All Forum Posts by: Deb S.

Quote from @Account Closed:

Quote from @Deb S.:

Quote from @Account Closed:

Quote from @Deb S.:

Quote from @Nate Marshall:

He has had more than 10 called due. Banks are wise now. They are even discussing this at banking and mortgage conferences. Pace is finished. Prison awaits!!! 

Why are you mentioning prison? Subto is NOT illegal. It is on the HUD statement on line 503. There is no 'crime' committed. The banks MAY call the loan due but it is not illegal to buy a property sub to the existing mortgage.

You are correct, Subto IS legal, when done legally.
Withdrawing money from the bank IS legal too, when done legally.

Are you aware that when done improperly, Subto can lead to charges of Consumer Protection ACT violations, artifices, deception by omission, equity skimming, bank fraud, mortgage fraud, tax evasion and so on. Just say "No, I didn't know that". Well, yes it can.
https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Hom...

Now, "charges" doesn't necessarily mean anyone is guilty, but why put yourself in that position? Court ties you up for a year to a year and half with no guarantee of the outcome. (and is no fun.)

I’m here to protect people from making very bad mistakes, as I teach Subto “safely and legally”. It’s up to individuals though, to get serious and learn things properly.

Be safe, know the law, stay legal. There is zero talk of that at the Subto "community" (Bad news interferes with increasing the sales, cuts into the profit margin I suppose).

 So you assume that Pace teaches how to buy a property subto without providing a legal contract with needed addendums? 

If you were in the community, you’d know how ludicrous this sounds. Pace spends tens of thousands of dollars keeping contracts updated for all of us. 
You shouldn’t make assumptions on how the mentorship works. 

You're very funny and I probably wouldn't work with you. You didn't read what I wrote and you are saying things I didn't even say and things I don't believe. In court they call that "false testimony". I would suggest you ask people what they believe, rather than telling them what they believe.

By your focus on the contracts, which I didn't even bring up, I surmise you have no idea what can go wrong after the closing, thus proving my point. Have a nice day.

 Contracts are what makes something done legally or not. You have a nice day as well. 

Quote from @Account Closed:

Quote from @Deb S.:

Quote from @Nate Marshall:

He has had more than 10 called due. Banks are wise now. They are even discussing this at banking and mortgage conferences. Pace is finished. Prison awaits!!! 

Why are you mentioning prison? Subto is NOT illegal. It is on the HUD statement on line 503. There is no 'crime' committed. The banks MAY call the loan due but it is not illegal to buy a property sub to the existing mortgage.

You are correct, Subto IS legal, when done legally.
Withdrawing money from the bank IS legal too, when done legally.

Are you aware that when done improperly, Subto can lead to charges of Consumer Protection ACT violations, artifices, deception by omission, equity skimming, bank fraud, mortgage fraud, tax evasion and so on. Just say "No, I didn't know that". Well, yes it can.
https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Hom...

Now, "charges" doesn't necessarily mean anyone is guilty, but why put yourself in that position? Court ties you up for a year to a year and half with no guarantee of the outcome. (and is no fun.)

I’m here to protect people from making very bad mistakes, as I teach Subto “safely and legally”. It’s up to individuals though, to get serious and learn things properly.

Be safe, know the law, stay legal. There is zero talk of that at the Subto "community" (Bad news interferes with increasing the sales, cuts into the profit margin I suppose).

 So you assume that Pace teaches how to buy a property subto without providing a legal contract with needed addendums? 

If you were in the community, you’d know how ludicrous this sounds. Pace spends tens of thousands of dollars keeping contracts updated for all of us. 
You shouldn’t make assumptions on how the mentorship works. 

Quote from @Nate Marshall:

He has had more than 10 called due. Banks are wise now. They are even discussing this at banking and mortgage conferences. Pace is finished. Prison awaits!!! 

Why are you mentioning prison? Subto is NOT illegal. It is on the HUD statement on line 503. There is no 'crime' committed. The banks MAY call the loan due but it is not illegal to buy a property sub to the existing mortgage.

Have you thought about JVing with someone? I'll bet there's someone else in a similar situation to yours who needs a partner for one reason or another. Even if that partner was a co-signer and then you flipped it together, it would be a learning experience with an opportunity to make some cash for the next deal and so on. 

Read the book 'Who Not How' by Dan Sullivan. Once you stop focusing on HOW to fix your problem and focus on WHO can fix/help with your problem the doors of opportunity open up! You don't need all the answers, just find someone who does have the answers. Attend some local meetups and ask if anyone needs a partner. Tell them what you have to offer and then tell them what you need. It's that simple.

Good luck to you. The fact that you are 18 and starting out with this mindset tells me you will be going places. Network whenever and where ever you can to find the WHO'S you will need in your journey.

You could use a JV agreement to go with the note (note drafted by an attorney). So the note can stay within usuary laws and the JV can specify a certain dollar amount or percentage of profit upon sale of the property you lent on. JV agreement needs to specify your entity is paid out of escrow on sale of the property.

Basically your note charges a certain 'legal' interest rate. The JV agreement allows any amount over what's specified in the note to be collected as a % of profit upon sale of the property. Since a JV is not recorded (like a DOT/mortgage) it would be a good idea to also have specific escrow instructions that match what's in the JV agreement (your entity is paid from sale of the property). When the property is under contract to be sold, make sure the title company/attorney gets a copy of the JV agreement and escrow instructions - and review it with them. Make sure they understand your role and that you are to be paid accordingly.

Quote from @Thomas Rutkowski:

Quote from @Michael Norwood:

Quote from @Deb S.:

If you have that kind of money, you may want to look into Infinite Banking (IB) as a strategy. It's basically using life insurance as a tax free investment vehicle. So you 'over fund' your WL policy and if the policy is structured for IB, you can take out up to 90% of the funds you just put in as a loan. Loan rates vary but typically around 5-6%. 

The concept is to then use the funds 'borrowed' to invest in RE or whatever will make you a return higher than the borrowed rate. So for example, you could be a private money lender at 15% annually and use the monthly returns to pay back your policy loan and pocket the difference tax free. The $ you 'pocket', can be used for whatever.... pay for your policy premiums, add to a SD IRA or QRP, add to a Roth, buy a property, JV with someone on a property, start another WL policy (maybe this one is for your kids college), buy a car (not the smartest move but you get the idea).

Unfortunately, we always need to keep taxes in mind because Uncle Same always wants a piece of the pie. 

As always, consult a tax professional for your specific situation. 

 @Deb S. 

Thanks for bringing up Infinite Banking (IB)! I haven't explored it extensively, but the concept of tax-free growth and leverage within a life insurance policy is intriguing. Would you be able to share more about how you find life insurance policies suitable for IB and structuring those loans? Also, how do you manage potential downside risks like market fluctuations and loan repayments?

 You want a maximum over-funded life insurance policy. It does not need to be "infinite banking" or "Bank on yourself" or any of those. What you are looking for is a policy with the lowest possible death benefit for the premium you would like to pay. That will give you a policy with the most cash value. Ideally, when you are looking at an illustration, you should see a first year cash value that is about 90% of the premium that you paid. That is a good indication that the policy is properly designed. As little as possible will be going toward the costs and expenses of the policy.

Agreed. This is the concept of infinite banking - over funding the policy to use the cash value. The policy is not being bought for the death benefit.

Quote from @Michael Norwood:

Quote from @Deb S.:

If you have that kind of money, you may want to look into Infinite Banking (IB) as a strategy. It's basically using life insurance as a tax free investment vehicle. So you 'over fund' your WL policy and if the policy is structured for IB, you can take out up to 90% of the funds you just put in as a loan. Loan rates vary but typically around 5-6%. 

The concept is to then use the funds 'borrowed' to invest in RE or whatever will make you a return higher than the borrowed rate. So for example, you could be a private money lender at 15% annually and use the monthly returns to pay back your policy loan and pocket the difference tax free. The $ you 'pocket', can be used for whatever.... pay for your policy premiums, add to a SD IRA or QRP, add to a Roth, buy a property, JV with someone on a property, start another WL policy (maybe this one is for your kids college), buy a car (not the smartest move but you get the idea).

Unfortunately, we always need to keep taxes in mind because Uncle Same always wants a piece of the pie. 

As always, consult a tax professional for your specific situation. 

 @Deb S. 

Thanks for bringing up Infinite Banking (IB)! I haven't explored it extensively, but the concept of tax-free growth and leverage within a life insurance policy is intriguing. Would you be able to share more about how you find life insurance policies suitable for IB and structuring those loans? Also, how do you manage potential downside risks like market fluctuations and loan repayments?

I have my life insurance license so that’s how to find a policy suitable for IB or you can certainly call an agency that offers this kind of policy. 
Regarding market fluctuations, this part of ensuring the policy is structured properly with a guaranteed interest rate if WL or with a floor interest rate if IUL (meaning even if the market tanks 10% in a week, you don’t participate in that because your floor is 0% for example). 
Loan repayments: you don’t HAVE to pay the loan back-but… the death benefit is reduced by the amount not paid back in the case of a WL policy. With that said people who use IB are not in it for the death benefit they are in it for tax efficient use of their own money. 
There’s more to these IB policies than can be explained here but I hope you got the general idea. 
Send me a message if you want to know more. I’ll be happy to chat with you. 

If you have that kind of money, you may want to look into Infinite Banking (IB) as a strategy. It's basically using life insurance as a tax free investment vehicle. So you 'over fund' your WL policy and if the policy is structured for IB, you can take out up to 90% of the funds you just put in as a loan. Loan rates vary but typically around 5-6%. 

The concept is to then use the funds 'borrowed' to invest in RE or whatever will make you a return higher than the borrowed rate. So for example, you could be a private money lender at 15% annually and use the monthly returns to pay back your policy loan and pocket the difference tax free. The $ you 'pocket', can be used for whatever.... pay for your policy premiums, add to a SD IRA or QRP, add to a Roth, buy a property, JV with someone on a property, start another WL policy (maybe this one is for your kids college), buy a car (not the smartest move but you get the idea).

Unfortunately, we always need to keep taxes in mind because Uncle Same always wants a piece of the pie. 

As always, consult a tax professional for your specific situation. 

I agree with what @Richard Capers Jr suggests. If you have access to VA benefits, use them!! The only other suggestion I would make is to buy a property subject to the existing mortgage so you can benefit from an existing low rate mortgage (ideally less than 5%). The entry fee on these is typically about 10% of the purchase price + closing costs.

Alternatively, you could try to find a property on seller finance and work out terms that benefit both you and the seller. You may need to offer a higher purchase price to get the terms you need but if those terms make you cash flow at a higher purchase price with a lower interest rate than what you'd get conventionally, then it may be worth pursuing.   

It really depends... How much time did you spend trying to find a lender? Did you do any underwriting, comps, etc. Did you verify any of the information that the borrower provided - LLC/Operating agreement, validate the ARV and comps provided, the scope of work, holding costs, etc.

If you're connecting a PML, I hope you do your own due diligence to see if it's a deal that should be lent on in the first place. Many of the requests I get for funds aren't a deal at all once I start going through the numbers. So.......if you wouldn't lend on the project, don't pass it on to someone who may lose money by lending on it.