All Forum Posts by: Derek Dombeck

@Lisa Sluss

Start Networking with private individuals with cash or retirement accounts and leverage your equity with private lenders instead of banks. I stopped using banks in 2009 and after growing my network of investors I typically have more money than I can utilize.

Not if Kate is smart...... Kate should have a 1st position mortgage to protect herself.  That being said, you may be able to convince Kate to subordinate to 2nd position to allow a bank to write a loan and have the 1st position if it financially benefits her.

You can trade deed for deed. You would carry you tax basis from your current property into the new residence. This should not create a taxable event.

@Steve Puglisi

if you use your own IRA to purchase the property, you would not be able to leverage the rest of the house unless you had a non recourse loan, which is very hard to find. Plus, you can no longer do any work to the property yourself. You literally can't change a lightbulb without risking your IRA, because it is considered a benefit to you personally and is a prohibited transaction. I would rather use someone else's IRA and then maybe loan your IRA out to equal out the expense of using OPM.

Absolutely, but the seller isn't "gifting" anything. They may be in a position where they don't need the chunk of cash and by taking payments, they have the ability to make a return on their money. I have done this in several different ways.  How I structure  the offer depends if the property owner lives in the property or not. If they do, they fall under a capital gains exemption, up to a certain threshold, when they sell their home. So, if they are collecting interest, they will have to pay income tax on it, but the principal portion of each monthly payment is tax free. I would instead offer them an above retail price for the property and then ask for a 0% interest rate. There is IRS exceptions to the imputed interest laws that are in place. Please see you tax professional.......if they can't find them, please see a BETTER tax professional........
Essentially, by structuring this way, you have raised your tax basis in the property as well.  I can't finish my thought as I'm on an airplane that's taking off. Hope this helps.

Learn how to Masterlease, Lease/Option, or use Options to control property without ownership. Cashflowdepot.com is a great source

It's time to start using private investors instead of banks. You should look at your immediate network of friends and family as well as start networking with RE investors in your area. If you have a proven track record of successful deals, you will find people that want to work with you.

Do you know anyone who has an IRA or cash in the amount of 80k? If so, you could do the structure you just described by originating the 80k note and have the seller of the property immediately sell the note to your financial friends IRA at closing.
OR
You could ask the seller to refinance the property prior to closing and buy the property subject to the financing.

You can work with an existing lender or go to your local REIA clubs and start meeting people.

You can write your contracts on the standard Realtors form for your state. If there is seller financing terms that need to be spelled out, just add it as an addendum to the contract. You certainly don't need a Realtor if you are confident in what you are drafting.  You could use an Attorney as well, but they do have a tendency to over complicate deals which sometimes kills the transaction.
As far as balloons go, I'm not afraid of them as long as you can negotiate an extension provision upfront. This way, if the refinance or sale of the property does not go as planned, you can get more time. I've negotiated 5 year extensions for a $5000 additional payment to be paid at the balloon date. That payment goes toward the principal balance of the loan. You may also have to offer to increase the interest rate a little bit too. GOOD LUCK!