All Forum Posts by: Jason Oliver Myles

There are a lot of things you need to be aware of if you are investing in real estate using creative financing strategies. Specifically subject to deals.

I recently wholesaled a sub to deal in Texas that everyone passed on. The owner tried to list it and know one would close on it. So as a person that likes to solve problems, I started to dig into the deal.

The seller was anxious to get out of the house as he was behind in payments and had gone through a divorce. He was just over it all. I made a tentative deal with him that would have given him $25,000 to walk away after inspection and COE. 

As we were doing the inspection, I noticed cracks that had been repaired at the foundation. So I asked the seller about it. He told me that there had been an issue with the foundation in the past and that he had gotten it repaired but didn't have the information anymore to the contractor that did the work. 

We hired and inspector who informed us that there was significant foundation issues that needs to be addressed as soon as possible. It would cost anywhere between $15,000 and $50,000 depending on what they find when they pull up the flooring. (it was on a slab) I informed the seller about this and he was just shocked. You could see the air seep out of his lungs. He just wanted to save his credit and now it was over...

So in my due diligence period, one of the things that we need to get is a copy of the insurance policy. As I'm reading it, I'm looking for all of the coverages and any additional coverages that would have been added on by the seller at the time he got the policy. Lo and behold the foundation was covered under the policy!!! 

I went back to the seller and told him that we can still do the deal but we would have to renegotiate our deal because the deductible is really high. The seller agreed and I went to work.

We got it fixed and I was able to get it sold in just days and made $10,000 as a wholesale fee.

The moral of the story is, do your due diligence. Learn what you can and can't do in any given situation. In our case it was just reading what others didn't even ask for, the insurance policy.

Let's talk about it...

I think you raise an interesting point. Having said that, I've been investing for over 20 years now and the only time I've seen a lender exercise their right is when something went wrong with the loan. Lack of payment, insurance was improper, tenant occupancy, etc. Of course there are other things that can happen that are out of the investors control such as an internal audit but outside of this, it would be super expensive and time consuming for lenders to randomly review all of there loans without cause. That's a lot of title searches. It's best to let the individual investors make a mistake and then they can swoop in and exercise their right. With more and more people wanting to learn this strategy, it stands to reason that we in the investor community will be hearing more and more stories about how the DOSC ruined someones life. Learn this strategy from someone that is and has been actively investing in sub to deals. There are a lot of pitfalls that many aren't aware of. Just my observation.

Great question, no. Although it came from an agent, it was a pocket listing. The ARV, about a month ago was $385,000. It went to a franchise buyer. (not mentioning any names) Ugh... lol

 Absolutely my friend. Can't wait to share more...

 Thanks man!

Investment Info:

Single-family residence wholesale investment.

Purchase price: $130,000

This is a property that we had to take down ASAP! We had days to take it down not weeks. I secured private money from our investor pool and closed all cash paying no points and 2% on the money for a short term flip. We put it out to our buyer pool at $160,000 and got an offer on the 21st at $150,000 and will close on 11/04/22. It will cost me just about $5,000 so I'll profit $15,000. Not a bad deal with NO MONEY DOWN!!!

What made you interested in investing in this type of deal?

We market consistently and no matter the condition of the property, I will make cash offers on every deal. It is always one of my options. The next is creative financing structures. This property needed a lot of work and the seller was getting code enforcement tickets. They just wanted out!

How did you find this deal and how did you negotiate it?

I got this deal through a real estate agent that was losing this deal. I market to real estate agents all day every day letting them know that there is a way for them to still make money on dead or dying listings. Of course timing is equally as important. I negotiated with the agent which allowed the seller to give me a better cash price and the deal was mine!

How did you finance this deal?

I had to close this deal in 7 days. I picked up the phone and called my pool of private money lenders and in less than 24 hours I had the cash at 2% for 45 days to resell it. Now, let me preface this by adding, I've been doing this for a long time. I have built up a great following and list of people I can call at any time. BTW, I'm alway growing it.

How did you add value to the deal?

I went into this deal knowing I was going to wholesale it. My negotiating skills is what created the value. The initial asking price was $165,000, so getting it at $130,000 was a steal and I had one thing the seller didn't have, TIME...

What was the outcome?

It is now under contract at $150,000 and scheduled to close on 11/04/22.

Lessons learned? Challenges?

Not a lesson learned, rather one reinforced. That is always think creatively, even if you are using all cash to buy a deal. THINK CREATIVELY!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, the agent responded to one of my targeted ads and BOOM! Here we go...