - My favorite part of this video is minute 40:00 to 41:00 LOL , so funny . This is gold though- This video is a small glimpse of what is inside the mentorhip....Just another day at the office though
Exactly!
Wow! That was awesome the way u broke everything down.
34:54 So the answer is that when the interest goes down, you will then get a loan that will cover what is owed. Easy day. However, most people don’t believe that the rates are ever going to dip that low so how would you overcome a seller objection being if your plan is to refinance when rates drop and we have no reason to think that is going to then I am never going to see the equity in my house. At the very least if I were Seller, that’s what I would be thinking. Because if the equity in my house is tied up waiting for you to get a better rate, there’s a possibility that I will never see the equity in my house and I’m not sure why I would want to do that. How do you overcome that objection or how would you explain it to somebody who was thinking like I am thinking?
Are you not refinancing and instead of just taking equity out of the house to pay? Can you take out equity subject to mortgage? That seems like it would be tricky. How would you do that?
I talked to a lawyer today. He said you shouldn't transfer the deed while taking over payments because of due on sale clauses in mortgages.
Hypothetically speaking Robbie wants to upgrade to a $400k home, $20k gives him 5% down but would change the financing terms and possibly even his DTI qualifications on the new home. Qualifying on a contingency. The lender would need to see agreement to remove monthly payment.
If they’re going conventional, the basis point spread will vary based on LTV - a direct response to down payment.
@Pace Morby I'm wondering about a few different things...
1. The seller still has the debt in their name, for them buying another house, how does that mortgage (on the house that you're buying Subject To) not go against their debt-to-income ratio and effect them buying the next house? **** Answered at @15:05 ****
2a. With the mortgage in their name still, they could choose to do a refinance, HELOC, or second mortgage on the property still, right?
2b.The bank doesn't know that title work was done and that the deed has been transferred... if the sellers do the above mentioned HELOC and default on the loan... and the bank begins foreclosure proceedings... what happens then? You sue the seller? The bank is just SOL, because they can't foreclose on the home and have to try to sue the seller and go for any assets that they might have? They still foreclose on the home, but go after you for the amount that you are under contract with the seller for?
This is tricky.
Not an expert but have done several of these deals in past. 1) Just like any landlord lease deal, the landlord has their own house in their name and may have 5 or 10 other houses they lease out, all mortgages are IN THEIR name, but those mortgage payments are taken OFF their DtoI ratio because someone else is making the payment on those ie: the tenants, it's the same thing.
2a) The seller with the mortgage still in their name CANNOT do a refinance or heloc or whatever because they DON'T OWN the house any longer. Can't get refi money out of a house you don't own. That should answer 2b) as well since it can't happen. Hope that helps.
Meanwhile the sellers wait for their equity. Equity they could have used for furniture, new car, etc. Have any of these Gators received threats by sellers ? Since it takes years before refinancing ?
There’s no equity to wait for if you can’t sell the house…if there was a better deal, it already would have sold.
The only thing I don’t understand fully (very new to this), but like the dude that called in asked but didn’t finish imo, is, if the interest rate NEVER goes back to 2.5% (which seems very realistic rn), you just never pay him his equity? Or only when you finally sell the home down the road whenever that may be?
Cool, Calm and Collected. Impressive, as usual and extremely helpful.
Glad it was helpful!
The payment is $1411 but how is that broken down? PITI? Who carries the insurance? Taxes?
Pace are you buying these homes through llc's or something? And how does it affect your ability to pull money out in the future as alone against the equity you'll build up in 5 or 10 years if it's held in an LLC without having to pay tax on that loaned money?
Needed this thanks pace
Happy to help
Great work bro,learning lots from ya.Thank you🤙
My pleasure!
You say for the past 8 years (in other videos you have not used your credit for anything. How then would you get a refinance if its not an FHA or if you have already exceeded FHA limit?
The question is ....if it take 15 year for rates to go down that much....are you basically tricking them into waiting forever?
Mahalo -Thank you Pace …excellent call as an example…Aloha!
This was incredible! I need to learn this. I own 17 houses 22 doors & ready to scale!
I do like one aspect of this deal and that is it is not a foreclosure and the law in many states and district attorneys tend to look more closely at real estate deals that are done in foreclosure because they believe the seller is under more duress and the public likes to look at those deals as the buyer is scamming the person who's about to lose their house out of their house. Well of course that's not true they're not scamming them because they're going to lose the house anyway but it's a perception problem whereas a guy like this a DA really can't make a case that somebody's ripped this guy off because the guy is probably going to buy a bigger and better house so it's his choice to sell his current home in the situation that he is in and he's got a job and he's not under the same kind of financial duress he's merely under a time frame and deal duress. And it's really only a question of how he's going to get his money not whether he's going to lose it all.
Where are you getting the cash to pay the realtor commission and closing?
My question is what if you can’t refinance, what if for the next 2-6 years the rates are higher than what you locked it in for?
Was wondering this too
he doesn't lock in on a time frame (i.e. 24 months), the contract states he MAY do when when the rate goes below 2.5%
I don't think the seller understood that, smooth but misleading.
@@OneLeggedTarantulamisleading
@@OneLeggedTarantulathat's so misleading and fucked up cause if he signs a contract where he can't get out of it....then what if I takes 20 years 😅
What happens if you you died or something happens if you could not complete the deal ?
Any listing agent worth their salt should know the settlement numbers for their seller. The payoff amount to bank should be readily available on that call.
Yes the payment you’re taking over is around $1400 a month, which you say gives you a $389 cash flow each month, but what about the monthly expense of taxes and insurance AND isn’t there a monthly payment on the money you have to borrow to pay them their $20,000 (or whatever amount they come up with ) down payment on the next house? Won’t these reduce or eliminate the positive monthly cash flow?
I don't buy houses just for the cash flow though. Depreciation and other factors are why I buy real estate too.
@@PaceMorby I get that and those are very valid reasons, but did this end up being a breakeven or negative cash flow house? after the taxes, insurance and financing to pay the owner some equity?
The mortgage is 1,411 and in that mortgage payment taxes and insurance are included
@@ClayThelinHow do you know that without knowing what the buyers original loan amount was for
If rates do not fall below the assumed loan rate, then what? How will the seller receive the equity?
There are a couple other options, such as sell the property if it comes to that
Lose your up front investment
Yes, this only works assuming rents and housing prices always increase.
How are you paying off their equity in 2 years? And what interest rate are you paying for loaning you that amount?
What happens if the buyer defaults on payments?
Very smooth closer! bravo! 👏
Very smooth lol 🔥
They cherry pick the most motivate people out of THOUSANDS of leads they're getting from their "students" and so it looks easy.
Even if interest rate falls to 2.5% you likely can't refinance because you will need it to be it on your credit and a primary home. And u can do that a few times not 100
35:37 6 resons why we buy real estate
I’m just now learning about subject to financing and listening to as much content as I possibly can. Can somebody help me understand a few things? The sellers name, doesn’t that continue to damage their credit for any subsequent years moving forward, until the loan is completely paid off? Also, what sources are you using to pay down the remaining loan in 24 months?
Reality check. Interest rates may never ever go below 4% for a loooong time.
Those interest rates were excessively they are NOT going that low for a long time. Not in our life times. They are going much higher.
What do you tell his new lender that will allow him to get a new loan without 20% down? How are you going to raise rent that much?
Doesn’t the seller need his equity in cash as a down payment for his new loan? Without that cash, his mortgage payment will be higher and then they’ll add PMI on top of that.
He did not need it.
Very rare situation
@vividhaiku very common situation
This looks simple awesome
I don’t understand how the mortgage broker would be able to close the new loan on the new house when they still have the mortgage in their name?
So Pace only pays equity if and when rates DROP because that’s when he refinances. But … What happens if rates go UP and it’s a decade or two before rates drop. How does this seller eventually get access to his $140k equity? If rates climb and stay high the seller loses his equity
What about needed renovations during the long term of owning the rental? Such as a new roof (big expenses). I know you said 500 a month goes to managing the property. Is the big expenses included in that?
One thing you didn't tell them. You're really not putting just a "renter" in their home. More like a tenant-buyer, so you wouldn't be replacing any "broken windows", but I respect the hustle.
Really great job. What do you do if house marked go down? Then you can't free the equaty with a refinance.
I wish that system would work here.
dam good job excellent presentation
Much appreciated!
What a beast! Great job Pace!
Appreciate it!
I’m gonna try remember this whole verse of pace pitching sub to here..not gold nuggets but gold BARS
Gold bars I like that!
This is gold. Thank you!
Glad you enjoyed it!
Im confused 😕. Why give away all the equity? Besides the cash flow what’s the benefit? $300 a month is not worth it.
The guy had to move and couldn't rent it out because it would stay on his DTI preventing him from getting a new place. Maybe the guy got a better job elsewhere. Or maybe he got laid off and got a new job across the country. Who knows. People need to move all the time. For all kinds of reasons.
It will still affect dti
What is there to be confused about? Relisten to the podcast and you will get your answer. Did you have $300 before that house🤔 Hiw about 30 houses at $300 each or 100 houses at $300 each🤔
How do you take over someone else's bank loan without getting the bank involved without you being on that mortgage loan
Pace is The Best!
Aw shucks.
Pure. Gold.
Pace what about taxes and insurance?
The only real risk to the seller is when they will get their hypothetical equity that they believe they have in the house but as pace properly points out a seller doesn't really have that equity most of the time and they certainly don't have that equity if they are distressed seller like this person is who needs to sell this house fast because their primary concern is to get into the new house. Most regular people view houses as a place to live that they can afford with their current job and everything else about the process is hypothetical to them and not their main concern. They may hear that they're going to get rich off owning a home but it's not what they really think about nor is it their goal.
So it's way down on the guy's list whether or not he's going to see that equity that he thinks he has now because he knows darn well that if he has to put his house back on the market tomorrow he's going to be settling for a whole lot less selling price and there goes that equity anyway. So at least he has a chance to get the equity this way whereas he knows he's going to lose a lot of that equity the minute he puts that house back on the market tomorrow and lowers his price.
Great stuff! But are really going to refi? The rate is never going to go to what the sellers rate is now or even lower. The below 4% rates are a thing if the past and most likely will never be seen again.
he said he won’t until the interest rates go down. so unless the rates go down then no he isn’t.
@@MedicalShorts191 I get it but we all know rates are never going that low again. Even if they go below 4 why would you refi into a 30 yr when the sellers loan has less years on it from paying it down. I’ve done subto I tell seller that most likely I’m never refinancing it’s less deceiving to the seller and more transparent
@medicalShorts191 yes but why would you refi a loan with an already low interest and paid down years to a me 30 year low intrest. It’s deceiving to say to the seller you will refi when you know damn well that’s not happening
If you are not paying the equity upfront to the seller his next house payment will be higher because you only giving him the minimum down payment. And he will receive the equity whenever the rates go down which is unknown. So another wards you are not helping the seller you are taking advantage of his situation. He will be paying a higher monthly payment on his new house and wait for his equity for a long time.
IF a seller agrees to everything on a contract,where are you taking advantage of them🤔
I’m tracking everything here so far however right now in 2024 it’s doubtful that the rates are going to drop below the 3.74 that the sellers have. So when you refinance, you’re not refinancing to a lower rate, you will refinance to our higher rate. Are you OK with that? And if so, why?
They won't
The question is? Are people not buying houses today with over 7% interest rate🤔 If rates not falling but my rents cover the refinance rates what is the problem? I can also sell the property.
He said he won't refinance until it's lower...who wants to wait 7 years or more for that? That money will be less then than if he gets less now by selling it for less.
My concern for Robbie is this: He now has to trust Pace to pay the loan on the Cutter house. Where is the verification that Robbie isn’t stuck with 2 loans if Pace can’t refi for a lower rate in 24 months? Too high risk for my comfort level.
Wouldn’t we have to at least wait until the principle balance is less than ~80% of the appraised value to refinance? Who would finance a re-fi at 100% LTV?
This was so enlightening! Thank you
You are so welcome!
I can do this!!
Great content Pace. As usual. How can i reach out to you about a AirBNB opportunity in Greenville, NC? Waking distance from the ECU stadium.
19:35: When bonds are paying 5.4% right now....$389/mo is 5.4% of $86,000 so if you pay more than that for this deal...then its not a good deal, right? If you are counting on higher equity in the future, its not a guarantee its a gamble.
Wow, this is amazing!
Happy you're getting value from it!
Brilliant!
Love you pace. I will say it does seem a little misleading. As you said you will shoot for 24 months. Seems a bit like a bait and switch as you said it will probably be 5-7 years They may be relying on that equity. And it is HIGHLY unlikely rates will go back to 3%. So it is speculating on the future rates. So what if never does not go back down? At 24 months they are expecting. Layout and you say sorry the contract says XYZ.
Pace said on the phone most seller get their equity in 2~4yrs, $120k in this example. If you dont refinance, wheres the $120k to pay Robert comng from?
If rates haven't gone up when you're refinancing, you could sell the house
What happens if they subto buyer files bankruptcy before paying the seller the equity they have in the house? Is there a form done between the subto buyer and seller where the purchased house goes back to the mortgage holder if there is a default by the person paying the mortgage? Lots of faith by the seller that the subtio folks do what is promised for possibly a long period of time.