All Forum Posts by: James Hamling

Why is it a go-to of the Sub-To-Kool-aid-Brigade to (a) ask a question (b) argue the answers on feelings vs facts (c) tell people who don't agree or have undeniable counter-facts to not post unless the post will be in agreeance ???? 

That's not how this or BP works. 

I asked a very simple, and very legitimate question of why not do a purchase with mortgage assumption. 

You replied with non-sense. That it's in a foreclosure status and blah-blah-blah. 

Truth and fact's are one can very easily get a foreclosure process PAUSED to allow a transaction to go through. I know because I have done this many times. It's not hard, or rare or unique, it's normal. 

You use pie in the sky perfect case scenarios for revenue production. For transaction forecast, for this that n the other. 

Those are the exact "deals" and people we have seen time and time again have everything blow-up in there face. 

Your mentioning to use wildly high levels of leverage, that blows-up in peoples faces all the time. 

So your asking us Miles if it's a "good deal" to go tap dancing in a mine-field while juggling hand-grenades....... 

Look, anyone who would even entertain such a venture has already decided there gonna do it anyways so why are you wasting everyone's time even asking? 

I get it, you wholesale (sell) these deals and want to drum up interest and thought this was best approach. 

It's not. 

Just keep things real. 

SubTo is a bit shady a thing, it is, that's just a fact, so suck it up that others call it out and state there dislike of it for that fact. Don't try the garbage of saying how safe and secure SubTo is because it's NOT, that's just reality. 

Do some get away with it, even "many", sure but it changes nothing of the fact. Due On Sales is an ax hovering over the neck at all times and all the other negative potentials that circle around it. These things are real, they can and do happen. 

Is there ways to do SubTo "more right" and "more wrong", heck yeah. But there is no way to do it 100% safe and secure, that's just a fact. 

Hence why one should first explore other options that ARE free of such risks, like a purchase with mortgage assumption. Or a Contract For Deed. 

Those who do not have the capital reserves IN HAND to readily clear that mortgage interest, should NOT ever do a SubTo - FULL STOP. 

No, you CAN'T reply on ability to finance out. What if property value drops 20% from what you thought it was? Or worse. Yeah, that's a very real risk. 

Especially for fact most being done are being purchase ABOVE market value, because if under market value that seller could have just sold at market in a normalized way, cleared the foreclosure and took the overage to the bank to pay for next place. I have NEVER seen anyone give up the $20k, $50k, $100k+ net+ they could get at regular sale to instead SubTo it...... Not 1 ever. 

So the risk of being underwater and over-leveraged is generally the standing from start. That's not a place that lends opportunity to finance out. 

Now in Commercial, SubTo is a whole different world and rather normal actually.

But in Residential..... It's far from the magic-wand all too many want to propagandize it as. 

My opinion, as a person who does both corporate and insurance MTR's, the juice isn't woth the squeeze. 

In theory, yes one could get $5k mnth on a $300k home, or more, I have. But, and a BIG but, your getting paid for the actualy property and then for the furnishings. 

So now your in the furnishing rental biz too. And that's how it goes. It's not like STR. You get so many requests and changes on furnishing that like I said, the juice isn't worth the squeeze.

What I do now is I lease the property and just connect the tenant with CORT, which is a furnishing rental biz. 

The rents I get, it's a fantasy to think one get's 2X market rents or something crazy like that, not how it works. Maybe 120%, maybe. 

I have done many of these and have a history and track record so I tend to get "premium" but even that isn't anything worth bragging, it's rather minimal. 

I am not sure I understand the essence of the question your asking @Eshe Harvey

My network is the people I do, have done or may do business with. 

My circle are those I'd invite out on my boat and to have lunch or a beer. 

The 2 may happen to cross at times but they are 2 very distinctively different groups. 

I have persons in my network that I've done business with 10, 15, 20 odd years who have 0 clue of where or how I live or anything of my "inner circle". 

The Inner Circle is for Me, about me the person. And I prefer to be the dumbest in the crowd. Associate and appreciate those better and brighter than you, learning and elevation is a natural result. And give freely at any/every opportunity called upon. Karma banking. 

My network is just about getting things done. 

 Why isn't he calling @Jay Hinrichs like every other smart developer? 

And as a Grandfather myself, I truly mean what I said about do it backwards. Grandma buys the home, own's the home, it's her investment property and her 100% control that she let's you earn from her. 

I'd be so jazzed if one of my Grandsons came to me to do/earn such. We'd be ecstatic to sell it to them in 2yrs after earning it for $0 profit ourselves. Actually we'd probably do it at a loss, because it's an inheritance we get to enjoy with the Grandkids. And that is SO valuable as a Grandparent. 

Your doing good putting such care and patience into it all. Don't change that. 

@Ethan Tomlinson all this jazzy talk on finance this way, finance that way, FHA this, FHA that.... Forget all that noise!

Remember when I said keep it SIMPLE. 

You want to be an Investor/Landlord. Ok, keep it SIMPLE. You will be using DSCR financing. 

Why? 

Because that is financing literally designed for landlords and Landlording. 

It will give an assist in analysis because there looking at the property, the performance of the property to secure the financing. It forces you to do and understand all that math which is paramount for long-term success. 

The "oh no but it will cost you 1% more on interest"..... No, it won't, it will cost your tenant. Because that's who's actually paying to cover all debt service isn't it, the tenant? 

Keep your priorities straight. 

1st priority is geting "in", cracking that nut of going from 0 too 1, doing it SAFELY, profitably, in a way that set's a stage for the next priority of getting from 1 too 2. 

That means this first 1 is all about SAFE, learning, cutting your teeth. The learning is worth it's weight in gold. 

The Carpenters Creed is applicable here: Slow is Steady and Steady is Fast. 

Keep it simple, small steps forward, that will add up over time to being a staircase into the clouds.

I am confused by the situation @Raquel Baranow. 

If your happy to basiclly give it away to someone ($0 money down) for the purpose to flip it (that's exactly what these buyers are doing, right)....... 

Why wouldn't you just call up decent contractors in the area, and offer it to them. That you'll give it to them, no money up front, they can do the whole reno to make it sellable in retail condition, all reno on them. 

The basis $ to you, is what these others are willing to pay. Then contractor get's all there expenses back, and what's left is split 50/50. 

Simple. 

A GC get's a "free flip", you both win. 

Vs janky deals at 3%.......

While ya-give me a bit of a chuckle Ken, I don't think that's true in this case. 

I think he is fishing for recruits. Persons he can get DM's from to then bring into the "community" and gain a commission on. Or sell his own education/mentorship to. That's how it all smells to me. 

And we all know only the best quality products and services sell themselves through roundabout guise....... Or NOT..... 

Myles, I understand if you hold a tinge of automatic defensiveness but my question in discussing was legitimately exactly that, just a question in discussing, not a hidden slight of any kind. 

And you may be surprised to find myself as a more senior person within that exact SubTo community you keep referencing, FYI. 

My question stands, as as of yet has not been legitimately answered; why not try a mortgage assumption first? 

The time is a non-issue. That statement of yours on such only makes me question your motives here and your actual experience in foreclosures. 

I have dealt with a plethora of foreclosure situations, over many many years. And in virtually every instance I was very easily and readily able to get the foreclosing entity to put a hold/freeze on everything. 

It's a simple phone call, discussing situation and that I have the property under contract. From there I have found every bank I have ever worked with, big, small, microscopic, very receptive to working together to bring a positive end. 

Because despite the tin-foil-hat-club's thoughts on it, finance entities don't want to take the property back, it's a giant pain in there azz. 

SubTo is NOT some fit-all magic wand. 

SubTo has some very legitimate MAJOR pitfalls, and risks. 

SubTo is far more complex and complicated than a purchase with mortgage assumption, by a multiplication factor. 

SubTo has it's place, there is a place for it, and that place is FAR from being the 1st go-to transaction tool. 

I notice you employ the use of the strategic "in my opinion". So I will clarify, my "opinions" above are formed & supported by the facts of multitudes of transactions, not feelings. 

If I come off a bit annoyed it's because I am. 

The now clear and obvious click-bait of this post, not being written as any legitimate question but as a quazi promotion of self or SubTo is annoying. 

The assumption of general superiority and talking down to persons is annoying.