All Forum Posts by: Brett Goldsmith
Brett Goldsmith has started 16 posts and replied 1242 times.
Post: Trustee Sale Second Mortgage
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- Los Angeles, CA
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Post: Creative Finance Subject To Question
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This isn't a sub 2 that you are describing. What is the goal? Sounds like you are trying to purchase the property and do some sort of lease to own for them?
Post: Subject to Financing
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Quote from @Jared Prevost:
@Brett Goldsmith Really depends on your investing goals right? I'm looking for the highest possible cash-on-cash return.
Let me illustrate the power of buying a home with no equity by giving you an example of a sub to we're closing on this month.
The Situation
Seller bought the place last year with a 3.25% fixed interest rate, 30-year am, and a PITI of $1,503 a month. The seller bought the place in decent condition, but wanted to fix it up himself to build equity as he had done a few times before. However, he got a great job offer in Colorado and needs to sell. He can sell the property for about what he bought it for, but he's on a tight timeline, doesn't want to keep paying the mortgage and property expenses through a traditional sales process period (60 - 120 days), and by the time realtors get paid out, he'd have to cut a check to sell the property
How Sub To Works for the Seller
The seller has actually sold sub to before (he's even had a loan called via the due on sale clause) and thought this would be the best way for him to net money on the sale. Additionally, he doesn't mind having someone else paying down his mortgage as that can benefit his credit. Instead of cutting a check to sell and pay thousands in holding costs, he'll be able to net $18,000 at close and close in under a month without having to show the property.
How Sub To Works for the Buyer
For this deal, we had a few exit strategies. Ultimately, what we plan to do is resell the house on seller finance to an end buyer by 'wrapping' the existing loan. We'll get a downpayment of at least $20,000 so we're $0 into the deal, have a 3-4% interest premium as our cash flow, and give someone the opportunity to buy a house when they normally wouldn't qualify.
In summary, $0 into the deal and cash flow way beyond a traditional rental. If the buyer defaults we can resell the house on a wrap to someone else.
As far as the due on sale clause is concerned, the way in which we structure our purchasing entity makes it extremely difficult for the note to be called due on sale. Additionally, this is a federal loan so it's been sold off and repackaged, which makes it very unlikely that any lender would ever notice that the property has been sold
That my friend, is the power of Sub To :)
Yes, that is another way to do it. In your example the home isn't considerably upside down and there is upside that can be captured. I think the point I was trying to make is that I would not subject to a house that truly has no equity and requires capital contributions.
Post: Subject to Financing
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- Los Angeles, CA
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Quote from @Jared Prevost:
Quote from @Brett Goldsmith:
Hi Brett,
I respectfully disagree, I've found the best time for subject to for both the buyer and seller is when there is no equity in the property and the seller is looking for a way to be relieved of the mortgage obligation without having to cut a check to sell the property.
@David Caradonna Perhaps I'm reaching out a little too late here, but this sounds like a great opportunity to save the seller's credit and put a little bit of cash in their pocket. Subject to needs to be done very carefully in how you structure the deal. I'll dm you, but my partners and I specialize in these types of transactions.
Not sure if I am missing something, but I haven't found one that has made sense. I am not sure why I would want a property that is upside down as I am incurring liabilities. Not to mention I will end up spending money fixing up the property, maintaining, etc. Seems like a losing situation in most circumstances.
I would prefer to walk into a property with six figures of equity as the lions share of profit in most small projects is made in the buying. Taking a property subject to when it helps me acquire a property for less out of pocket than a traditional loan is ideal or having a loan in place that is considerably better than anything obtainable today. For example; I have acquired properties for less than a standard down payment and walked into 30 year loans with a 2% fixed interest rate and deferred balance due to a prior loan modification. This is just icing on the cake in the case you want to hold it.
Post: Help structuring a deal!
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- Los Angeles, CA
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What is this woman's goals? Primarily when I meet with distressed homeowners I go over all of their options to keep ( that's generally what they want to talk about initially) and also to sell the property. Most homeowners in foreclosure can not keep due to their financials or come to the realization in time that they need to liquidate the asset.
Have you pulled a title report? What is the total amount owed on the property? What is the property worth as-is?
I'll need more information to better guide you.
Post: Out of State Investing
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- Los Angeles, CA
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Quote from @Keivan Cross:
@Olivia Radziszewski I am open to any market that makes sense. I am from Los Angeles and a first time homebuyer. I am looking for out of state property that will produce a minimum of 10% COC return in an area of that wil appreciate. Again, I am new on this journey and will do a deal in a state that makes sense.
If you are looking for cash flow and appreciation, probably need to buy in a more coastal state. May want to look into a duplex or triplex. Many times you sacrifice appreciation for cash flow from my experience in many states. This is why it's important to buy an asset at a discount or that is being utilized below it's highest and best use. This way you walk into equity and can force appreciation.
Post: Monthly cash flow dead?
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I'd suggest looking into duplexes, triplexes, etc if you are looking for cash flow.
Post: Stopping Foreclosure on a Decedent's Property
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The challenge with these is that if there is no trust it will need to go through probate as you know. The process may be quicker is there is a will to probate. I'd really be seeing how long probate will take as it may be a shame to spend money to have it go into the probate process only to be foreclosed on. Hopefully she can get appointed executor of the estate quickly so you purchase it. I'd likely just be doing a purchase agreement for a set price and disclosing that it will be going through probate and that she agrees to sell it to you for X price once she is appointed executor.
Post: Subject to Financing
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- Los Angeles, CA
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Quote from @John McKee:
can someone give an example of a subject to deal that they have done?
Post: Hows the default market doing in these states?
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- Los Angeles, CA
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