All Forum Posts by: Ken M.

I am getting started in real estate investing, with plans to buy my first rental by the end of this year or early next. Is paid mentorship worth the price? How do you vet the person to make sure they are who they say they are? I subscribe to someone's newsletter I connected with on Linked In. He offers $50/month coaching with direct access to him, and other benefits. The price seems reasonable, but I'm not sure how to vet his credentials. What is a reasonable amount to pay for a legit coach?

In my opinion, a legit coach is someone that is successfully executing a strategy you would like to learn, and is capable of constructing a win-win relationship with you that doesn’t involve you paying them fees. In my case, I have experience with single-family rentals (32 of them), multifamily syndications (invest in over 2200 doors), renewable energy, and flips (currently have 7 on the go). And I say to anyone reading this that if you take the time to email me I’ll be happy to respond and share my experience.

How much time per week will you commit to that person for the next year for free?

Will you pick up the phone when they need you?

0 Votes

Quote from @Harrisen Hagens:

Hi all—

I co-own an LTR with my parents, the property was purchased in 2022 for $240k and is currently assessed at ~$350k. The current loan balance is about $190k and is financed at 7.825%. The payment including insurance and property taxes is about $1700/month and the house is currently cash flowing about $200/month. When we purchased this property we were banking on interest rates coming down (RIP) to make a long-term venture worth the effort.

We've been discussing options to make this property more financial beneficial to all parties (e.g., my wife and I and my parents) and have been discussing a private loan wherein my parents would pay off the balance of the loan and then finance the property to my wife and I at a lower interest rate (4.75-5.25% for 20-30 years). My parents are approaching retirement age and this would set them up a secure source of recurring income and would set my wife and I up for stronger cash flow than we're getting now.

The current ownership is split about 40/60—this was how the down payment was split. So, I'm trying to figure out how the financing on this would work, because although there is only $190 on the loan, my parents are entitled to 60% of the total value of the sell price (appr. $210k).

Can anyone help me understand better how we would structure this arrangement? Would my parents pay off the $190k loan and we would open a private loan with them for $210k? Having a hard time wrapping my head around all the moving parts here.

Thanks so much!

Keep everything as it is and do a lease option from your parents to you for their portion. Then when they pass, if set up by an estate and tax guy, you inherit the property mostly tax free. Meanwhile, they get the cash flow you are mentioning. Check with your Real Estate CPA. Some CPAs won't understand how to do that. In fact, there are a couple of people who are very capable and investor oriented here on BP.

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Quote from @Stanley Yeldell:

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!

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Each deal requires a different approach. The trouble people get in to comes from not understanding real estate. Owning a hammer doesn't make you an electrician and that statement has nothing to do with rehabbing. By that I mean, a property that has two loans against it in a good area is different than one that is on a high equity mortgage in a bad area. Buying a property on the MLS by borrowing money to pay closing costs is almost as bad as it gets.

Just because someone is willing to do a SubTo (Subject To) (allow you to take over their financing) doesn't mean you should do that.

You treat a sandy area at the beach differently than a wet sandy area in the jungle. It may be quick sand.

1 Vote

Quote from @Heath D Wallace:

Quote from @Chris Seveney:

Quote from @Heath D Wallace:

I am almost at the finish line with the rehab part of my first BRRRR. I used a HELOC from my primary residence. The rehab started mid January. I would like to pay off the HELOC when I refinance. There is another great property which I would like to purchase as my families primary residence, to renovate and move into in a couple of years. How can creatively finance a down payment for this property. All ideas all welcome.

First off—congrats on getting to the finish line with your first BRRRR. That's a huge milestone, especially if you managed the rehab and leveraged a HELOC efficiently.

As for your next move: trying to acquire a future primary residence while you're still in the middle of refinancing can be tricky—but there are some paths worth exploring, if structured carefully and conservatively.

Here are a few creative, but grounded, ideas for the down payment:

1. Cross-collateralization (or a blanket loan):

If the equity in your BRRRR is strong post-refi, some portfolio lenders may allow you to use that equity as security toward the down payment on the new property—without needing to actually pull cash out.

2. Seller financing:

Not always available, but if the seller owns the home free and clear or is open to flexible terms, you could negotiate a small upfront payment and structure the rest as an interest-only note for a year or two. This buys you time to build equity elsewhere or increase reserves.

3. Private money/partnership equity:

If the new property is a solid long-term play, consider bringing in a partner for the initial down payment—especially if they’re looking for stable, passive exposure and you’re managing the asset. Offer a fixed return or equity share upon refi or sale.

4. Delay and build liquidity:

Sometimes the best move is not to stretch too thin. After you refinance and stabilize your BRRRR, use that cash flow and freed-up HELOC to position yourself stronger for the next opportunity. Deals will always come—but staying liquid gives you negotiating power.

Not a big fan of the "Creative push" out there right now as anything “creative” should still pencil out conservatively which is not being taught. Don't let the excitement of opportunity outpace your margin of safety.

So regarding the blanket loan you mentioned, I would need to refi my BRRRR property, pull out cash to buy the new property, correct?
I was told by a hard money lender that the amount was too small for my property.

Your comment "I was told by a hard money lender that the amount was too small for my property." There are many Hard Money Lenders. They do not follow a specific set of rules. Each has their own rules. So, check around.

I don't like "Cross-collateralization", that means if you fall behind, they put all properties under the Cross-collateralization into foreclosure and you could lose your home. It's not worth the risk in my opinion.

1 Vote

Roanoke, Virginia

Quote from @Rafael Trinidad:

Seeking advice purchase a two story condo from a wholesaler last year with my credit cards fixed the property up spending about 105k plus another 45k in labor and materials apply to refi and was told the condominium community had new Florida laws that required all condo are upto date before qualifying for a refi

Currently have it rented any option out there the credit cards were Intres free for a year now Intrest is like $2900 a month

Because of the Surfside Condo collapse a few years ago, condo buildings now, by law must have upgrades and increased reserves to deal with capital improvements in the future. If a condo association doesn't have or won't provide proof of compliance, lenders are shying away from lending on those buildings. Check with the head of the condo association to get a copy of compliance.

1 Vote

Orlando, Florida

Quote from @Dustin Stubbs:

I've been in contract for a foreclosure home on a lot for appx 18mo now. Closing has kept getting pushed back due to the bank foreclosing on the incorrect parcel. The foreclosed owner had 2 parcels. A vacant lot of appx 2 acres and an adjacent lot with a home and 2 acres. The bank mistakenly foreclosed on the vacant lot but likely because the parcel ID says "And or Except" which could have been misread.

The Listing agent advertised the 2 acres with the home. I won the bid but also felt confident the foreclosed owner had likely refi'd or combined both lots for property tax savings based on the property history i researched.

I've followed the foreclosure court docs and see where the bank filed an adjustment to the parcels in the foreclosure case. The adjustment request is to include "both parcels" (which i figured the bank intended to foreclose on both parcels).

I was just notified by my agent that the seller/agent is requesting to cancel the contract claiming they must re-foreclose. In fact, the Termination document they request I sign says that: "The Buyer hereby notifies the Seller that they wish to cancel due to seller title issues" thought I would post here first before reaching out to an attorney and see what the thoughts were.

I'm not clear what is happening here "I was just notified by my agent that the seller/agent is requesting to cancel the contract claiming they must re-foreclose."

The seller can sell and close until the time of the sale, even while a foreclosure is pending, being redone or being disputed. If you are in contract to buy the property for your use, and he wants to cancel because they have to go through the foreclosure process again, of course "No". He just has realized he can live there free for many more months and continue to work the system. So what. He chose to put it on the MLS, was satisfied with your offer, said "Yes", now he needs to honor that. When you buy his property, the lender gets paid off, which it is entitled to, and it cures the foreclosure.

0 Votes

Jacksonville, Florida

Quote from @Olivia Taitt:

Hi Everyone,

Looking for advice - pls on a potential SubTo deal where I would be the seller (think slow flip). Here is the background:

I have a 4 unit multifamily in the city that I am considering selling for the following reasons:

-Gut renovated 2 units; other 2 units have long term tenants and those units need gutted (old electrical and plumbing constantly giving me issues) + big ticket items coming due (furnaces, deck rebuilds). I don't have cash on hand to gut those 2 units.

-I moved away from the city so it's harder to manage (I self manage).

I have a 2.875% interest rate on it . P&I payment on it is $900, PITI is $1400/month, and rental income is $3300/month. It's worth $275-$300k and I owe $165k

I feel stuck because the interest rate is so great, but the headaches from the 2 non-renovated units are nonstop. Refinancing to pull money out would shoooooot up monthly payment; combined with the maintenance and utilities I pay, I would hardly cashflow.

SO - I have an offer from someone I know to buy it seller financed (subTo). Could I make this a slow flip/rent-to-own deal? THOUGHTS!? I feel like there has to be a way to continue making money on this deal without just classically selling it.

What would you do?

Additional Info:

-Units are 900 sq ft and older units would need bathrooms gutted, plater removed throughout for new electrical + plumbing. I can reuse kitchen. Building needs new furnaces + 2 new decks (5x8') as well.

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Potential SubTo Pitfalls

1. The bank can call the loan due (due on sale cause).

2. You need money to do a "no money down" Subject To. The seller needs moving money, there are oftentimes an arrears that has to be paid on the loan, there are oftentimes HOA fees that are due, there are title costs, there are escrow costs, usually there is deferred maintenance, you have to make mortgage payments out of pocket until you get a renter in there, you have to pay utilities and taxes, and you need reserves in case it all doesn't go as planned.

3. You can really mess up the seller's credit if you miss payments and they can then sue you.

4. If the seller files bankruptcy in the future you have to prove to the court that you bought the house fairly. That means you have to hire an attorney with uncertain outcomes.

5. If there is a fire and you haven't set up your insurance properly you could be in for a big surprise and not receive a payout.

6. A common source of Subject To deals is people in distress (foreclosure) who have a pending sale date. If you promise them a "rescue" and you don't get it done before the foreclosure sale they can sue you and the local authorities can investigate you.

7. In many jurisdictions (Washington, Oregon, California & others) it is unlawful to contact people in foreclosure unless you are an attorney or real estate agent or loan officer .

8. If you miss payments on the underlying loan you can go to jail after a very unpleasant investigation.

9. The seller can come back in a year or two and say the sale was unfair and they were taken advantage of and an attorney will believe them and sue you.

10. You can use a Quit Claim Deed and that can be rejected when you go to sell the property.

11. The seller can disappear from contact over time and not be available when you go to sell - you need their assistance oftentimes depending on the lender.

12. You can't contact the lender directly, they won't talk to you.

13. The payment can change and you won't be notified.

14. You can find out later that there was someone else on title that you weren't told about until you get sued.

15. You believed the "Subto community" and now you are in deep doo doo and in a world of hurt because of what they didn't tell you. The judge isn't interested in your "explanations" or finger pointing.

16. The "Subto community" is NOT a good source for learning how to solve the Due on Sale clause. The "guru" just had 10 Due on Sale called. They are factually, actually and legally just plain wrong on how to STOP Due on Sale. (Ask an attorney)

17. Paying for proper training, "one on one", with someone who has been doing this for many years, is the only answer to learning Subject To legally and safely. You can NOT learn this in a group setting. It's like learning to drill teeth by video.

18. Lawsuits begin years after taking over the property, they do not appear right away. They sneak up on you.

19. If you can't afford proper training, you can't afford to do Subject Tos.

20. Of course there are more Pitfalls. Did you think this was easy? ;-)

There are solutions for all of these. But it is not "no money" needed, should never be overleveraged and has serious consequences for those that are undercapitalized. If you don't understand that last sentence, do not even attempt it. But, help is available.

Copied from

https://www.biggerpockets.com/forums/311/topics/1184681-usin...

0 Votes

Quote from @Bill B.:

Did anyone go to jail or are you saying they stole $30M and had to payback $34M four years later? Like a 2% interest loan?

They said they were felonies, but they haven't said any one has been sentenced to jail.

https://legalnewsline.com/stories/671358349-court-orders-ove...

Looks like the sentence was Probation

4/30/2025SOP - Sentencing Order - Probation 4/30/2025

Looks like there were 27 defendants, but they don't specify the individual outcomes

"The Court has considered the evidence which includes the testimony of witnesses, the
demeanor of the witnesses, the credibility of testimony, and exhibits admitted, as well as the
parties’ arguments, and finds that Defendant L&L Investments, LLC is liable for restitution to
the Arizona Health Care Cost Containment System (“AHCCCS”) in the amount of
$30,236,207.52. Accordingly,

IT IS ORDERED Defendant pay restitution to AHCCCS in the amount of
$30,236,207.52 in the matter of State v. L&L Investments, LLC, CR2021-002107-017 (Ariz.
Super., Maricopa County)."

1 Vote

A company is having to pay more than $34 million for its role in scamming the state’s Medicaid system through fake sober living homes in part of the biggest fraud in Arizona history.

The Maricopa County Superior Court ordered on Monday that L & L Investments, LLC to give $30.2 million in restitution to the Arizona Health Care Cost Containment System (AHCCCS), in addition to its $4 million in fines.

L & L Investments was indicted in 2021 and in May 2024, a jury found the company guilty of multiple felony charges, including conspiracy, illegal control of an enterprise, theft and fraudulent schemes and artifices. At August 2024 sentencing, the company was fined $4 million and sentenced to seven years probation,

but the restitution decision was delayed until this Monday.

According to a class action lawsuit filed against the Arizona government in December, the state knew about the scam as early as 2019 but didn’t go public until May of 2023.

************************

That means they didn't bring charges for several years after the scam was discovered. The "Investors" didn't know they were being investigated. All looked fine.

Take Note you Wholesalers and SubTo-ers, you are on the hook for your actions for YEARS if you don't follow the law.

What? Your "guru" on Youtube or Facebook said it was okay to do "put your favorite technique here". Hmmm, better check that detail with an attorney. Tell him you "are asking for a friend".

2 Votes

Quote from @Sam Sharma:

Hi there everyone!

Are there specific major cons if I have a property and want to sell it based on rent-to-own?

Only thing I'm worrying is in the event the tenant stops paying and I have to evict them, does the court make me return their deposit and the payments they've made?

Because I believe the eviction process is different for typical tenant vs rent to own tenant.

Any thing else to be prepared for that you have seen from experience?

Thank you very much!

Sam

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It depends on the state the property is in and what you include in the agreement. This is one where, as already advised above, have an attorney put the paperwork together.

0 Votes

All Forum Posts by: Ken M.

Ken M. has started 66 posts and replied 891 times.

Post: Paying for mentorship

Post: Options to Buy Out Co-Owners with Private Financing

Post: Creative Financing Strategies – What’s Worked for You?

Post: Looking for some creative financing advice

Post: How to finance a Florida Condo ?

Post: Foreclosure bank cancelling contract saying they must now re-foreclose?

Post: Selling as SubTo - PICK ME APART

Post: Sober Living Investor Gets $34,000,000 Fine - That'll Hit the Bottom Line, Ouch!

Post: Sober Living Investor Gets $34,000,000 Fine - That'll Hit the Bottom Line, Ouch!

Post: Rent to Own Eviction Question