What to Say to Sellers on the Phone | Pitching Creative Finance

In the third part of this series, Pace Morby explains creative finance LIVE over the phone with Robbie, the seller on this tricky deal. Watch as he pitches subject to and seller finance to the seller, breaking down why creative finance is the best solution for the seller, agent, and everyone else involved. Not only that, but Pace also lists off the potential drawbacks if the seller were to choose subject to/seller finance. After the call, Pace dives into the specific points he made on the call, describing that it’s quality conversations that convince sellers and agents that going the creative route is always the best option.
Creative finance dominates cash transactions. The faster sellers and agents learn this, the easier real estate transactions will become. Pace also talks about the six reasons why we buy real estate. Throughout this, Pace calculates the numbers on the seller’s deal, explaining why each reason works together. This video is excellent study material for anyone working towards building their seller rapport.
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Chapters:
0:00 - Intro
0:25 - Call With Agent
1:00 - Three-Way Call With Agent and Seller
2:37 - Explaining Creative Finance to Seller
10:58 - Asking Questions
15:05 - Biggest Issue
18:39 - Talking About the Call Afterwards
26:44 - How Would I Pay Off Equity?
30:35 - Overcoming Objections
35:32 - 6 Reasons to Buy Real Estate
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⚠️ #CreativeFinance #Investing #Wealth #RealEstateInvesting #Wholesaling #SubjectTo #HowToGetStartedInRealEstate ⚠️
🚧🚧🚧 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as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other and may be outdated or inaccurate; it is your responsibility to verify all information yourself.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 KZbin video for entertainment purposes ONLY ❎

[@Trentmack13]

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.

[@PaceMorby]

Thanks man, really appreciate you!

[@christianstill.6654]

you're gonna look back at this and realize how simple it was. genius.

[@johnPxIV]

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!

[@PaceMorby]

Thanks!

[@JDegen-jt1bw]

🎯 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

[@user-ug3us5yk5o]

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

[@naturally_danii]

Professional, empathetic, strategic, educational. Gold ✨️

[@PaceMorby]

Thank you!

[@imeldainterino7747]

Awesome video Pace! I closed my subto deal today learned from you. I am in the process of joining the Top Tier TC program ❤🎉

[@PaceMorby]

Let's go! That's awesome so happy for you.

[@Higherself321]

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.

[@oldskoolfunk71]

1:29 Thank you Pace Great call

[@PaceMorby]

Glad you enjoyed!

[@nandingpanelo]

Thanks Pace and community, learning a lot. Appreciate you

[@PaceMorby]

Glad to hear it! Thanks for being here!

[@Sborges02]

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!

[@PaceMorby]

I am the best choice!

[@mandeepsahota6550]

This is such a great call, Pace you are the "GOAT" !!!!!

[@PaceMorby]

Thanks glad you enjoyed it

[@jayroduarte9118]

This video came out at the PERFECT! time for me. Cleared up so many questions. Thank you Pace

[@neckhammockothermusthaves7476]

You and me both! :) Good luck!! :)

[@PaceMorby]

Glad you enjoyed!

[@chade8888]

Mahalo -Thank you Pace …excellent call as an example…Aloha!

[@purehenny10]

🏆 this is the greatest videos explaining how real estate is so powerful

[@PaceMorby]

Thank you glad you enjoyed it

[@MIKE.SHAPIRO]

Great work bro,learning lots from ya.Thank you🤙

[@PaceMorby]

My pleasure!

[@StejamTravels]

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!!

[@PaceMorby]

That is awesome!

[@robertmorgan5467]

Absolutely great job

[@mido9f]

Very smooth closer! bravo! 👏

[@Mike_the_negoatiator]

Very smooth lol 🔥

[@vividhaiku]

They cherry pick the most motivate people out of THOUSANDS of leads they're getting from their "students" and so it looks easy.

[@rmw090]

You’re on fire pace. That call, that deal, insane. You’re extremely on point and well spoken and know exactly what to do!

[@PaceMorby]

Thanks so much! Glad you got value out of it!

[@entrepreneur510]

What a beast! Great job Pace!

[@PaceMorby]

Appreciate it!

[@michaeltheshadowpoet9716]

pace, you are awesome, putting all the pieces together

[@PaceMorby]

I appreciate that!

[@irinaamihava890]

Genius as always!

[@yrnpatrickbang788]

Needed this thanks pace

[@PaceMorby]

Happy to help

[@aleyabellydance2]

This is gold. Thank you!

[@PaceMorby]

Glad you enjoyed it!

[@MichaelKingen]

@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

[@PaceMorby]

Exactly!

[@vasiliibaban2475]

Freakin LOVE THIS❤

[@hollywood0001]

Wow this was amazing!!!

[@MotiveNationAI]

Pace is The Best!

[@PaceMorby]

Aw shucks.

[@scottfrazier-buildingonpurpose]

This was so enlightening! Thank you

[@PaceMorby]

You are so welcome!

[@Realestate_efrenortiz]

Another Awesome video!! ❤🔥🔥

[@PaceMorby]

Thanks 🔥

[@emilypatterson2995]

Awesome man! Thanks Pace

[@PaceMorby]

Any time!

[@XCALIBURSHOES]

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.

[@jimeckert607]

Wow, this is amazing!

[@PaceMorby]

Happy you're getting value from it!

[@randylove-vt6qo]

amazing thank u

[@Lars.Lottrup]

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.

[@awstinweber2582]

Nuggets 🙌

[@arizonaluxuryliving]

Amazing… Pace is cool hand Luke on the phone ☎️

[@PaceMorby]

Wow thank you haha

[@johngleue]

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.

[@PaceMorby]

Boom. Mic drop.

[@NaoShouaFamily]

I’m gonna try remember this whole verse of pace pitching sub to here..not gold nuggets but gold BARS

[@PaceMorby]

Gold bars I like that!

[@Realestatewithbryson]

Shoutout to the agent who was willing to put their pride to the side and allow Pace to explain how things work. Not to many agent are willing to do that.

[@PaceMorby]

The few are great though!

[@lucybalyanify]

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.

[@gavinvanhouten]

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.

[@rafaeloropeza7544]

I have the same exact question

[@rafaeloropeza7544]

What if the interest rates never go under 3.75? Or it doesn't happen until after 10 years?

[@rafaeloropeza7544]

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

[@rafaeloropeza7544]

It seems to be a very good but very long term strategy

[@arielgonzalez9852]

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 ?

[@vividhaiku]

I refinance "when rates go lower" When is that exactly?

[@codytyler8447]

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.

[@The_Hand283]

I guess all the smart questions are still unanswered here in this comments ! Only flowers and roses they see:)))

[@DanielWeisberg]

what happens if when you have to refi in 3-4 years you get a higher rate? What about the debt paydown in that time, is that yours?

[@kingrae2789]

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?

[@christopherallcox3545]

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.

[@laroca2692]

@Pace you are a BEAST man. The only question I have is, how can you refinance if the loan is not in your name?

[@lovelymoe78b77]

He’s using a deed transfer

[@igor21s]

🔥🔥🔥

[@jamesgibbons8855]

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.

[@pablosaracho7448]

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?

[@loyasrentals]

Was wondering this too

[@OneLeggedTarantula]

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.

[@IMARBAN]

Super 😊 awesome 😎 Video ❤😊❤

[@PaceMorby]

Glad you liked it!

[@jamesgibbons8855]

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?

[@robscanlan]

I called your program and asked for help and your guys asks for 9k? Wow!

[@felixbaigel5275]

How would he pay the DP for the new house he wants to buy or needs to buy if you pay him his equity in 24m?

[@katastrofikRQ]

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?

[@epauloconnor]

@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.

[@theTXwolfman]

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.

[@stevegarza1643]

Is sub two mainly used to turn around and make it into a rental? Wouldn’t make sense to flip this if you still have to pay them back their equity? Is all this worth the $300 a month (net) is rent? Thanks!! Do you use equity in the home to pay them the down payment?

[@PaceMorby]

Real estate is all about the long game. It might be $300/month now, but rent will increase every few years

[@realtalkaccelerated351]

If rates do not fall below the assumed loan rate, then what? How will the seller receive the equity?

[@PaceMorby]

There are a couple other options, such as sell the property if it comes to that

[@lolfemfaillol3933]

Lose your up front investment

[@robreke]

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 don't buy houses just for the cash flow though. Depreciation and other factors are why I buy real estate too.

[@robreke]

@@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?

[@ClayThelin]

The mortgage is 1,411 and in that mortgage payment taxes and insurance are included

[@Balishyan1]

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.

[@steppaboss]

IF a seller agrees to everything on a contract,where are you taking advantage of them🤔

[@juancortes8617]

Where do you get the $ to pay commissions and closing costs? You pay out of pocket or do u use opm?

[@MedicalShorts191]

he said he uses PMP

[@alankalupa7585]

Your money, private money loan, private money partner on the deal.

[@Higherself321]

Who is this realtor? I’m doing business in the Raleigh/Durham area and would love to send her some business

[@Slingo28]

I’d like to know how much the agent got paid and how much the family ended up needing to get into the next house and where that money came from. I understand it can come from a PMP but if the PMP is waiting 5 years to get paid back it seems they would be hard to find but maybe not. Thanks

[@PaceMorby]

Stay tuned for when the next couple of videos in this series drops!

[@pongpongpiano504]

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?

[@PaceMorby]

If rates haven't gone up when you're refinancing, you could sell the house

[@Jesuslopezaaaaa]

How do you overcome the issue with the loan officer?

[@Aaron-wu9ob]

the new loan officer just needs to see evidence the old loan is being serviced by somebody else. Pace provides whatever evidence they want. Its not hard to do since Pace and his new tenant are the ones servicing the old loan that the new loan officer is asking about

[@vividhaiku]

Where is the video where you show us how to get the DTI issue fixed?

[@PaceMorby]

Check out the next video in this playlist kzbin.info/aero/PL2Y6uEs9DYr2XAt58W2KTJG__p8Fe7htL&feature=shared

[@MrKchittenden]

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.

[@PaceMorby]

He did not need it.

[@vividhaiku]

Very rare situation

[@lolfemfaillol3933]

​@vividhaiku very common situation

[@Jacksonms601]

One question though, how do you get around if an owner can't get another home with an existing loan on their credit?

[@denbleygv9238]

They state in some document that the first mortgage is being serviced by Pace's company and not by the owner who sold it. So that frees up the owners Debt to income stats.

[@dreamtoreality9892]

Basic stuff He never made an actual agreement as to when he will pay the money. So he will put it in the agreement that he will pay the money only when the interest drops to the 2.5% and most sellers will not read the whole contract in the 24 hours of getting the contract done. The buyer is backed up against the wall and just trying to get into a new home and he sees that he is getting his asking price and everything else is getting paid for.

[@PaceMorby]

Lying through your teeth with this one 🤣

[@lifeisreal11]

​​@@PaceMorbywhy do people try and make someone who is trying to help others look bad?

[@skhancanada01]

Rnt u forgetting property taxes?

[@TheWsteed]

So if the buyer in a subject-to arrangement defaults on payments, Robbie's left holding the bag and his credit becomes compromised? Seems very risky for the seller...am I missing something?

[@PaceMorby]

That's why the seller has to make sure the buyer can cash flow/continue making payments

[@HoustonHomeChannel-xj9np]

How do the sellers buy another house if they still have a mortgage on this one?

[@PaceMorby]

Check out this video and the other parts of the series: kzbin.info/www/bejne/eWaahZ6ZbbF9q7sfeature=shared

[@paulpapamarkos252]

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]

he said he won’t until the interest rates go down. so unless the rates go down then no he isn’t.

[@paulpapamarkos252]

@@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

[@paulpapamarkos252]

@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

[@Mike_the_negoatiator]

😂😂😂 that dumb and dumber sniper had me 💀 😂

[@PaceMorby]

🤣

[@brittanyspradley6773]

So what you’re saying is that you’re NOT going to pay them unless interest rates reach 2.5%… and if they don’t, then you don’t pay them? So they’re just fucked? It could be 20 or 30 years?

[@brittanyspradley6773]

They’re not over complicating anything you’re not explaining anything. If you don’t make monthly payments to him for his equity and you don’t refinance bc you said you rarely refinance so then how will they get paid?

[@PaceMorby]

There are a few options here... I could sell the house again and pay off the rest of the mortgage

[@lolfemfaillol3933]

​@@PaceMorbyThe seller is in distress. Meaning he couldn't sell.

[@ecassidymitchell]

Question, “newby here,” what if the original lender does a deed check and sees that the deed was transferred and asks the original seller to pay the loan in full. Or what if the seller goes bankrupt Is this where the contractual Documents come in handy?

[@icaangelmassage]

"Newby here" You as the buyer lose your investment! This is what Google told me.

[@steppaboss]

​@@icaangelmassageWrong Not true

[@katastrofikRQ]

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?

[@vividhaiku]

They won't

[@steppaboss]

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.

[@thatbusinesstrainer1414]

What is the answer to "what happens if you default on making payments on the loan that is still in my name?"

[@FaheemAhmed-lc5vm]

Or the other way around the seller goes foreclosure?

[@19nexx]

The seller would simply take back the property and all the has been paid to him(seller doesn’t lose here) he simply gets it back… now, pace is not setting himself up here to lose and that’s why he ll be able to serve that loan and keep everybody on safe.. my only question is, how does the seller gets the remainder of their equity of the property is Pcae is not able to refinance with a lower interest? And I’m Guessing Sell the property; that’s the only solution I see in that case ..

[@19nexx]

@@FaheemAhmed-lc5vm seller won’t go foreclosure unless Pace don’t pay and serve the existing loan on that property

[@HB-yq8gy]

That appreciation of 7% is questionable and not guaranteed.

[@JohnSmith-ez9dx]

So how you avoid pay off the bank when the bank says " If ownership of property changes loan is due".? How you can change deed and make payments ,when bank says loan is due.

[@videomax702]

The banks don’t actually care as long as the loan stays current.

[@jabs_carter84]

Look up Due on sales clause by pace. He goes over this question in specific

[@JohnSmith-ez9dx]

@@videomax702 The bank has a clause that load is due immediately if ownership changes.And since now the rates are 6%+ and ppl have 3% they care. So how do we avoid that thing is my question.

[@PaceMorby]

I have a whole playlist on this. Here's one video kzbin.info/www/bejne/iIvTfImnprqNhrM

[@Aaron-wu9ob]

@@JohnSmith-ez9dx Pace has had 6 out of 6k "due on sale" clauses called on sub-tos. .999% of the time the lender just wants their money and doesn't want to file a $12k to $30k foreclosure with the court. In the highly unlikely event that you get a really dumb bank... Pace has a story about the owner of a bank that recommended he deed it back to the seller and restructure the deal as a lease with a balloon payment to buy at the end of the term that was equivalent to whatever was left on the mortgage minus the lease payments already paid. In my opinion that's a crappy way to do it since Pace won't get the depreciation. But its acceptable I suppose as long as its not more than 1 out of every 1000. Price of doing business

[@janinafarr8569]

Im confused 😕. Why give away all the equity? Besides the cash flow what’s the benefit? $300 a month is not worth it.

[@Aaron-wu9ob]

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.

[@lolfemfaillol3933]

It will still affect dti

[@steppaboss]

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🤔

[@HughJass-sm1tl]

🎈 🎈 ❤

[@lucybalyanify]

How would you deal with a seller has no loan & 100%equity?

[@rmw090]

That would be an owner finance deal, and the seller would be the bank and you would just pay them monthly for the property on whatever payment you decide on

[@PaceMorby]

Ive done a lot of videos about that! Its seller finance.

[@loyasrentals]

Would love to know the lender .

[@PaceMorby]

Follow me and DM me the word DONE on Instagram and I'll send a PDF of my private money contacts!

[@AberrantArt]

How do you fix the DTI problem? Do you make a fake lease with the Seller (even though that might be fraud)?

[@PaceMorby]

I answer this in the next video in this series coming out later this week

[@Aaron-wu9ob]

Underwriter on the new loan/house wants to see the old loan/house payments being serviced by someone else. Pace provides it

[@AberrantArt]

@Aaron-wu9ob so if people use a servicing company, that's all that's needed and DTI is NEVER an issue?

[@LatinoWebStudio]

Would there ever be a scenario where a cash buy would be better than creative finance?

[@PaceMorby]

No, only if the seller can't open their eyes to creative finance

[@LatinoWebStudio]

@@PaceMorby got it!

[@loyasrentals]

What if rates never get lower ?

[@loyasrentals]

What if they need a bunch of their equity to afford the next house ?

[@PaceMorby]

DSCR loan or seller finance the equity to the end buyer and receive payments on it.

[@loyasrentals]

@@PaceMorby ok thank you your videos are so good ! What if holding not an end buyer ? I’m not sure I’m following ..

[@juliannehart2974]

actually had me crying laughing about children buying real estate for cash flow lmao

[@ClayThelin]

I need a video explaining how to explain to a lender how the process works so I can speak to buyers lenders about it! Can anyone help me find a video about the back end of that process?

[@PaceMorby]

The next video in this series is my conversation with the lender kzbin.info/www/bejne/eWaahZ6ZbbF9q7sfeature=shared

[@ClayThelin]

@@PaceMorby the rate at which this reply came in is actually crazy and very appreciated! Thank you! Top tier!

[@alexmlo1]

why does nobody explain HOW you get around the mortgage DTI issue on their next purchase. would you not need wait 12 months via contingent liability guidelines? And you are going to get a new loan of 340k in 2 years on that same house to payoff the seller? The property would have to appraise for about 430k for you to cashout that amount assuming no 2nd position financing... Thats also assuming you have income to qualify for a 340k loan just fyi..

[@kingrae2789]

Once the buyer is able to prove the to the lender that hs is no longer responsible for the other mortgage and its been paid by another person (doing the subto), he/she will remove the hurdle, allowing him to get the new load. He said it in the video.

[@alexmlo1]

If the loan does not fit the Fannie freddie guidelines the investors won't accept that loan. Just because you are able to prove someone else is paying the mortgage for a few months doesn't equate to a loan approval. This seems like a serious underwriter descretion situation

[@gabrielmejia2626]

where are the pmp that wanna lend 40k for $200 cash flow and 50% equity? lol holla at me!

[@crazydonkey110]

If this property can be rented out for $2200 and cash flow $300 why does the seller even need you? Can’t they just keep it and hire a property manager? Then they would be getting all the benefits instead of passing them onto you.

[@Aaron-wu9ob]

If the seller rents it out then it stays on his DTI killing his new loan won't close escrow. Not even sure he could rent an apartment if landlord runs his credit and sees the $340k tradeline.

[@theTXwolfman]

@@Aaron-wu9ob Actually, not really. If a seller decides to rent out their house, THAT does take it off your DTI, or in some cases the bank takes 80% of it off their DTI due to expected vacancy (reducing the income that offsets that debt.) BUT leasing it out doesn't put in his pocket the $20k down payment that Pace was going to pay him, AND also landlording is hard and tenants are a pain and managing maintenance and repairs. IT's really just that Robbie had already committed to his family they were getting this new house and he knows this hybrid deal will take the debt off his plate and he will eventually get the equity, and probably no other buyer would pay full price and Pace wouldn't be using a Realtor on the buy side so he saves 3% of total purchase price and gets a full price offer on his house, so he's probably making $30k MORE than he could otherwise just by being willing to wait for it, while also NOT having to wait at all to get the new house and they don't lose the new house. THAT was everything to Robbie. Seems like a lot of comments, (NOT YOU Aaron!) don't seem to be able to put themselves in the situation of the seller, and just try to understand that other people have different motivations than you do.

[@The_Hand283]

Ok you promised him 24 months to give him 120,000 equity right? Let’s assume the interests rates go higher not lower(very likely ) you cannot refinance where you gonna get the money from to pay him?

[@PaceMorby]

There are a couple options, but if it comes to that, I could always sell the property again

[@KenEwald-sr3ph]

If Robbie's mortgage payment isn't including homeowners and property tax I don't see how Pace makes money.

[@vividhaiku]

They'll sell it to one of their cult members as a wholesale and let them have the problem

[@KenEwald-sr3ph]

@@vividhaiku you Nazis are always the same.

[@sergioauvert525]

24 hours to close, how? 🥴

[@michaellaabs2899]

Title commitment is already completed and clear. This property was already previously under contract, but buyer couldn’t perform/close. Also, in a subject to transaction you are not waiting for approvals from the bank, inspections, survey, etc. that part in a typical real estate transaction takes time. So now… Paces transaction coordination team will be on all the paperwork and in communication with the closing attorney. Wire cash to close to escrow, Scheduling notary, sign paperwork and close:) The only thing that can hold the deal up would be on the closing attorney.

[@Casinowarmaster]

The biggest reason this worked is because the seller didn’t have another solution and it is their best option

[@PaceMorby]

Creative finance is usually the best option

[@BirdseyeVu]

…except that you flat out told the homeowner your goal was to pay them their equity within 24 months. If you truly believe it’s going to be more like 5-7yrs, just tell the truth.

[@DaveJohnsonMiami]

So if Interest rates don't go down below 3% for the next 10 years, the guy is fucked on his equity, and over 10 years his money is worth half with the high percent of inflation we have been going through, these last 4 years. In 7-10 years from now, his ~$140k equity will be worth probably $90k-100k in purchase power.

[@theTXwolfman]

How many other buyers would pay full price for the house? Probably offers $20 or $30k less. Robbie had to do zero in fixing up or making pretty, saves $5k or $10k. Only 1 realtor on the sell side, saves Robbie another $10k. So Robbie is getting a top of the market price getting him maybe $40k MORE than he could get any other way, and it's INSTANT. He puts it back on the market he pays $20k more and loses at least $30k on lower offers AND it could take 6 months to sell, and so he LOSES the most important thing to him, which was the new house for the family! Yes, when he gets his equity paid, it will be worth a little less, but he prevented all the other losses, not to mention the stress and headache of going back on the market for months and seeing the lower offers AND seeing their dream of the new house go up in smoke. Guys, (not you, Miami) ya gotta realize other people have different motivations than you and value different things. Pace gave the guy what HE wanted and in a way that worked for him, and if the deal had not been good enough for Pace, then Pace wouldn't have wasted his time and NO ONE would have gotten what they wanted! Too many on here think it's taking advantage of a seller when THEY and WE get what we need to make it work for both, win/win, simply because you are looking through the lens of your own self and what YOU value, which is obviously different than what others value. Taking advantage of them?!? Hmm, when you have a cancerous tumor and in pain and could die, is the doctor taking advantage of you when she gets paid for surgery? (that took many years after years of med school to hone to that level.) I mean you don't get ANY equity out of that, you just get maybe something close to back to square one, and the doctor "took advantage" that they knew that some people would have tumors and so figured out how to get paid very well to help people get well. Isn't that taking advantage of people's desperate situation?? OMG, the horror!

[@Aaron-wu9ob]

Did bro just refer to himself as Michael Jordan? I'm not sure what I heard it was so smooth with it

[@PaceMorby]

I probably did haha

[@Residentalien2637]

That's a stupid investment.. 20-30k down payment 9k towards agent commission Figure 10-15k towards the renovation 50k all in to make 8% return BEFORE he pays him every month for he's equity Add that 50k to the 340 "obligation" - your under water. Suffer from knowing the numbers.

[@PaceMorby]

Appreciation makes it worth it.

[@Residentalien2637]

@@PaceMorby what appreciation? Your at break even after 5 years according to your calculations of 475... Your all in 400k, after closing costs and commissions you have no real equity.

[@lolfemfaillol3933]

Bro factor in getting 8k from selling your course. That's the real money maker.