How Pace Morby Buys Rentals WITHOUT Cash or Credit (Creative Financing)

Pace Morby’s name is synonymous with creative financing. In fact, you could say that he’s brought back a revival of strategies like subject to and seller financing. He’s been so successful with these strategies that Pace has been able to buy over six hundred rental units this year without using a single bank loan! He believes that now, even with rising interest rates and high inflation, rookie investors have a chance to get better deals than ever before!
Welcome to this week’s episode, where we’re live from BPCon2022! We’ve brought in Pace Morby, friend of BiggerPockets, to talk about everything related to creative finance. If you’re brand new to this topic, don’t be alarmed. While some of Pace’s methods may sound complicated, they aren’t actually so difficult in practice. And in just one episode with Pace, you could be convinced to try them out on your next deal!
Pace shares how he’s finding deals, where he’s buying, the negotiation tactics he uses, and why now may be one of the best times to buy. He also discusses why sellers are so open to trying alternative financing options, how you can pick up real estate deals for zero dollars down, and why creative finance options offer far better returns than bank financing in 2022, 2023, and beyond!
00:00 Intro
01:44 From Contractor to Creative Financing
03:32 Network = Net Worth
05:19 Creative Financing Explained
12:45 Subject To vs. Seller Financing
16:14 Negotiating with Sellers
19:57 Finding and Structuring Deals
32:47 Does Subject To Work in Today's Market?
37:17 The Docs You'll Need
39:06 Connect with Pace!
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Join the Real Estate Rookie Facebook Group:
/ realestaterookie
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Hear Pace’s Interview on the “BiggerPockets Real Estate Podcast”:
www.biggerpockets.com/blog/bi...
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Why Investors Should Add Subject To to Their Arsenals:
www.biggerpockets.com/blog/20...
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The Essential Elements of the Creative Financing Toolbox:
www.biggerpockets.com/blog/cr...
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Tools Pace Mentioned in This Episode:
LandWatch: www.landwatch.com/
ListSource: www.listsource.com/
PropStream: www.propstream.com/bp
Weststar Loan Servicing: www.westloan.com/servicing
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Connect with Pace on Instagram:
Instagram: @pacemorby or / pacemorby
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Connect with Ashley and Tony on BiggerPockets:
Ashley: www.biggerpockets.com/users/e...
Tony: www.biggerpockets.com/users/t...
Episode 236
Show notes at: www.biggerpockets.com/blog/ro...
#biggerpockets #realestaterookie #rookie236

[@melipretzel4639]

It sounds simple but you’ve got to find a deal that has a person willing to this or deed a property back and redo paperwork to lease-option deal

[@jgwilliams67]

BINGO!

[@stevendnguyen]

I love creative financing. It is how you get low or no money down deals without partners. I bought my mobile home park with seller financing. It helped me scale to 90 units without partners. I just recently started sharing my journey.

[@Wendyybabbyy]

Do you recommend a book to learn more about this?

[@venusandathena]

Where do we find your content

[@tracylieu3211]

I want to learn too if you can share your info

[@kidvirxzy170]

Wayyyyyy to go.

[@user-ch1zs4hm2i]

You bought the whole park or just a mobile home

[@donaldgaff2271]

I wasnt financial free until my 40’s and I’m still in my 40’s, bought my second house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing is a grand choice I made. Great video! Thanks for sharing! Very inspiring! I love this

[@Alexedmartin.]

Nice one Donald.Any investment tip?. I would love to know how you made it this far

[@donaldgaff2271]

@@Alexedmartin.

[@Alexedmartin.]

@@donaldgaff2271 I value your recommendations. It's challenging to locate a trustworthy person. I could really use your investment advisor after seeing how much money you've made through investing. If you don't mind revealing her information, that is.

[@donaldgaff2271]

@@Alexedmartin. By looking for her name online, you can quickly uncover her information. She recently appeared on CNN and she is really simple to deal with no matter where you're located

[@emeldcentor1474]

@@donaldgaff2271 I have had the intentions of starting investing. But I always thought it was late and I think I need to stop procrastinating. I will definitely 🔍 Regina Louise Collaro and see what she can advise .Thanks a lot . This was of so much help to me .

[@ethanbolinger1220]

You gotta have Pace back to call foreclosures live! I'm living for this content!! 🙌

[@bexaidacandelaria]

Your the absolute awesomeness of mentorship lady !!!! I just recommended you out ……. Your really a great advisor …….. and you look out for your viewers ! ……. A big hugs. Prayers for your continued successes and one grateful thank you from a se for getting back on their after long illnesses and much back tracking and clearing my financial self 😊

[@mingo8335]

Subto Student here, you’re the bomb Pace. Proud to be in your family!

[@kimthomas6527]

This episode is 🔥🔥🔥! Wow, this guy is phenomenal! Thanks for sharing.

[@tonymontana7837]

Im buying every program this guy offers lol great stuff thanks so much definitely liked and subbed cant wait for your next episode! 🙏🏾😁

[@crashmantan]

This man is a wealth of knowledge

[@roylloyd5898]

Great show very informative, easy to understand, where even a novice can understand!

[@lorenazaragoza6411]

He showed us no excuses and achieve success. His dad had a full time job plus a side hustle and still had 12 kids, the energy 😂

[@FinalFlash2110]

It's also a story and housing was much much much cheaper then.

[@selinabanda8789]

Yes, he did

[@khoanguyenreptiles5937]

He is very smart, bring him back more information creative financing. Thank you so much

[@zammy7703]

PLEASE 🙏🏾 🙏🏾 🙏🏾 BRING PACE BACK. THIS WAS AWESOME 👌🏾

[@renatabezerra1502]

Please bring him back! I have learned so so much, thank you!!

[@SamalYessetovaS5]

Wow Pace is a genius!!! Thank you guys for so much value!!! 🔥👍👏

[@johnneedle8119]

Ok this guy has done this for years I haven't so how do I start tomorrow from scratch I'm not overly good at talking to people. I'm 46 stuck in a dead end state of Vermont. They always say it's so easy and I'm trying to do research and learn but it still is escaping me.

[@claytonpalmer2012]

... this is the most useful youtube video ever.

[@akealh]

Have pace come back! Great Episode!

[@marcorutzianni1587]

So.. When is it happening,nxt week? Great episode btw

[@Oneheart44]

Wow...Really Real Insight

[@MissCocoDiva]

My jaw is dropping...!! I could listen to him speak for hours...!! Such great info

[@TJ-th9hw]

Please bring Pace back. He’s such a breath of knowledge. Thanks!

[@really5453]

So awesome thank you!!

[@THEREALESTATEHUSTLER]

I would love to see it live💯💯💪🏿💪🏿💪🏿❤️❤️❤️❤️

[@ElSlickVic]

Subscribed. Good content

[@natusfreedom472]

Learn a lot abou creative financing , thank you pace and Tony Ashley for asking questions. That made it easy to understand. Get pace back on and do a live deal

[@williammiller4089]

Where can I find the google docs with the list of title companies or attorneys for each state

[@helenbekele4557]

Oh my God amazing, no words

[@assuranceproperties]

I listened to this on the podcast first, then it was recommended on KZbin. Awesome stuff, I’m a huge fan

[@nhiakhang2622]

Bring Pace back. He is a freaking boss!!!

[@stanlyhernandez]

Let’s bring him back!

[@mikeg329]

In his example with Mario for the sale of $3million 50 year note at 4%. Is that also incorporating principle? And what happens if pace decides to sell the property any time prior to the note expiring. Does he then just balloon pay the remaining balance to Mario?

[@ACCollins-hu1nz]

Hello what and where are the bonus extras when you pre order the book I’m not sure on how to get them my book came in yesterday thanks

[@antoniostephano]

At 23:30 love the offer to buy groceries purchased by credit card analogy. The analogy might even be stronger if someone first offered to pay $150 cash for $200 groceries which of refused is followed ny am offer to make the credit card payments. Boom. Subto grocery negotiation.

[@jjsthegambler]

I am confused on this because with his offer i would be paying more

[@BDove281]

Bring pace back!! ✌🏻✌🏻

[@aliciamarana]

Loved it!

[@gregorygregory6347]

Great episode! I’m looking but haven’t found the list of 5 title companies or attorneys in every state that do creative financing deals. Please help.

[@fcolon1976]

A LOT of people aren't willing to do creative financing. It will be very hard to find them

[@natoreezelai4756]

So helpful!

[@nikeacosta2631]

The google list ??

[@bbcapital7953]

Pleaseeeee have him back like tommorow!!!!

[@troyweyerstrass7312]

Tony you said it best! When you get started it’s very lonely! I have found some people that are helping me but inside I feel I’m letting them down because I’m not going fast enough. You two put out my favorite podcast/live cast. I love Mindy and Scott as well as David and Rob, but Rookie gets right to the heart. Thank you! This always inspires me! And after I finished listening 😂… this was an amazing episode!!

[@dandelice4370]

If there's an agent on the deal, who pays that commission? And we have to assume the Title Co gets paid for that transaction, but is that considered title insurance? Seems like there would be some money to complete the deal...what are the typical costs to get the deal done?

[@marvinn305]

Please bring him back!

[@bhatt8914]

This is gold

[@fruitloops68]

Where is the link to the title companies Pace promised at the 38.48 mark?

[@tazeev]

Wow, again so much great information. Thank you for bringing it to us.

[@5150BODE]

I want to learn all about this stuff. I have a house that I’m soon going to rent out. I would love to learn to buy property’s like this and rent them out. I am so glad I stumbled across this channel.

[@nicolasbowers9028]

There is one major flaw with Pace. He’s so damn smart and quick you have to listen twice. (At least me) so excited to have found him, the perfect strategy with the model I use.

[@startupvaservices]

Right! I need to repeat it multiple times😅

[@ralphaelthomas246]

Agree

[@bbcapital7953]

im watching this again like 10x times lol

[@svtaile1]

That’s because it is a lot of new information for you but keep listening, don’t give up, and soon everything will come together and you won’t need to listen to it much because you’ll fully understand.

[@rickwarren8161]

Pace talks way fast and many words are together instead of clearly articulated. On settings I slow the speed down, plus use close captioning (close captioning doesn't get many of his words otherwise due to lack of articulation). Makes all the difference. (When he talks to potential hardship clients, he is much slower and articulate. . . I slow the speed down to 0.75 even so.)

[@user-ch1zs4hm2i]

How do we take over payments if there is no one that verifying our income source? Like can a college student do this seller financing

[@ShayeC3]

Where is the title company google sheet????

[@smoorer9136]

Where can I find the title company information?

[@TheAjbfire]

Good info

[@shareehurts7756]

Bring Pace back!! What great lessons shared in this episode. I need to listen again to get it all down. 🔥🔥

[@gonoenriquez26.2]

Pace its like a wild bull, he finds the way out easily 😄. Love his energy.

[@bernierose1114]

Can this be done I n Canada.?

[@breatheinbreatheout8372]

What happened to Pace's 5 title attorney list in your drop-down section.. you didn't give it to us

[@chulchue2619]

There are some missing pieces of information. What was the loan evaluation ratio when you add up the underlying debt plus the private money loan of $55,000? The private money lender would not loan the $55,000 unless there was an equity cushion after his money.

[@Smacloe]

Thanks for this 🙏🏻

[@takeshiamartin3350]

Game changer

[@projectqueen610]

We've survived on creative finance and unlisted rental.

[@sortahealthygamers]

wow. crazy good info!🐒 does any one see the list in the description, for lawyers, etc in each state

[@user-ch1zs4hm2i]

I tried this and seller wanted the cash right away because they wanted to buy something quickly with the funds. Any tips

[@Desmondavid]

Someone help me understand how the debt-to-income left the sellers name without transferring to someone else though payments are still required to fulfill the mortgage. Refer to part: 31:20-32:50

[@chulchue2619]

I am a first timer to pace’s content. is his primary strategy “subject to”purchases with multiple exits anyone?

[@dhowto3005]

Thank you Mr. Pace Morby!

[@antoniostephano]

Is the Due on Sale clause ever called because the lender doesn't want the new owner to have the bemefit of the below market (i.e. low) interest rate at a time when msrket interest rates are much higher - as they are in the current market?

[@traceystarling1930]

I would love to take this course

[@-mrbright]

I don't know about selling the car with payments privately, that is incredibly risky, not to mention if a bank does not trust a person with a loan then you should not either.

[@tonymontana7837]

Do you typically make the first payment or the first few payments or do you start payments at a future date to give you time to get a tenant and start cashflowing?

[@Coachpbeck]

Any update on the list he said toward the end? I checked with the show notes online and didn’t see it. Thanks

[@jenniferfinegan2362]

He's not going to.. u need to do the research

[@debbiebrumfield1007]

I didn't see it either.

[@debbiebrumfield1007]

@@jenniferfinegan2362 Pace said he had it in Google Docs and The interviewers said they were going to put the link to it in the show notes. That is what everyone is referring to.

[@funnystories77]

In seller finance, if the buyer fails to make payments and the buyer holds the deed, how does the seller get the deed back? It seems like the seller would incur significant legal expenses. If instead the seller holds the deed, they can foreclose easily if the buyer fails to pay.

[@utubedude2842]

I’m also wondering how that works.

[@romi929]

He explains in another video how the deed is held by a 3rd person . Or something like that . He does have an answer for everything. Just got to find the right video 😊

[@funnystories77]

@@romi929 You did not read what I wrote which is that if the buyer or a third party holds the deed; and the buyer fails to pay, then the Seller incurs significant legal expenses to get their property back. Compare that to the Seller holds the deed and the buyer fails to pay, in terms of legal expenses

[@goglobalgirlent]

why would a real estate agent let you take over payments on a house they spent money trying to sell? Do you pay the realtor a 2.5% commission for connecting you to the buyer?

[@justvybes8496]

Everyone on that set is confused except Pace😅. I’ve been trying to figure this out. He may be a middle child so scattered. I think he said something in the end ❤

[@luiscort4239]

call him back!

[@BLAKRAINBOW]

I’m looking for the link to the 5 creative financing attorneys for each state… 👀

[@traveldrivers1315]

Can we get that document with title companies that Pace mentioned? I'd love to have that... thanks!

[@SwaptakDas]

I second this.

[@frankievalentine6112]

That example of the San Angelo deal sounds shady AF. No appraisal and you're gonna pay 6m?

[@chulchue2619]

My uneducated thought is that the subject to deals would work better on homes with minimal or even no equity; low interest rates; and the owners stuck with the payments; therefore, you as the subject to buyer is able to only pay a minimal amount since there’s minimal or no equity and then your strategy would be a lease option with maybe a 15% premium on the monthly payments plus lease option payment. If the lease option or default, then you just do it all over again and collect another lease option fee of five to $7000?

[@Blazemorrow]

Can you post the list of Attorneys for each state, familiar with creative financing, that Pace mentioned?

[@Coachpbeck]

I second this 👍

[@luxeshort5270]

I third this

[@moneyfreak161]

Yea i dont see the list of attorneys he mentioned

[@jenniferfinegan2362]

Research. He can't hand everything to you.

[@debbiebrumfield1007]

@@jenniferfinegan2362 Pace said he had it in Google Docs and The interviewers said they were going to put the link to it in the show notes. That is what everyone is referring to.

[@mercedesmansionsuvlife3974]

Dope!

[@coryda]

Great show, where is the list of title companies/attorneys for all 50 states?

[@Coachpbeck]

Agreed

[@tylercarder581]

Where do I find this guy

[@susannnico]

The greater the automated income you can build, the freer you will become. Taking the first step is the hardest, but 5 houses later living off automated income since July 6, 2016. You’ve got to start taking steps to achieve your goal.

[@lailaalfaddil7389]

*ROCH DUNGCA-SCHREIBER* is the best in this space, I'm happy to come across these recommendations. I have worked with her and I am impressed with the thoroughness and professionalism of the investment diligence packages she provides.

[@juliatran6838]

For seller finance and subject to deal, I am assuming the title will change to the new owner, but who pays for the property tax? Does the property tax get re-assessed to new sale price? Who get the tax write off for the mortgage interest payment?

[@ivanjmartinezt]

Who ever is on the deed.

[@paigeb5625]

When is he coming back?

[@harini7271]

What about missed foreclosure payments ? And what about inspections?

[@cassandrabernabel199]

Do you need to have a real estate license for these kinds of deals?

[@debbiebrumfield1007]

no

[@NeilCowancowannetwork]

If the seller has equity you can’t do subject too without cashing them out on the equity, correct?

[@romi929]

Exactly! The more equity they have the more you got to pay that too .

[@bbcapital7953]

We need more content from pace!

[@Mactrizel]

Ok to prove this someone starting out has 5k or 10k what should they invest in and how

[@jjsupremeorta15]

The Morby Method hybrid is the best. No money in the deal.

[@theofficialgaro]

For the 3M deal without appraisal, suvey or inspection, who is in the deed? How do you close these deals, lawyer?

[@romi929]

I suppose he assumed all the risks . None of this is required is only required if you get a loan from a lander .

[@flippingduuuval8876]

Great content I have 20 investment properties myself no bank or credit all creative finance!

[@ElizabethGalarza1]

Congratulations, would you share how to transfer insurance? Do you keep the seller on the policy?

[@flippingduuuval8876]

Typically when doing owner finance deals there’s no mortgage on the property on the sellers side so if we agree to set up a escrow account at closing we agree I the buyer pays the mortgage plus taxes and insurance monthly or just make the mortgage payment directly to the seller and you pay taxes and insurance separately Sometimes the sellers don’t have insurance especially if the property is in very rough shape

[@lashonnayoung8865]

Teach me omg😢

[@JDRyan-xv9il]

Weststar loan servicing

[@tanzanite1768]

Love Pace, i have heard this before but he made it so easy to understand and now I can have the confidence to do this. I am going to try it - I'm newbie Can he please come back - please please... Let's do this - I am in. Thanks

[@LondonCarnaval]

Unfortunately that system won't work in uk nor Ireland or Europe or anywhere else outside USA. There is demand for houses and flats so the sellers are not entertaining opportunists looking for weakest links. I don't wish to live in USA but I would love to have same opportunities here in Europe and UK. ✌❤🍀

[@xejelah]

But, are they getting their asking price?

[@cheribarker1870]

How

[@motivationallydriven]

PART 2 of buying a property live?

[@nickhaihoward429]

Looking to start doing some real estate but don't really know where to start. Could you refer me to a video that best explains what route that works best?

[@lorigribben427]

what will happen if the banks crash n close? (silicon valley)