All Forum Posts by: Luis Barraza

Quote from @Chris Seveney:

@Mike Hern

There is a time and place for LLc but when i see people setting them up when they own nothing and will have one rental that is financed in their name and they self manage and have $20k equity in a property they are throwing any cash flow down the drain with the costs associated with a LLC

I go by the rule of thumb / if you have enough money to fund a LLC to buy a property, then you can start a LLC (note the caveat this is for single family rentals)

When I see people transfer it to a LLC when it was in their name they are not reducing any liability due to a non arms length transaction and they are still tied to the property (they are paying the loan) oh and they just lost any title insurance they had…. A lot of bad advice comes away from people which is take what you read and run it by your attorney to understand your risk.

I agree, I have the same rule of thumb. if you own 1 rental you probably shouldn't spend your on money on LLC for protection. If your going to use the LLC to conduct business to do JV , partner deals, or lend money etc. that is a different story.

Quote from @Nate Marshall:

Quote from @Luis Barraza:

Pace built a strong, honest, most helpful community in the creative finance space. I don't want to speak for Pace or put words in his mouth, he wants his members to be go givers and help other members that join. From the first day you start everyone from Pace to his Leaders and fellow members help you along the way. He encourages collaboration over competition. Instead of everyone trying to compete with each other to get a deal done. He designed the community in a way that members want to help you or partner with you to get your first deal.

 So this is why he rug pulled his "leaders". No one on that level is a leader. most are basement dwelling porn hub addicted incels who are addicted to the fake gurus with fake lambos and G5's. 

Pace may have done some honest things but only to lay the groundwork for his ponzi scheme. 

 Whoa, what's up with the hate or animosity? Can you provide a little more context? What leaders are you referring too? Were you a leader? That is news to me, I haven't heard any leader getting the rug pulled.

Quote from @Chris Seveney:

@Luis Barraza

So for setting up the LLc did it include providing you with an operating agreement and EIN?

Or was it just to complete the online form in the state?

That is correct they provide EIN, Operating Agreement, Aritcles of Organization, 

Quote from @Robins Dorvil:

@Aaron Lietz, I asked those same questions when I was doing research to learn wholesale. I was a traditional buy and hold landlord that was relying on the MLS and wholesalers for my deals. I asked myself, Why don't I learn how to get these properties myself. So I did really hard research and Pace Morby's Subto program made more sense to me with my goal to build a huge portfolio. I've been in his course for 6 months now and all I can say is WOW. It's more than just Subject to and Wholesale. I've learned about advanced tax strategies, Anonymity business sets ups, Sales training, several creative strategies and on going daily accountability zooms. I'll be 100% honest, I'm feel embarrassed that I paid so low for a lifetime mentorship that's continuously benefits me to this day. However, it's just like anything else, It's what you make of it. I come from a bodybuilding background. I researched how to transform my body for 10 years online going in circles. I hired a coach for the first time and implemented every step to his program and What I wasn't able to do in 10 years I did in 7 months. So you can go in these programs and thrive or you can go in, have a bad experience and down talk. I've seen that with everything.

I followed, researched and watched Pace for 3 years before joining SubTo. At first I must say I was skeptical of Subto. I always remember seeing those infomericals talking about buy a house with no money down. yada yada. AFter the first week in subto you will be overwhelmed with the amount of information you have at your finger tips. I think the sales training alone is well worth the price. From wholesaling, land deals, commercial deals, tax prep, legal subto matter, mobile home park acquistion, LLC creation, how to purchase businesses creatively as well.The wealth of knowledge you receive is worth way more. Pace just keeps on adding more stuff he recently added how to Subto or creative finance vehicles, RV's, trailers.Also the amount of contracts that are drawn up for different stated by attorneys. As others have said yes you find and google most of the information. Its how you look at the situation, how valuable is your time to you? Would you rather spend hours looking for the information or have the information/resources available to ask and experienced Subto Leader or member whenever you need.

You can purchase BP pro, mentorships, courses, books, videos, etc. but if you don't take action what good does that do you. Most newbies want there hand held through the whole process. Subto provides that for you but if your afraid to take next the next step then your just wasting your money.

Pace is the gift that keeps on giving!!!! Not to mention if Pace sees your putting in work you can be invited to a Mastermind meetup. Either Pace's house, camping trip, He will even crash local Subto meetups. Subto is not a community it's family. Go join and if you don't like after week ask for you money back. You will be amazed on the amount of information/knowledge you get.

The quick and low.

Im not a Gator but I am a Subto student. Gators lend EMD money through partnering up with the wholesaler or buyer. Sometimes the Gator gets a percentage of the deal or they charge a flat fee depending on the amount and length of time borrowing. Everything is drawn up on the Joint Venture contract that are attorney approved contracts that are updated on a yearly basis similar to the contracts we get as pro BP members.

I have created my LLC's using Prime corporate services(PCS). They were great LLC's were create with in a couple of weeks. I did run into the naming issue with 1 of my LLC's but PCS handled everything quickly. Like @Christaye Foster mention PCS does offer other services like PAYDEX which is building up your LLC credit or Tax services. I paid $700 for 2 LLC's to 1 in California and 1 in Wyoming. Depending on what state you form your LLC will depend what your cost will. They do try to upsell you on the tax service and PAYDEX. you can decline your not pressured to use them for those services if you don't want to.

Pace doesn't force anyone to use PCS. He recommends PCS because they already familiar with Gator and Subto. You use anyone in your local state if you want.

Quote from @Matt Huber:

Hi all,

I live in Sacramento and own a couple of rentals out of state. Lately I've been considering getting back into the local market, possibly by seeking out seller financing and SubTo deals. I've read Wealth Without Cash and listened to every BP podcast with Pace that I could find. And have consumed a ton of SubTo material on YouTube from Pace and others. Yet I feel like there are some operational and legal "nuts and bolts" that I am missing. 

I know.... all I need to know is the "next step", not "all of the steps". Yet it seems foolish to make a significant investment in time (and maybe money) ferreting out leads before filling in these blanks.

So... I'd like to connect with somebody in NorCal who has actually closed a SubTo deal. Maybe have coffee, talk a little real estate. If it seems like a good fit, I might suggest working together on a few of my leads.

Thank you in advance for your time.

Hi Matt,

Its kind of tough to answer the question because with subto every situation may be unique. Yes, the core of subto will be the same but depending if the situation is seller finance, pre-foreclosure, foreclosure, no equity, or low equity has there own way. I am about to close on my first creative deal. Quick explanation of the deal I have the works. Person is going through a divorce they have substantial equity but still have a mortgage in place. We are planning to subto the existing mortgage @ 2.75 %. Pay each 30k. Then they are going to seller finance the rest of the equity at 0% with interest lump sum already added baked in. Entry is going to be a total of 75k including paying myself a small assignment fee and closing costs. PM me or call me Im in your group. We can talk specifics. This deal is in Tracy, CA.

Pace built a strong, honest, most helpful community in the creative finance space. I don't want to speak for Pace or put words in his mouth, he wants his members to be go givers and help other members that join. From the first day you start everyone from Pace to his Leaders and fellow members help you along the way. He encourages collaboration over competition. Instead of everyone trying to compete with each other to get a deal done. He designed the community in a way that members want to help you or partner with you to get your first deal.

Quote from @Account Closed:

Quote from @Scott Sloan:

Quote from @Account Closed:

Quote from @Hamlet J.:

@Mike Hern

@Patty C.

Learning is important, but taking actions is more important

And taking action with "incomplete" information in Creative Finance is disastrous. Does his mentorship cover the following?

Okay, you've just taken over a loan Subject To, the seller won't move out. What are you going to do?

You start an eviction to get them out and learn that their sister is a real estate agent who claims you have ripped them off.
What are you going to do?

There is a lot of equity in the property and the real estate sister gets an attorney involved and you are charged with equity skimming. What are you going to do?

In the process you learn that the seller is under her sisters care because of mental issues. What are you going to do?

You got into this with no money down and don't have the money to hire an attorney to fight the "false" allegations. What are you going to do?

You use someone else's money and the deal falls apart. How do you pay them back before they sue you? What are you going to do?

The seller is frantic and calls their lender to tell them you have stolen their house. The lender calls the note due. What are you going to do?

You've read all of this and either don't understand it or don't care or have been falsely told "this never happens" what are you going to do?

You fall gently into the cliff. xiǎoxīn shuāi dǎo 小心摔倒

Couldn't you just get some hard money to pay off the lender and get a new loan? Then you could just sell it and let someone else evict, or just evict the tenant yourself. You still have legal title to the property--the deed is in your name. If you're worried about a lawsuit, someone can always file a frivolous suit, so you accept that risk by conducting any business. 

The other thing to consider is if you employ creative strategies a lot, you're also playing a numbers game. As I understand it, this hypothetical would be extremely rare. So even if you encountered this issue 1/500 deals, the risk-reward would be acceptable. Of course you should understand the potential consequences of your actions, but if you make decisions based on  avoiding the unlikely scenarios, progress is a lot more difficult. It's a risk-reward continuum.   

All very well and good until you are given a court date to appear.
and Hard Money Lenders don't lend against a property that has a lis pendens against it. By the way, I didn't say don't do Creative Finance.

Isn't it just better to know what the risks are, and to have ACTUAL solutions? 
I've sued and been sued many times over the years over those kinds of issues. One case went to the US Appeals Court. (I won at each level, but that's beside the point.) The idea is to invest profitably, not to spend all your time tied up in legal cases. That is what I teach. 

 Thank you for the advice, that is good to know. Seems like you have been through some tough situations. Did you say you teach? do you have your own course or mentorship? i would be interested in learning more about what you teach. I like to keep learning and learning from different sources provides different perspectives and points of view.

 Pace does go through the entire process. He has a course on each part Subto  course which includes a legal course. He shows you how to avoid traps, red flags of potential issues. The sales training alone is well worth the price of tuition. I have seen some other sales training charge double or triple what Subto charges. 

Quote from @Luis Barraza:

Yesterday was my first day with my new SubTo family. So far getting far more than I expected. Everyone in the SubTo community is helpful and nice just like it is here in Biggerpockets. Pace has created a great community that are all go givers. Pace also provides so many resources it can get overwhelming.  My goal is to get my first deal in the first 30 days.  With all the help you receive when you join, I should be able to achieve my goal.  My long term goal is to use creative financing to scale up my rental portfolio. I will be posting updates as I go through the course or as I close deals. 

A month into the mentorship, unfortunately I did not close on my first deal. I have definitely been taking actions and calling preforclosures and agents with low equity. I am currently looking to close my first deal in the next 2 weeks. I am working on closing a couple(husband is my friend) going through a divorce.I will keep you posted on my first deal

I have been blown away from the amount of help you get when you join. Other members that are more experienced are always willing to help. You can reach out to any member that is an expert on a particular part of the subto / creative finance process.  You also get to practice on what ever your niche (preforeclosures, foreclosures, agent outreach, door knocking, cold calling.) is on daily zoom calls. 

Quote from @Account Closed:

Quote from @Leslie Richardson:

I listen to Pace and he seems to really be sharp on Subject To (creative financing.) However I need to know the best way to get contracts written into templets were I can just plug the numbers into the deals I propose to sellers? 

Any suggestions, or do I just have my agent do this for me? Working in different markets just need to get some feedback. 

Doesn't he cover that and provide that in his mentorship and discuss the pit falls like

Using Subject To, to Get "Free" Properties

https://www.biggerpockets.com/forums/311/topics/1060320-using-subject-to-to-get-free-properties-a-quick-guideline

When you join SubTo Pace provides all the agreements (contracts) JV, LOI, etc. the amazing part he keeps adding new updated contracts. You can pay to have real estate attorney draw up your contracts  some attorneys charge per contract or per hour to draw them up