All Forum Posts by: Myles Berrio

@Caleb Christopher exactly!! I never said I was closing on this deal but merely a deal I was looking at and thought it would be a great discussion on why someone would or wouldn't close on to help reveal all kinds of different perspectives. I'm sure there is a ton of value here in the Bigger Pockets forum but definitely seems like unfortunately growth in numbers has been the baseline rather than upholding a positive and helpful culture. Thanks Bonnie! I make sure that all of my underwriting takes in account the lowest level of income being long-term rentals and even worst case if it had to sit vacant for 3-6 months, but love that you shared such great insight! This was a post to encourage positive discussion not assumptions and ego. You rock! 

@James Hamling I offer my phone number because talking on the phone often avoids these kinds of misunderstandings. I'm not click baiting or fishing for anything. I knew a post like this would open up dialogue of great questions and answers and discussion for others to learn from. 

it unfortunately has turned into a couple of guys who feel they are "right" rather than offering your opinion on whether you would buy that deal or not. I never asked to get into why you would use another strategy. 

sorry you feel the way you do but if you can't have cordial dialogue about real estate questions and discussion, maybe just don't leave comments. 

@Myles Berrio@Patrick Roberts

@James Hamling Hey James, thanks for posting but you may not agree with me here and that's okay, but as an investor we are always weighing out options. What's the easiest, most simplist and cheapest but most effective way to execute a transaction. It sounds "simpler" why not just assume the mortgage, but if you've explored that route, it requires much more paperwork, cost and quite frankly time that a seller doesn't have when it a foreclosure situation. The seller I'm buying this Subto from and honestly, all of my Subto purchases, have been in a tight time crunch and highly motivated position to work with someone with a creative mind who can execute a transaction quickly and the most simply. The "challenges" and concerns you hear about Subto do not weight out the benefits of Subto when done correctly in my opinion. Happy to chat more about it over the phone and give examples but love the question for sure! 

A lot of assumptions here and think at this point we are moving away from a constructive conversation. No time for text battles, but I am more than happy to chat. Again, this is not my first Subto purchase 😎🙏

@Ken M. Trust me I am totally aware. Although, hopefully my answers to your questions can reassure you this isn't my first rodeo and I also have a great community in this subject as well 👍

@Ken M.

1. Yes, that's what the private money partner's capital will be used for and have bought/closed many transactions with OPM. 

2. Same answer as #1

3. Yes, having multiple streams of income and high income businesses helps for emergency debt service, which is very rare for the kinds of properties I buy but my income streams and businesses can very comfortably afford $1,800-$2K/month. My wholesaling real estate business alone generates around $10K/month with just me and a friend using our phone + computer texting with overall monthly expenses between $500-$700 on good niche lists. Mostly vacant land. 

4. I would not refinance in this case, I would deed property back to seller and perform a contract for deed. I am also in a high level subject-to mentorship that teaches this in detail. 

5. Yes, roof leaks aren't expensive when caught early and this isn't an old roof by any means. HVAC units can be financed easily through many HVAC companies and have done that 3 times already in my career and let the cash flow (essentially the tenant) pay off the HVAC. Broken pipes fall under home insurance if it's really an emergency, but have never had any of my properties do that as I only buy newer more well built homes. Of course it can happen but again, caught early, mitigate damage and move forward. 

@Ken M. Thanks for sharing brother! 

Great points! Thank you for taking the time to share! 

I hire experienced Subject-to transaction coordinators from a mastermind I'm currently in. 

With that is a bunch of seller disclosures clearly outlining the risks and that the loan is not being paid off and will still be attached to the seller, to answer your complaint concern. When subject-to is done correctly, you have the paperwork and signatures to protect you that the seller wasn't "taken advantage of" but agreed to this type of sale as it greatly benefited them from foreclosure.

The HOA allows rentals but in the event they change their mind, we have a creative backup plan for guests to be "owner occupants" temporarily while staying for several months.

If the loan is accelerated, we would deed the property back over to the seller and execute a contract for deed where we still maintain ownership but on paper it satisfies the bank's need for the borrower to be on title. 

Also, if I truly had to sell the numbers are break even based on selling it without realtors, using a flat fee service that only charges $300 to be listed on the MLS, in a good neighborhood with high demand for housing here in Greenville and low inventory.

In my mind worst case scenario if I had to sell within 1 year or rent long-term the numbers are all break even but the longer I hold it the better the deal and the upside is much greater than break even risks. 

Love these conversations though! 

@Chris Seveney Yes, completely aware and that's definitely true. I'll be leaning on my experience I already have with underwriting, buying and executing profitable mid-term rentals. As a long term rental it breaks even. Which in my opinion, is still a great buy if break even is the lowest level of income considering rents will go up and value over time but that 2.75% mortgage will stay the same and get paid down.