Explaining a Deal Step by Step to a Beginner | Live Training
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- Опубликовано: 30 сен 2024
- Welcome to our latest Real Deal, where we take you on a journey to see how we acquired a great real estate deal. In this episode, we randomly met a subscriber who was a QT worker and had never done a deal before. We decided to invite him to join us to see a house and take the opportunity to teach him the process step-by-step, breaking it down for beginners.
Join us as we discuss the ins and outs of real estate deals, share tips and tricks for success, and provide valuable insights for anyone looking to get started in the world of real estate investing. Whether you're a seasoned pro or just starting out, this video is a must-watch for anyone interested in real estate.
Don't forget to subscribe to our channel for more great content and updates on the latest real estate news and trends. Thanks for watching!
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🚧🚧🚧 DISCLAIMER 🚧🚧🚧
❎ 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as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other and may be outdated or inaccurate; it is your responsibility to verify all information yourself.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 RUclips video for entertainment purposes ONLY ❎
This is not a good segment , this is crazy unbelievably detailed session all live. NO Fluff !!!!!!!! Thank you Pace ! cnt wait ...
AA
Its good.
This is a phenomenal video, appreciate you taking this time to explain and showing us how you do it. You and your team are so great for so many people
Met you on the road in Salt Lake this last weekend, and this continues to be the most valuable content in my feed! Pace, you the man!
I am so ready to partner up with someone from the Pace Team.... Good name Huh ?.... "The Pace Team" I wont even charge for that !
Also in salt lake!!
What I don’t understand, is why a seller would move to a new market looking for a home, with an existing mortgage attached to their name. How are they supposed to get another home mortgage when they still have an active one? I understand they are getting monthly cash flow from the buyer via Subject To, but the seller still has a loan with the bank, and will have to go get a second loan with a bank for their new home. So doesn’t this put the seller in a tough situation to secure a second home mortgage?
Hey Pace, I have been an investor for 25 years and I love the way you explain things!!! . I am familiar with Straight Line depreciation. My CPA cant find anything on the 7 year depreciation. Can you give me the info from the IRS on where to find it?
_"You do 10 of these, and you will retire the richest person in your family."_
That hit so hard!! It's time to start finding sub-to deals. LFG!!!
There are a ton of details left out and incorrect info that people need to understand before doing this and not getting hurt. The math is not mathing. To name a few:
1) 575k loan at 4% is not 2300/mo, it’s $2745/mo. And you need to add taxes and insurance and PMI. Cash Flow is waaay lower.
2) You’re upside down the 45k in expenses plus the amount it’s dropped in value from the start.
3) not being able to rent it long-term and cover the expenses and relying on padsplit which is an unproven model is very risky. If the only rental strategy is short term or mid term rental, you’re taking on a lot of risk, especially with regulation coming fast and hard on Airbnb‘s.
4) The tax write-offs are great and is a real benefit. You do need to understand that if you take all that bonus depreciation upfront and you sell within the first few years, you’ll be required to pay the IRS back. A good strategy would be to do a 1031 exchange, but being forced into it is not ideal.
5) the owner is still on the hook for the mortgage and will unlikely be able to get a loan and purchase a house while this mortgage stays in place. You could be locking someone out from purchasing for 5 to 10 years, they may be OK with it or might be upset down the road when they realize what they did. If for some reason you have to refinance you will likely be at a much higher interest rate, and all cash flow likely goes out the window.
6) the projected appreciation is very aggressive, especially since we’re in a downturn. From 08 it took a decade to fully recover. Never buy a property based on hoping for appreciation, that’s a rookie mistake.
The overall concept is good, but with this example, there is a tremendous amount of risk that most people trying to learn, will not understand and can likely get themselves into a lot of trouble. Most people don’t have the money to protect themselves if things don’t work out perfectly. I listed the above to help educate people who will see this as a way to get rich quick with no money out of pocket, that is not the case here. You get rich slowly, and need to consider risk when making investments. I don’t want to see anyone get hurt, learn all the details and be smart about your investing strategy. Good luck.
This is why Pace is the man! Handing out nuggets of knowledge.
Huge question- how do you make the seller comfortable with carrying the debt on paper? That will dig into their DTI ratio when they go to purchase another property
I would say that being that your purchasing a home with a seller in distress is the key point. Once seller is in distress the property going into foreclosure is the issue. Getting the seller out of foreclosure is best part for them plus they can get some money out of a bad situation.
There are ways to handle that.
You handle that with the contract. When the seller looks to qualify for a new home they send your contract to the lender and they write that off the dti in underwriting. Simple.
Thank you Pace the end where you explain the numbers and how to UTILIZE are my favorite parts! I get the concept no doubt but learning how to tr*mp is what i desire. May these videos Return 100 fold!
Thank you for being a giver Pace! I'm not a sub to student yet...I've always been afraid of subto because of my lack of knowledge in this area. I've watched tons of your videos, this video alone has answered so many of my action-stopping questions. Thank you and to the fan that made this video more than what you were already going to gift us with! Keep prospering fella!
It’s time to get into the game! Nothing to be scared of!
This was awesome! I heard Pace on bigger pockets yesterday for the first time and I already have a call with his team set up for tomorrow. Unreal how cool subto and seller finance and hybrid deals are. Thank you for this info!!
Where r u today? Three months later?
Not to be morbid, but what happens if the seller dies? What happens with mortgage? Due on sale clause?
how does carrying the mortgage affect the seller's credit (for buying another home)? Do they claim the payment you are making on the mortgage as income?
That’s a crazy good question
And who would give up the rights/deed to the property but still have the mortgage/debt under their name?
@@perezgardeningservice9677 i’ve never seen him answer this question. makes me completely question the sub to strategy. i really hope there’s a good answer to this question.
When the seller buys another home, there’s a letter/document generated to show the seller’s next transaction showing the subto agreement/contract.
The other details and claiming as income I would figure (haven’t heard, but figuring) that not having a deed implies that the seller has no gains or rights to gain.
Anyone who has actually experienced subto correctly can comment to correct or confirm.
I hope this helps.
Love the breakdown Pace! How is Padsplit doing as a management company? Seems like 9 tenants in 1 property could get wild
WOWWW! I SO NEEDED THIS training ! only 2 months in and this gave me a better grip on how it works !!!
Great video, I do have a question... what if the seller claims bankruptcy while you are making the monthly mortgage payment?
If the Seller in this deal still is on the debt, isn't his liability now in some random dude's hands? What if you start missing payments after taking over that part?
Great video!
I have some questions:
Is there an option for the original owner to use creative ways to cash flow their property so they don’t have to sell?
How would you explain your intention of the property to the owner in a way that makes them willing to lose potential future equity as opposed to holding the property and house hacking or something similar?
If the original owner provides seller financing, do they report that as income or does the payment go directly to their bank to cover the mortgage? Furthermore, if the pain point is significant enough, does that give the new buyer leverage and not have to offer any interest to the owner in addition to what the mortgage payment is?
Thanks
Wow!!! Pace is a freaking genius!!!!
Is previous owner responsible for mortgage payments? What happens if you stop paying the mortgage? They are no longer on the deed
that’s exactly what i’m wondering and the single most important question to this strategy. sounds like the seller is totally screwed (since their name is still on mortgage) if the buyer stops making payment. if that’s the case, all this strategy does is take advantage of innocent and uneducated people.
Wow! Another great video with amazingly valuable content! Thank you for doing these videos, they really help a lot. You're awesome Pace!
Pace! Dude! This is exactly what I needed to finally make this a priority. Thank you and your team so much for making this for us.
first time watching this videos very helpful I'm struggling to get my own house. That's the best way. Thank you.
This is a *great* video. Thanks Pace and everyone involved!
Pace you are the real deal. Thank you so for all of the information you share. #futuresub✌🏾student
My question is if you want to sell this house how it’s gonna work? if the mortgage is on the name of the owner before you.
Amazing lessons and valuable coaching Pace breaking down all the options on the wall was great!!!
Awesome video Pace. Learned a lot and sure the guy came out of this video better off. Awesome how he doesn't even care about his wife calling him. Lol 😂
Wow! Great explanation Pace. Thanks a lot!
Excellent video!! Thank you 🙏🏻
bro these cut scenes you guys been using are cracking me up! give your editor a raise :D Great video btw
I have to say this is probably the most informative and knowledge based video on youtube. I seen quite a few video like these including Pace's other video but this one.... this one is it!
Thank you Pace
Pace! You are so amazing!! Me and my sister watch you and it is a dream of ours to make deals like this every day. Love the content and knowledge you bring, the way you break it down, respect. The community/network you're building is astounding and is helping so many people. Stay awesome!
❤ This video! I mostly appreciate the breakdown in the tax benefit! Thank you, Pace!
You are so welcome!
This is an amazing video. Everything is laid out in simple terms
Thank you! Glad you enjoyed the video
Love the content. Iv learned so much from your stuff. In the process now of getting my foundation's in place. Keep up the kick ass content man!
7:29 after 6 months the agent is fired, and the house goes on public listings expired listing
Pace, you rock! This is one of the best videos that simply explains how and what you do about buying the house!
The value of this video is freaking insane! Thank you! #IAmTamiGirl
This is ABSOLUTELY the best and most thorough video on the platform. Big fan!
SO MUCH GAME !
@Pace Morby I have to say I am disappointed in you. I preordered your book through the Bigger Pockets link and sent the receipt to you through your website for the book. You never sent the bonus even though I have reached out to you several times without a response. If things change you should respond and say so and not just blow people off. It doesn't seem like you.
Dude it’s in the back of the book there is a QR code to scan. Password is creativewealth
@@rtuck27 thanks for telling me. I bought it on Kindle.
@@rtuck27 dude where is it on the Kindle?
Pace I’m all ears bro and broke but learning from the best like you and Jerry Norton 🎉. I’m going to start this grind with expired home sales
Love this Benny! You got this🤝🏼
GOLD!
I have watched like 18 videos you have and this one is the best one so far. I would be a couple if grand for this!
The amount of wealthy knowledge being shared here is AMAZING!!
Amazing segment. Thank you Pace!!
Pace putting gems out. Can’t stop watching 😮
Brooo this is super great stuff thank younso much pace greatly appreciated man will get into action asap
What happens when the seller dies after you take over payments and the deed is in your name?
I want in to Pace Morby mentorship.
Absolutely taking as much as possible in ! Loving The Wall Drawing Board !
Don't you have to remove the land value prior to calculating depreciation?
I don’t understand why Pace paid $15000 vs just assuming the loan?
If he assumes the loan he would have to qualify with the lender such as credit, job history, etc. If he buys it subto he doesn’t have to do any of that.
Best explained video I've seen you do. The young man had great questions. Makes me believe I can do this.
This is a FIRE video
@PaceMorby thanks for the video.....this gives me hope of being able to be an investor and desperately need to close a deal to join your program.........so since the seller name is only on 1 thing, who gets to wrote off all the benefits you mentioned? Your LLC, estate because I am certain you didn't buy in your personal name. Only 1 house can be homestead under your PN.
@@PaceMorbyhow do u receive the depreciation benefits? In cash or credit towards what?
This is golden content here! 🔥🔥💯💯💯
This video is such a great example of how your clones have beat you to the punch teaching the world and the next gen of real estate masters. Dude picked up some new pearls but had really solid fundamentals better than most agents ;)
Digital Gold Pace!!!! Thank you! 🙌
Thank you for sharing! Loved the breakdown.
Great video breakdown. So simplistic!
My questions is: what are the negatives for the seller by staying on the mortgage? Does this make it more difficult for them to purchase a game in their new location?
Pace covers this in his biggerpockets episode or his episode with Grant Cardone.
@@jeremyleatherwood4220 thank you!
So excited watching your video, you break things down sooo well, yout the man!
Pace, you're a flipping genius, bro 🤔 👏🏾
Thank you Pace! This is an AMZING VIDEO!!!!! Much Appreciation!
OMG this is such a great video!!! it is getting me so excited to subto!!!
Amazing!!!!!!!!!!!!! I love you man! These are so so great. You answer questions before people ask them.
I'm going to have to watch this again and take notes. Such a great video.
Hey pace great video. Just a question. So in this example Does the seller then leave with only 15k or do you have to make additional payment to the seller ?
Wow this is amazing 🙏✌️
11:05 exit strategy-> monetization strategy
Pain point is the key... L
Great video! Completely awesome!
Great video!!
Pace your the man!!!! I'm a smaller portfolio owner ( 4 properties- 3 single family and 1 duplex)located just outside of Toronto Canada. Unfortunately our banking system is so regulated that our version of seller financing is limited to Vtb's where seller will offer financing but more than likely only on a small portion of the purchase price. Most lenders require the loan to be paid for on closing. Nice to see how much more viable and opportunistic REI is south of the border. I've recently read your book "Wealth without Cash" and digested alot of your fantastic RUclips content. Thank you for that! I have alot of questions that I never really hear the proper answers to? For example how can the seller guarantee the promisory note will be paid? Is that the title company's responsibility? Is a 3rd party vendor required to offer insurance to the seller? Almost like a policy on the note? And if so does the buyer pay that fee on behalf of the seller? Whose to say you stop paying the note and the bank or lender comes looking for the original owner who is not on title but still on the mortgage? I'd love to do a video with you in the future to pick your brain about alot of these questions. In the meantime keep crushing it dude! You rock!
AMAZINGLY BROKEN DOWN, I AM ON IT.
Sheesh. Way better than a college education - Thanks for the breakdown! Super excited to continue to learn from you.
I FINALLY understand!!! Thank you!!
Great video Pace
Right now with the massive real estate crash, why would a wholesale Buyer take over a bloated mortgage on a property plunging 40% in value, and massive layoffs/unemployment, CBDCs etc, unless your buyer is Larry Fink, …. But he’ll be bottom feeding at the foreclosure auctions.
okay. I am just getting ready to watch this video but first, Pace, the commercial with you and your baby girl..... can I just say she is cutie pie😊 overload. okay, now I can watch this video. but I just had to say that first...
This is amazing man will be joining you soon
Pace! This is fire. Keep dropping huge knowledge bombs bro! 💯🔥
Dude!!! Mr. Paxe, I love you bro!!!. I want to he part of this life style...I want 10 properties, as mentioned, but first let me learn buy getting more property for you
Good stuff!!!❤
What are the terms of the 45000 hard money lender loan? And how does that affect the $1500 dollar cash flow?
Won't that bring that $1500 down substantially?
Love this stuff
Nice, thanks Pace and community I learn a lot
Glad to hear it!
how do you pay the sellers mortgage without the bank finding out when the account changes?
Good stuff biut a few questions... How is the seller not at risk if you were to stop making payments, since they are still on the mortgage? And, what if the bank finds out the sellers are no longer on the deed and they call the note? How is that handled?
How does the seller get paid from selling their home?? What if they have 100k equity and you’re trying to take over their home subject to?
Depreciation only works if it's an investment property/rental correct? A typical primary house this wouldn't apply.
So how much equity does the PML get ?? And they get a check monthly until reaching $45k ? Or do they atleast make some extra money for lending you money ?
Hey Pace how can you get your closing cost to be roughly $5000? Do we not have to pay excise tax on SubTo deals? Washington state question.
It’s a great video 🙏🏽🌟
Insane value in this one video!!! 🔥🔥
What formula does Pace use to assume future value of the property? If property doesn't end up cash flowing to offset mortgage payment, what do you do?
There are many different exit strategies long term rental, short term rental, pad split, group home and if he doesn’t do one of those he could buy it even if It doesn’t cashflow to offset his taxes.
Amazing that every seller in these “how to” videos have moved out of state because of employment. LOL…. No one needs to leave their house because their hot water heater broke. It gets fixed on average within 24-48 hours, so need to even leave the house.
Your 7yr comment is not completely accurate. Are you over simplifying cost seg study?
Looks amazing but one question, if you assume the loan can the seller go out and buy another property FHA again? Does the loan have to be paid off first?