All Forum Posts by: Stanley Yeldell

Natalia, congrats on diving into the SubTo/Mortgage Wrap strategy—it’s a powerful tool when executed correctly. Here are some key points to consider:

Home Insurance:

You’ll need to keep the original seller’s policy in place to avoid triggering the due-on-sale clause.

Add a new “Landlord Policy” or “Dwelling Policy” under your entity/trust with you as the insured and the seller as an additional insured. This way, you’re covered for liability and property damage while maintaining the existing mortgage policy.

Land Trust:

Setting up a land trust can provide anonymity and simplify the transfer process. The seller deeds the property to the trust, and you become the beneficiary.

Ensure the trust document specifies your rights and responsibilities clearly, especially regarding payment obligations and exit strategies.

Use a trustee who is either neutral or trusted to avoid conflicts.

Mortgage Wrapper:

You’ll effectively be creating a wraparound mortgage that mirrors the terms of the original loan but with a higher interest rate or additional fees to generate cash flow.

Ensure that the wrap document clearly outlines the payment structure, escrow handling, and default terms to protect both you and the seller.

Due-on-Sale Clause:

Technically, transferring title to a trust or executing a wrap can trigger the due-on-sale clause. While many lenders don’t actively enforce it, be prepared with a backup exit strategy in case they do.

Other Considerations:

Check state laws regarding wraps and land trusts—some states have specific requirements or restrictions.

Consider using a servicing company to handle payments to the underlying mortgage and the wrap. This provides a third-party verification of payment performance.

Have a real estate attorney review the trust and wrap documents to ensure they’re airtight.

Would you like a sample trust agreement or wrap mortgage template to review?

Olivia, you’re definitely in a strong position here with that 2.875% interest rate and significant equity. The key is to structure the SubTo/seller finance in a way that maximizes cash flow while minimizing your involvement and risk. Here are some options to consider:

Slow Flip / Rent-to-Own:

Structure it as a lease option or contract for deed, allowing the buyer to take over payments while they also handle renovations. You could collect a higher-than-market rent and a non-refundable option fee (e.g., $15-20k) that goes toward the eventual purchase. This way, you’re reducing your management burden while still cash flowing.

Seller Financing as a SubTo:

Consider a hybrid structure. Have them take over the PITI payments but charge a "wrap" payment that includes a spread. For example, your PITI is $1,400, but you could structure the wrap payment at $1,800/month, allowing you to pocket $400/month passively.

Collect a substantial down payment to mitigate risk (e.g., $20-30k).

Partnership Approach:

If the buyer is experienced, consider a JV where they handle the renovations and management, and you both share in cash flow or eventual resale profits. This could keep you on title (so you maintain control) while allowing them to stabilize the property.

Cash-Out Option:

If the buyer has access to capital, you could structure the deal as a cash-out SubTo where they pay a lump sum upfront (e.g., $30-50k), take over payments, and get full control to renovate and reposition the asset.

Exit Strategy Considerations:

If the buyer fails to perform, ensure you have strong contract language for reclaiming the property. Consider a performance deed or installment land contract with clear default provisions.

Your interest rate and equity position are valuable, so make sure you’re getting compensated for that. Would you like some sample contract language or specific seller finance terms to consider?

Harrison, that seems pretty steep for a HELOC. Typically, HELOC fees can vary based on the lender and the size of the line of credit, but $5,000 just to open the account is on the high end. Here's what to consider:

Appraisal Fee: $550 is fairly standard, but some lenders waive it or roll it into the closing costs, especially for primary residences.

Account Opening Fee: $5,000 is significantly higher than average. Many lenders charge 1-2% of the credit limit or a flat fee, but $5k suggests either a very large HELOC or some less common fee structure.

Shop Around: It’s worth comparing offers from other lenders or credit unions. Some waive fees or offer promotional rates for the first year.

Negotiation: Ask for a detailed breakdown of that $5,000. Is it for points, origination fees, or something else? Sometimes lenders will negotiate or waive certain fees, especially if you have a strong credit profile or existing relationship with them.

Have you received other quotes, or is this the first lender you approached? Would you like some suggestions on other lenders to check with?

Jen, you're asking some great questions here, and you're right—navigating inherited assets in a self-directed IRA like Equity Trust can get complicated, especially with joint ownership. Here are a few considerations:

Selling While She’s Alive: This could potentially reduce the tax impact since your mother’s tax rate may be lower than yours and your sister’s. However, it would trigger capital gains taxes based on her cost basis ($60k), so run the numbers to see if it’s worth it.

Inherited IRA Strategy: If you inherit it as an IRA, you typically have 10 years to distribute the assets. You could keep it as rental income for 10 years, then distribute or reinvest the funds. This spreads the tax impact and keeps the investment growing tax-deferred.

Land Contract or Seller Financing: This could provide a steady income stream without the immediate tax hit of a full sale. It may also help to avoid dealing with setting up two separate accounts.

Combining IRAs or Alternative Custodians: Some custodians may offer more flexible or cost-effective ways to handle a 50/50 split or joint ownership. Check out specialized IRA custodians who handle complex inheritance scenarios.

Estate Planning Considerations: If your mother is open to it, establishing a trust that holds the property could provide more flexibility and potential tax advantages, depending on state laws.

You’re asking the right questions—consulting with a CPA and a tax attorney who understand both self-directed IRAs and estate planning would be a smart move. Would you like recommendations for custodians or professionals who specialize in this area?

Real estate deals don’t always fit neatly into a conventional loan package, especially when you’re looking to fund multiple projects or tackle unique properties. That’s where creative financing comes in.

✅ Seller Financing: How do you structure deals to keep cash flow strong while still giving the seller enough to walk away happy?
✅ Subject-To Deals: What’s your go-to method for negotiating existing financing without triggering a due-on-sale clause?
✅ HELOCs for Investment Properties: How do you leverage equity without over-leveraging yourself?
✅ JV Partnerships: How do you find partners willing to fund deals in exchange for equity, especially when cash is tight?

For those who’ve successfully used creative financing, what was the most effective strategy you’ve tried? And what pitfalls would you warn others to avoid?

I’m a PML as well, so happy to share insights on structuring private money in creative ways. Let’s brainstorm together!

Leslie, that’s a solid asset with significant equity—definitely some creative financing options here:

Cross-Collateralization: Use the $8M property as collateral to secure a blanket loan covering both properties. You could potentially leverage up to 70% LTV on the $8M asset to access $5.6M.

Cash-Out Refinance: Refinance the existing loan, pulling equity out for the purchase and improvements. Since you're running a profitable wedding venue with consistent bookings, a DSCR loan may work.

Private Money/Equity Partner: Approach a PML for a short-term bridge loan, secured by the $8M asset. You could negotiate interest-only payments until the new venue is stabilized, then refinance both properties together.

Seller Financing/Subject To: If the current owner of the $2M property is willing, negotiate seller financing or a subject-to deal, allowing you to keep more cash for improvements.

Business Line of Credit: Given the cash flow and long-term bookings, consider a business LOC secured by the venue's income to cover improvements and expansion.

Would you like connections to private lenders or a breakdown of potential terms?

Hey Antonio, welcome! Both deals have potential, but Deal 2 looks stronger overall—better area, healthier cash flow, and more manageable terms. You’re keeping more cash on hand and still building equity.

For Deal 1, tying up $45K for a C-class rental that runs negative cash flow early on is riskier. If you can negotiate better terms or lower the upfront equity, it becomes more appealing.

If possible, use a HELOC on your primary to keep cash reserves. Flexibility is key when scaling.

You’re thinking strategically—just watch liquidity and focus on long-term cash flow. Good luck!

Hey BP fam,

I wanted to drop a quick post about something I think more investors need to hear, private money isn’t just about funding deals… it’s about building relationships.

I’m a private money lender myself, and I also invest in real estate. I see a ton of messages from people asking for “quick funding” or “fast money” for their flips, BRRRRs, or buy-and-holds. And while the deal might look good on paper, what often gets missed is the trust factor.

Here's what makes me say "yes" as a PML:

Clear communication – You don’t need to be a seasoned pro, but I need to know the plan: purchase price, rehab budget, comps, timeline, and exit strategy.

Transparency – If it's your first deal, say so! If you've had a deal go sideways, share what you learned.

Follow-through – Nothing beats consistency and reliability. If you say you’ll send docs or call at a certain time, do it.

 Pro Tip:

Want to stand out to private lenders? Don’t just pitch deals, build a relationship. Ask us questions, check in with updates, treat it like a partnership, not a transaction.

Private lending isn’t transactional, it’s personal. And when you build trust, it becomes way easier to get funding on your next deal (and the next one after that).

Curious to hear from both sides, investors and lenders—what’s something that made a deal or relationship work really well for you?

Let’s help each other level up. 

Hey BP community,

As a private money lender (PML) myself, I’ve seen an increasing number of fake lenders popping up, especially on social media and online forums. If you're looking for funding, it's crucial to spot red flags before handing over personal info or paying unnecessary fees.

🚩 Common Scammer Tactics:

1️⃣ Upfront Fees Before Approval – Legit lenders might charge appraisal or legal fees, but beware of anyone demanding money before they even approve your loan.

2️⃣ No Due Diligence – A real PML will ask about the deal, your experience, exit strategy, and collateral—if they’re offering money with no questions asked, that’s a red flag.

3️⃣ Guaranteed Funding – No lender can guarantee a loan without reviewing the property and risk factors first.

4️⃣ Suspicious Communication – Poor grammar, generic email addresses (e.g., @gmail.com), and messaging through WhatsApp or Facebook DMs instead of business platforms.

5️⃣ Too Good to Be True Terms – If someone offers 100% financing, ultra-low interest, or “no credit check” with no collateral, be skeptical.

✅ How to Verify a Legit Private Lender:

🔹 Ask for references – Have they funded deals for other investors? Legitimate lenders should be able to provide past borrower testimonials.

🔹 Check their business registration – Are they licensed, or do they have a company website and verifiable online presence?

🔹 Talk to past borrowers – If they refuse to connect you with real clients, it’s a red flag.

🔹 Use escrow/title companies – Never send money directly to a lender—funds should go through a neutral third party.

I personally vet deals and investors before funding, and I always tell people to trust but verify. If you’re unsure about a lender, feel free to drop their details here or DM me—I’ll gladly help verify.

Have you ever come across a shady lender? Let’s discuss!

Virgil, you make some great points! Finding deals is easy—getting the funding is where most investors hit a wall.

While business credit stacking is a solid strategy for quick capital, many investors overlook private money lending (PML) as a scalable, relationship-driven funding source. Private lenders offer flexibility that banks and HMLs don't, especially for investors focused on fix-and-flips, BRRRR, and value-add rentals.

I’m a private money lender (PML) and help investors secure funding without the headaches of traditional lending. If anyone here is struggling to get capital for deals, let’s connect—I’d love to explore how we can make funding a win-win for your next project.

What’s been your biggest challenge with securing financing? Let’s discuss!