All Forum Posts by: Brian Gibbons

Brian Gibbons has started 114 posts and replied 4413 times.

I would ask for a 1003 app and w 2 and a VOE

Then I would see a mortgage broker

If the renter has a good chance to get a FHA mortgage at 3%, work out

Rent market rate

3% option fee for the contract

Strike price new appraisal today, have him pay for it

12 month term, new lease

I tell rent people, if you want to rent, pay the rent, theres no equity in rent.

If you want to own, you need to qualify. Credit and Job and Down payment. Build equity down the road.

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Private Lenders - Invest in Main Street, NOT Wall Street!

Read

The Millionaire Next Door

https://www.amazon.com/Thomas-J-Stanley/e/B000APC2MY/ref=dp_byline_cont_book_1

How to Finance any property

https://www.amazon.com/gp/product/0757001351

My favorite way is to go to REIA Meetings

See

https://www.biggerpockets.com/rei/real-estate-clubs/

Ask the organizer if you can make a 30 second commercial

Say "I am looking for 2 - 3 private investors, I pay 9% in 90 days, I do rehabs, you get Real Estate Security with a note, you get 9 x 4 or 36% return, and you can use your IRA money! Come see me at the back."

Get their name, address, email, cell, call them later.

Hope that helps.

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Hi Anita,

What state are you in?

Lease Options, Sub2, Land Contracts to purchase

Lease to Own and selling for cash or notes as exit strategies

Lots here on BP

See

https://www.biggerpockets.com/forums/50/topics/142491-bad-credit

Good luck!

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Originally posted by @Mary M.:

Well simply addressing your comment flipping is not about cash flow, and you already pay a 25% tax when you flip its called a capital gains tax

Hi Mary,

An example of an investment property sale

let’s say that you own an investment property that you purchased for $200,000, inclusive of acquisition costs. After holding the property for five years, you’ve claimed $36,365 in depreciation. After five years, you sell the property for net proceeds of $250,000. This gives you a capital gain of $50,000 on the sale, which will be taxed at your appropriate long-term capital gains rate. You’ll also owe depreciation recapture on $36,365, which will be taxed at your ordinary income rate.

I believe Bernie wants 25% not including the regular taxation issues of investment property.

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https://papersourceonline.com/sanders-goes-after/ link

Bernie Sanders Goes After Real Estate Investors

By W. J. Mencarow

Sen. Bernie Sanders wants a 25% “house flipping” tax levied against investors who sell a property at a profit within five years of purchase.

He also wants a 2 percent “empty homes tax” on the property value of vacant homes in order to discourage real estate investment.

From Bernie's Website

"When Bernie is president, he will:

Create an office within the Department of Housing and Urban Development to coordinate and work with states and municipalities to strengthen rent control and tenant protections, implement fair and inclusive zoning ordinances, streamline review processes and direct funding where these changes are made.
- This office will convene key leaders, academics, experts, local officials, renters, tenants, and homeowners to create and implement these necessary solutions.
Preempt laws that prevent inclusionary zoning for luxury developments.
End exclusionary and restrictive zoning ordinances and replace them with zoning that encourages racial, economic, and disability integration that makes housing more affordable.
- Require that recipients of federal funding from the Department of Transportation and the Department of Housing and Urban Development make these important zoning reforms.
- Provide funding to states that preempt local exclusionary zoning ordinances to make housing more equitable, accessible and affordable for all.
Make federal funding contingent on creating livable communities.
- Encourage zoning and development that promotes integration and access to public transportation to reduce commuting time, congestion and long car commutes.
- Prioritize projects that reduce greenhouse gas emissions, create walkable and livable communities, and reduce urban sprawl.
Encourage zoning and development designed to expand and maximize the number of units fully accessible to people with disabilities.
Place a 25 percent House Flipping tax on speculators who sell a non-owner-occupied property, if sold for more than it was purchased within 5 years of purchase.
Impose a 2 percent Empty Homes tax on the property value of vacant, owned homes to bring more units into the market and curb the use of housing as speculative investment.
Encourage “circuit breakers” on property taxes to protect homeowners in gentrifying neighborhoods from being priced out of their own homes as their property values rise.

From my point of view, anything that impedes or obstructs REI's cash flow is a bad thing.

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Ok here is a video from my BP blog - Intro to Creative Financing Techniques

https://www.biggerpockets.com/member-blogs/3/44023-introduction-to-creative-financing

And one from the same BP Blog - Sub2 Intro

https://www.biggerpockets.com/member-blogs/3/43167-sub2---learn-the-basics-of-subject-to-existing-financing

1 Vote

Originally posted by @Erin Elam:

Originally posted by @Brian Gibbons:

That's like I want to learn ice hockey, lol!

Hey @Chaz Reid

What's SME ?

Here is a mini lesson on subject to

Subject to means get the deed or subject to existing financing

You buy the house subject to the existing financing

It's on the HUD 1 what loans are being taken subject to the existing financing

The business model is cash or terms

Low equity deals like 95% loan to value deals are commonly use subject to or lease-option assignment or wraparound mortgage purchases

I generally talk to sellers are not agents

The closing question is,

Mr. Mrs. seller I know you could pay the cost to sell with an agent but you probably have to pay to get rid of the house, as the cost to sell about 10% to 12% of the value of the house

You could rent it out

But here's a question I want you consider

What if I can get you a payment that would pay your P ITI for 24 months, someone would move into your house take care of it, at the end of the 24 months your house price would be whatever you are we can some mortgage or the ending balance, I don't even know if I can get my business partner to agree to it but if I could get those 24 payments paid on time, and you kept the loan in your name for 24 months just assuming the payments, with that be something you'd even consider or maybe not?

Hi Brian!

I hope you're still around 😊.

Question about your question to seller. You said 'at the end of 24 months your house would be whatever you are we can some mortgage'... can you please explain what you are saying? With 95% LTV there's barely any equity right? So at the end of the 24 months, do you offer to just pay off the remaining mortgage (meaning the seller doesn't make any profit) with a refinance from your new homeowner, or is there a balloon amount agreed on at the beginning of the 24 months (and seller pays anything in excess due to taxes or ARM, etc)? Trying to understand what you said 😊.

Thank you in advance,

Erin

-------------------------

Ok Erin, thanks for catching that vague statement...

Original....

Subject to means get the deed or subject to existing financing (you get on the deed by promising to make the payments.)

You buy the house "subject to the existing financing" (there is no due on sale clause jail, that if the bank found out you got the deed and were making payments, they MIGHT call the loan, they do not HAVE to call the loan, due on sale clause a.k.a. alienation clause in the mortgage)

It's on the HUD 1 what loans are being taken subject to the existing financing; HUD 1 statement is the closing statement at the escrow closing. See

https://www.hud.gov/sites/documents/1.PDF

The business model is cash or terms (I like to give the seller a low cash offer and 2 terms offers, like cash plus 2 of sub2 - land trust, lease option, contract for deed-land contract, etc.)

Low equity deals like 95% loan to value deals are commonly use subject to or lease-option assignment or wraparound mortgage purchases (no equity, must do a terms deal)

I generally talk to sellers are not agents. Sellers will ok a terms deal for cash flow rescue, especially a vacant house with a mortgage payment).

The closing question is,

Mr. Mrs. seller , I know you could pay the cost to sell with an agent but you probably have to pay to get rid of the house, as the costs to sell about 10% to 12% of the value of the house

You could rent it out

But here's a question I want you consider

I don't even know if I can get my business partner to agree to it but IF I could get those 24 monthly payments paid on time, and you kept the loan in your name for 24 months, I'd just assuming the payments, would that be something you'd even consider or maybe not?

So you would take over the payments, lease option to tenant buyer, and at the end the buyer would have the house and the sub2 seller would have the house mortgage paid off.

I did my first sub2 a long time ago, and i use sub2 mostly on fix and flips. I try not to have the sub2 deal for more than 6 months during the fix and flip.

1 Vote

@John Jackson

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@Jackie Lange knows all about this. Shout out to Jackie.

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All Forum Posts by: Brian Gibbons

Brian Gibbons has started 114 posts and replied 4413 times.

Post: How to DO a "Rent to Own"?

Post: How to secure private lenders for residential properties?

Post: Beginning Investor Questions

Post: Bernie Sanders - Not Good for Flippers - Increase Taxes

Post: Bernie Sanders - Not Good for Flippers - Increase Taxes

Post: Subject To

Post: Subject To

Post: Subject To

Post: Easiest way to Lease Option in Texas?

Post: How are the pros owner financing mobile homes in 2019?