All Forum Posts by: Ken M.

Possibly. But not likely would it be practical.

A reverse mortgage replaces a traditional mortgage and has certain requirements, and would likely be required to pay off the debts in the bankruptcy, including the first mortgage, taking them out of bankruptcy altogether.

It would require coordinating the debtor, a lender willing to work with someone in bankruptcy, the trustee, the debtor's attorney, the mortgage lender getting paid off, appraiser, underwriting etc.

The new lender would likely require that the debtor be taken out of bankruptcy as a condition of closing. It would be unusual for a judge to allow someone to refinance and not pay off some debt. It would be equally unlikely for a lender to take on that risk. 

The court would have to approve it. The Trustee would have to approve it. The lender on the 1st mortgage if any, would have to approve it. The lender may have a list of repairs that are needed to be done before approval of the loan.

Meanwhile, the clock is ticking. Bankruptcy has timetables. Delays are very common, but it still has a clock ticking and other creditors demand being paid. In some instances, other creditors can vote against the plan and make a rework of the whole project required. The debtors have to start making payments again during this period or they could be kicked out of bankruptcy for not meeting the obligations agree to.

It would have to become part of the repayment plan if a chapt 13 or outside of the plan with a reaffirmation of the debt in a chapt 7. It would make a difference in the types of debt a debtor is getting relief on. It would be impacted if there was IRS debt.

It would depend on things like if it's a chapter 13 (you get to keep your house if you start making payments again and the court approves your chapter 13 "plan".) or a chapter 7 (which says, heck with it, I'm starting over. 

It would matter if the reason a chapt 13 was filed was to stop a foreclosure.

Most bankruptcy attorneys will not explore those options because they're limited in how much they can charge to do a bankruptcy and they can't really make any money on this type of "add-on". Also, most bankruptcy attorneys would not know how to actually put that together, since it is so rare.

It would require several months to get to the stage of knowing if it will fly because court hearings are scheduled 30 to 45 days in advance depending on the judge's calendar and the judge would have to be educated on why it benefits the bankruptcy estate. 

Yes, unicorns do fly. I've seen them do so, but this is an elephant and no, I've haven't seen elephants fly since Dumbo. 

If you are using FHA or VA money to buy a property, they will require an inspection but they won't use yours. It has to be ordered by them.

Two different inspections will produce two different lists of concerns. It always does.

It might be worth doing to prepare you for the shock that all houses have problems to address. 

It sure won't impress the sellers to have all of the deficiencies of the property exposed to a sometime, maybe in the future, potential buyer. Also, in some areas, they are required by law to put into writing all known problems with the property once they become aware of it. That may not be to their benefit if they end up selling on the MLS. Fine for you perhaps, if you become the buyer, but what if you aren't the buyer.

I would suggest you simply get ahold of someone's inspection report and go over it so you can see what kinds of things wind up on a report, before you go through the intrusiveness and disturbance of doing a home inspection on a property you don't have a purchase & sale agreement on.

Doing a home inspection is like making a 16 year old care for a baby for a few days. It's a

prophylactic against doing stupid things, like buying a house before your ready and being properly prepared.

So, what is YOUR community up to? 

Seriously folks, SubTo is for experienced investors who have money, knowledge  and experience. It can Not be learned in a group setting. Unless you like this kind of group setting. 

If you choose to do Subject To, like I do, get personal training, and have some money to invest.

Don't tell me your attorney looks over all of the Guru's contracts and he has had the attorney general on his podcast. Maybe that's how they gathered the names. That's an awful lot of LLCs that provided no protection whatsoever.

It's a long post so click on sections to expand to see who has been indicted. 

Each one of those lines is a person or a company. Filed March 7 2025

(Forget about worrying about the "Due on Sale Clause" that's peanuts compared to this.)

Why, it's the whole Famn Damnly. But, wait there's more: They've left room for more indictments.

Remember this, it isn't just the SubTo, it's the way it is applied and to whom.

I know someone who knows the difference, on a one to one basis.. ;-)

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"I am what I am, and do what I can."


That makes you sound like Popeye the Sailor man. ;-)

There are a lot of ways to buy properties. Some ways are best for single family residences, some for multi-family, some for commercial, some for Short Term Rentals, some for manufactured, some for land, some for building, some for vacation and on it goes.

So, if you are buying in CA how is that different than in TX or in OH? Creative Finance or Traditional?

Did you know that creative finance is only a very small portion of the purchases being made? Then why are all the people acting as if it's banana cream pie or carrot cake (if you like that better). It's fun to dream about but it makes you fat or has other side effects.

The differences of creative finance varies state by state. The hardest part of putting a creative finance deal together isn't structuring the deal, it's finding the deal in the first place. Let me explain:

Buying a property on the MLS at full price using creative financing is not a smart idea. Especially in a declining market.

All purchases are subject to a possible "reversal". Something changes. You have to sell the property. My typical purchase is in the $400,000 area. I typically buy at 85% of value. So, I pay about $340,000 for the property with no expenses going to real estate agents. If the market crashes and I have to sell for some odd reason, I have plenty of equity to over the cost of selling.

However, if I bought off of the MLS at $400,000 for a property worth $400,000 using "creative financing" and I had to sell for some reason, my cost of selling runs about 9% (as will yours) so about $36,000. I then have to bring in $36,000 just to sell the property. Now. if properties go down 10% which is predicted to happen, (Wall Street Journal, Core Logic) I'll have to sell at $360,000 ($400,000 minus 10%) AND have the same closing costs. So, my cost to sell is now $76,000 out of pocket. Even if it's a creative financing deal, you HAVE to know your numbers.

The only ones that benefit when you use creative financing, buying off of the MLS, are the real estate agents and the "Gurus" who teach that it's a good idea. Heck they say, they'll even find someone less trained than you to lend you the money for the real estate agent costs and for closing . . . for a fee of course.  That puts you in an even worse situation. It's like lending you money at a high interest rate to buy an F1 to drive in a demolition tournament .

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Your comment "As a new user, I don't know enough to start a commotion. If needed, spank away ."

That is the smartest thing I've seen here in quite a while.

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I know I sometimes come across as a stern old dad that tells the kids not to take a pee in the  middle of the street in busy traffic at rush hour, especially when it involves creative finance, but I'm a fuzzball at heart. 

The reality is that too many people are told that real estate is easy, there is no risk, they can borrow their way to wealth by buying over priced properties with none of their own money, by ripping people off with equity stripping.

But I fought my way through lawsuits that took eight years and went to the federal appellate level, fighting the largest multi billion dollar title company and a legion of attorneys and in the end the federal judge agreed that I hadn't done anything wrong. But, they did change the law, at the federal level and the local level as a result. 

For you lurkers, you are being lied to. This is not 2007. What you are being taught in the "community" is no longer legal. It hasn't been legal for years and it is going to catch up with those who are ignoring or don't know the law.

The case just filed in Arizona shows that. CV2025-008402 State of Arizona v Cameron Jones. This is not a light mater. Regarding buying properties, pre-foreclosures, subject to (SubTo) Probate, buying on the MLS, equity skimming ( also called equity stripping) and more.

You newbies, We are not trying to be mean, discourteous, scary, discouraging, negative, or unsupportive. If you are so limited about what you want and how you are going to go about getting it, you had better "lawyer up" first.

You don't have a clue about the gun slingers out there to get your money and get you into trouble. They are narcissists, they are engaging, they say they want to help people, they offer "free" advice, but it is extreme self-involvement to the point where the person (popular guru) ignores the needs (and laws) of those around them.

I have looked at their "properties" and how they claim they bought them and they are loser acquisitions from the MLS and elsewhere that are going to be collapsing soon. The market isn't allowing for their major errors in judgment.

Point is lurkers, if anybody cares about you not going through what I did, it'd be me. 

Think of me as a kind uncle, that doesn't want to see you get hurt or sued and is tired of people taking advantage of you. What I speak is from legal experience, not from wishful thinking. 

Just a quick word of advice. Bigger Pockets is full of people asking what they do now that they are in a 50/50 partnership and they can't agree on a major issue.

I know you and your brother are always agreeable and never have any disagreements, but in case that changes in the future,

I'd have each partner create an LLC and buy properties 51/49 (it can alternate going forward of course) but that way, for the sake of the investment, if there is serious disagreement of the solution to the then current problem, the partner with 51% ownership can decide what is best for the situation. The next property gets 49/51 ownership and alternates back and forth.

You can still disburse funds and profits 50/50. But you need to make tough decisions going forward and being 51/49 will cut down on delays, missed opportunities and legal expense. If your partner won't agree to this kind of setup, you need it more than you realize.