All Forum Posts by: Bill Jones

I see you are here trying to sell yourself as an expert, IMO, you're missing a lot. I suspect you have some product, program, book, system or other stuff, you can try, but you won't get far with it here I'm afraid, not the way you're going at it.

No, no books to sell, snake oil, or other stuff, Trying to share information

Everything you have mentioned is decades old, out dated (CFDs) and your deed exchange for example, read a recent thread Deed in lieu of foreclosure and pre-arranged deed agreements" the link given is by an attorney and reputable source.

Of course it's old but, not outdated I haven't even mentioned CFD that's my next subject...As far as attorneys being reputable sources there'er infamous for deal killers because of their ignorance.

Again creative financing is financing that does not conform to the traditional approaches you seem to cherish. By its very nature is met with skepticism and criticism by folks like you who practice traditional methods...

BTW, I asked about your law degree and if you were an attorney, avoided that one, it's okay, we know you're not an attorney. In fact, someone PMed me saying where that degree was from and mentioned that it's from a mail in degree bogus school, but, whatever

No never said I was an attorney.. I have a traditional law degree from a reputable college. I decided not to become a lawyer because there's no money in it.

I've had more installment contracts and CFDs cross my desk than you're likely to ever see in another 20 years, I had the largest private contract servicing company in the Midwest. I designed creative transactions, not only with residential but in commercial and business sale transactions. Painting me as a totally in the box, conventional deal type is painting by numbers, you have no idea.

You should go back to shuffling papers

@Dion DePaoli

yes, the train analogy was a good one for this, look at the amount of hype and misinformation posted to deal with to contradict his post. Overwhelm them with BS to the point they won't know where to begin and they will go away. That's taught in guru 101.

I learned this lesson early on When you come in contact with non-believes, skeptics, ignore them...

People like you think creative financing is a bunch of nonsense..but when I can buy a house with 100% financing and resell within a few week for a profit of $60000 I never looked back it didn't mater what anyone said about creative financing "It's not legal, risky, not ethical whatever..I know without a doubt creative financing works

Bill, we have thousands of posts here that already have pointed out issues with your suggestions, it's old stuff, I'm not reposting all that for you.

I never said seller financing was dead, it's not, in commercial or in compliance with residential.

Search "unrecorded contract for deed" it's already been addressed and a very bad idea, but it is how many were done 20 and more years ago.

I'm still doing it, You can keep on screwing the seller

Figure this out Bill, a seller would sell his property on a CFD to a buyer, then I would purchase the property and the CFD, saying your seller or buyer is "protected", that's not true at all.

Your not reading what I said...go back and read

This isn't Long Beach, you're on a national stage where we have several experts in their areas of RE and finance, this site isn't a captive audience of gullible newbies and we protect our new members.

When I come in contact with oxymoron's like you two, I generally ignore them..But your ignorance is overwhelming...Keep on paying those taxes Obuma needs the money for his health plan ...You probably voted for him

Now, if you had eased into the forums with contributions and established your ideas instead of blasting in here with nonsense about how creative you were......well, that's hind sight now. Your ideas, rather these old ideas will get people in trouble today. I'm done :)

Thank God...You keep doing what your doing and I'll do the same...'ll write about contract for deed next...which, again I use all the time when necessary.

Until the next time

Bill

Perhaps for the readers you can address the more important ideas that come with this plan of not recording things:

1. Concealment = "...in any matter within the jurisdiction of any department or agency of the United States...knowingly conceals or covers up by any trick, scheme, or device a material fact" - LINK
2. Again in California its not a crime or tort not to inform the lender
3. Duty of California Licensed Broker to Disclose = Suggesting to not disclose for the purpose of concealment seems to go against California Broker Code of Conduct. The sole reason you are suggesting to not record said transfer seems to be for the purpose of concealing the sale from an interest party, the Mortgagee. Not to mention the county for re-assessment of property taxation.
4. All disclosure are made in escrow as to the ramification of Sub2's
5. How about offsetting the other potential felonies that can arise such as mail fraud, racketeering, false statements (HUD & Conventional)
6. Your out of your mind

I Purchase real estate creatively because frankly I really don't want to pay for new loan fees, points commissions, higher property taxes and all the other traditional expenses involved in buying and selling real estate.

I'm not a motivational speaker or writer. Hopefully we'll have some fun with these posts, but my bottom line is to really work with you and show you ways that will allow you to chose from and employ the best creative financing techniques for your transaction while minimizing the risks ..Covering your ***-ets and allow you to purchase real estate without formally assuming for or bank qualifying... All without credit and usually with little or no cash...

Let's put it all together

Seller signs a deed giving buyer ownership

The seller would agree to execute a grant deed (warranty deed, whatever its called in your state) in favor of the buyer

The deed is held unrecorded by the escrow management company until the loans in the seller's name have been paid or assumed.(If the seller doesn't like until paid try this. Buyer agrees to use best efforts to pay off existing loans that are in sellers name within five years of close of escrow.)

Protection for the seller

Buyer will execute a quitclaim deed back to the seller, which is held in escrow unrecorded

How to protect the buyer in the chain of title and potential future creditors of the seller.

For the buyers protection a lien of some percentage (I like to see at least 20%) of the purchase price in favor of the buyer executed by the seller will be recorded a "Sellers Performance Deed of Trust" The buyer will appear to be a juniors lender for public record purposes.

The seller is protected

For the sellers protection a reconveyance of said deed shall be executed by the buyer, which would be recorded in the event of a default upon request of the seller, which remains uncured for sixty (60) days upon written notice of default, has been mailed to the buyer

This would allow the management company to unilaterally remove buyers cloud on the title by using the pre-signed reconveyance if the default was not cured as outlined.

Happy New Year… I'd like to critique some of your comments shared above and perhaps give us some more bones to chew on

Dion DePaoil writes:

Creative finance and nutshell is sort of an oxymoron, don't you think?

No here are examples of oxymoron's

Great Depression

Jumbo shrimp

Cruel to be kind

Pain for pleasure

Clearly confused

Act naturally

Beautifully painful

Painfully beautiful

Deafening silence

Pretty ugly

Pretty fierce

Pretty cruel

Definitely maybe

Living dead

Walking dead

Only choice

Nutshell implies small, concise to the point

"You find a suitable property for let's say $100,000 the seller owes the bank $75,000 how to we purchase the property? You offer to take the property "subject to" the existing bank loan, and ask the seller to loan you some of his $25,000 equity by holding a note for $12,500 called a wrap or an AITD all inclusive trust deed."

Is this "creative"? Yes, as it is not conventional.

Does the property owner, who has already granted an interest in the real property the first mortgagee, "loan" you his equity? Not really, you are buying it, he financed you buying it. That's a loan

Bill Gulley writes

Dion, position of who's head gets chopped off first I don't see as an issue, you're right that a Sub-2 seller is financing the amount they have financed.

No they're financing their equity in a loan to the buyer.

What is suggested, isn't creative financing, piling up loans isn't creative, but dangerous, especially in a Sub-2 with an underlying mortgage.

The original question was… can you purchase real estate with Nothing Down.. This is just an example of how to purchase real estate using none of your own money

There are other aspects as to the interest acquired in a Sub-2, you are in title as a buyer and you can encumber your interest and cloud good title,

No… see how to safeguard the buyer and seller below

this requires a filing in the RE records… No see below

and is another violation under the first with the transfer of interests by a third party, you, as the buyer. It's an additional notice to the first lender giving cause to look at the due on sale. Not just a poke in one eye but both eyes!

Is there anyway to get safely around the dreaded due on sale clause acceleration clause? While protecting the buyer and sellers interests? You Bet

Here it is in a Nutshell. (This is what I use in California)

The concept is to keep the fact that the property has been transferred private.

The sales transaction remains unrecorded i.e. the deed is not recorded or the contract of sale or the financing agreement.

The transaction is maintained in the records of a settlement /escrow management company

Enough documentation is recorded to protect the seller and buyer in the chain of title without making the fact that the property was transferred public record

Existing loans, taxes, insurance are paid by the buyer into a collection account, which in turn pays all the accounts required to service the property

Recording a deed or contract is not required in most states to make a valid transfer

Not disclosing the new sale to the underlying lender is not illegal in most states

Keeping the transfer from the lender is not a crime or against the law. The act of the transfer is a breach of contract and only cause for the loan to be accelerated

Gulley again

Bill, I visited your profile. I see you are an author, I like good authors.

This site is not your average RE site, it's rather anti-guru. Authors of RE material with poor advice, often illegal advice, especially in areas of finance find that advocating such doesn't go over well. We see through hype quickly, just FYI.

I tell readers right from the beginning that they will be met with nay sayers…

"You will be met with skepticism from critics who practice traditional financing usually real estate agents, attorneys, your friends family and the like. Mostly those that have never even purchased real estate. I can hear them now. You can't do that! It’s illegal it's risky."

I also visited your profile Mr Gulley and Man you fit the mold

We love creative ideas that are ethical, prudent, legal and that can be duplicated in reality.

Not disclosing the new sale to the underlying lender is not illegal in most states

Keeping the transfer from the lender is not a crime or against the law. The act of the transfer is a breach of contract and only cause for the loan to be accelerated

I suggest you not even get into Contract For Deeds, that will just blown off this site.

I'll be discussing basic approaches for buying real estate creatively.Some good and some not so good.Later I'll discuss the pros and cons of the best creative financing methods so you can determine which to use for your particular situation

Land Contracts

Options, Leases, Options to purchase

AITD's (All inclusive trust deeds or wraps)

Seller carry back deeds of trusts/mortgages

Taking subject to the existing financing

Not recording the deed, which is dangerous if not properly protected

Recording a memorandum of agreement

Trusts:Transfer the property to the sellers trust, get the bank to approve the transfer and then have the beneficiary of the sellers trust changed to the buyer.

Just transferring title into the buyers name hoping the lender won't call the loan.

Equity share

Bill Gulley again

CFD's are rather dead as there are recent issues with circumventing foreclosure laws and rights of redemption by filing a deed in lieu of foreclosure upon default. It's an issue of a wrongful foreclosure. :)

Many Real Estate investors think that the regulation called The Dodd Frank
Act which takes effect January 10th, 2014 will eliminate Creative/seller
financing as we know it.

Is Creative/seller financing dead because of Dodd Frank? *NO*

Do you now have to be a licensed mortgage loan office to seller finance a

property?* NO* but it's a good idea to hire one in certain circumstances ...

Can you finance more than 3 properties as an investor? *YES*

Dodd Frank is meant to safeguard people's personal residence...You only need
to use it if your buyer is using it as their personal residence...If your
selling to an investor no worries...The easiest and safest way to protect
yourselfis to use a Mortgage Loan Originator in all your deals. For a
nominal fee they make sure your deals comply with the law.

As an investor you can sell i.e. finance three properties without Dodd
Frank worries... I would use an LLC for each one.

Many Real Estate investors think that the regulation called The Dodd Frank Act which takes effect January 10th, 2014 will eliminate Creative/seller financing as we know it.

Is Creative/seller financing dead because of Dodd Frank? NO

Do you now have to be a licensed mortgage loan office to seller finance a property? NO but it's a good idea...

Can you finance more than 3 properties as an investor? YES

Dodd Frank is meant to safeguard peoples personal residence...You only need to use it if your buyer is using it as their personal residence...If your selling to an investor no worries...The easiest and safest way to protect yourself it is to use a Mortgage Loan Originator in all your deals..For a nominal fee they make sure your deals comply with the law.

As an investor you can sell i.e. finance three properties without Dodd Frank worries... I would use an LLC for each one.

As a side note to about Bill Gulleys comment regarding "Subject To's" I have been buying properties "Subject To" for 30 years and I have never seen the lender accelerate the loan even when I told them I was the new owner..There are ways to protect yourself and the seller.

Merry Christmas

Bill

Thanks Paul and Darwin

Hi Bill, The post was an introduction to creative financing and is just one example. If you read the post you'd see that I said CF has no rules as long as it's legal, ethical and prudent and has risks, and of course creative use of assets is one way...Happy Holidays

Creative Financing
In a Nutshell
Part One of ?
_______________________

There are No Rules as to how you can or cannot structure your creative financing deals, other than what is legal, moral, ethical and using the guidelines found here
Creative real estate financing is not business as usual. You will be met with skepticism from critics who practice traditional financing usually real estate agents, attorneys, your friends family and the like. Mostly those that have never even purchased real estate. I can hear them now. You can't do that! It’s illegal it's risky.
Risk Taking. A while back I overheard an interview with Pulitzer prize author Jane Smiley talking about her book Horse Heaven. Jane related that our whole economy is based on a willingness to take risks. She's absolutely correct. There's risk in any business transaction. Creative financing has risk, most notably the due on sale clause, which is the core of these lessons. We will spend considerable time showing you how to beat, minimize and shift the risk of the due on clause.
Legal? There's nothing illegal in any of the methods employed here. These blogs is written for the state of California if you don’t at least have a basic understanding of the real estate principals and real estate financing applicable to your state, I suggest you go to your public library, book store, amazon.com, whatever and get a copy of the real estate principals, financing and laws that apply to your state. Although real estate laws go back to the feudal times in England and are fairly consistent there can be and are subtle and major differences from state to state.
Do I need a college education to buy real estate without cash or credit? If your able to read and understand these postings your in.

Can you still buy with No Money down? The definitive answer. Yes and No. It depends. The no money or nothing down deals are out there, they're just harder to find and have to be approached differently. (When this latest bubble bursts and it will...Creative financing will come into its own again.)
No Money Down?
Think of buying with no money down as 100% financing. In other words you're going to borrow all or most of the money needed to purchase the property.

Here's what I mean. You find a suitable property for let's say $100,000 the seller owes the bank $75,000 how to we purchase the property? You offer to take the property "subject to" the existing bank loan, and ask the seller to loan you some of his $25,000 equity by holding a note for $12,500 called a wrap or an AITD all inclusive trust deed.

Then you borrow another $12,500 from a third party who you would give a note secured by a second mortgage on the property as security for the down payment money.

Congratulations you just purchased a property for 100% financing or no money down.
I should mention here that most of you will have different reasons for needing the information found in these postings. Maybe you have good credit but no money. Or you have the money for a down payment but no credit.

Buyers verses sellers will want to use different approaches Whatever your particular need these blogs will address all of the techniques available to you to purchase and sell real estate creatively without cash credit or banks.
Use the information found here to assist you in filling the missing need in making your real estate purchase

The example used above is just one of the many ways the purchase could have been accomplished. However, by using other no money down or creative financing techniques such as a land contract, a lease option or equity sharing may be advantageous for you as a buyer or seller. We will explore all of these techniques in detail and more in subsequent postings.

But no mater what technique you're going to use you want to make sure it's a win win for the both of you, however the one with the better knowledge of creative financing will ultimately come out on top. So it's very important that you have an understanding of your creative financing options so that you as the buyer or seller and not the other party can use the correct or best way to structure the deal.
My lessons favors the buyer and will first point out their best approach and secondly the sellers approach. You as buyer or seller will have to determine the technique that works best for your situation. With that said let's get to it....Next time
If you need any help structuring any type of deal give me a shout
Bill

Thanks Brandon, Much appreciated I'm starting posts today "Creative Financing in a Nutshell"

Hi Cuong and Mehran, Thank you yes I will start posting ASAP Happy Holidays