All Forum Posts by: Guy Gimenez

Heard about this on Pace Morby's Youtube channel - it's a zero down creative strategy that works when 1) the seller is open to seller finance, but 2) needs a sizeable DP for various reasons (i.e., pay off their existing loan, closing costs, and/ or put some cash in their pocket, etc)

There are 2 "legs" of the transaction. My understanding is it works like this:

Example: purchase price = $1M, seller still owes $200K, seller also needs addl $150K cash at close for whatever reason. But the buyer wants the property at zero down.

First leg:

-- Buyer secures a loan (1st position) for $350K and sends to title company (this is the amount needed to pay off sellers loan + their required cash at close)

-- Buyer also sends $650K cash to the title company (can put in your own cash, or do a temp loan from a transactional lender)

-- First leg of txn is now complete, and the $1M stays at the title company (this is bc you customized escrow instructions upfront to instruct them how to disperse money before escrow began)

Second leg:

-- Buyer and Seller enter into an agreement through an LLC which allows them both to be on title, and seller agrees to seller finance the buyer $650K of the purchase price (on whatever terms they agreed on). Being on title protects the seller from the buyer defaulting - it seems this is an alternative to "officially" putting them in a 2nd position)

-- Title company sends seller the $350K they require

-- Title company sends buyer back $650K (which they can use to pay off their transactional lender if they used one)

So now the seller is happy bc they got the $350K they needed, the buyer is happy bc they acquired a property for zero dollars out-of-pocket, and from what I understand the 1st position lender is happy bc due the LLC arrangement the seller finance component is not technically considered a second lien on the property. Plus all parties were protected throughout the entire transaction through the title company.

Have any of you completed a deal w/ this method? Am I understanding this right? I would love to hear your thoughts on the pros/ cons/ risks involved

Your comment: "Buyer and Seller enter into an agreement through an LLC which allows them both to be on title"

Your comment: "Being on title protects the seller from the buyer defaulting"

That isn't how things work. The buyer can still default.

Wow, that's one of the riskiest transactions I've ever heard of. Having someone on title with you that you don't know, as a "business partner" puts you in lawsuit risk for anything they do. Nope, wouldn't do it, "wouldn't be prudent" as George Bush Sr used to say.

WHOA! "due the LLC arrangement the seller finance component is not technically considered a second lien on the property."

Either you misunderstood what was said, or you are extremely likely to get yourself into all kinds of grief following that line of thinking.

No No NO! It's not "risky" as most on this thread make it sound.

It's not a "risky business" opportunity because the "LLC" must only be created for that transaction ONLY (w/ a partnership agreement with the seller). NO OTHER BUSINESS practices should be conducted by either party except for that property only. You rather have an LLC agreement in which the seller holds the guarantor of the LLC (of which is the buyer) of the transaction.

I don't even know where to begin with this. Just wow. I especially love the "It's not risky" part.

1 Vote

Quote from @Andrew McGuire:

Quote from @Guy Gimenez:

The "old way" (fundamentals) never go out of style. It's like saying buying at retail and trying to sell at high, high retail is a good idea because the old way is no longer applicable. I'm not trying to be argumentative...I've just seen many Andrews in my time who think they can use creativity to overcome the the basics (fundamentals). The horror stories are many but it's best to allow someone to get spanked financially because they learn better from their mistakes than from the mistakes of others.

There were a lot of retail stores that thought that was fundamental until Amazon came and wiped them out as well.

Actually, those businesses that disregarded the fundamentals, including the need to adapt to changing market demands and technology advances, are the businesses that failed. With no disrepect meant, it's clear you believe you're smarter than the generations of investors before you and you have figured out the secret sauce to buying at retail, having little cash flow, but still making it a great real estate deal. I wish you much luck Sir.

1 Vote

The housing market in Corpus has cooled since last year when interest rates spiked. Add into the equation the cost of materials and it makes sense that builders are finding ways to cut overall build costs and one of those ways is to buy land cheaper.

1 Vote

5 Votes

Most everyone is excited about investing...until the realities hit them squarely in the face. I've seen this kind of stuff posted for more than two decades and still can't believe that folks think it's a good idea. I truly hope it works out for you. I am all but certain it won't. Way too many red flags that "excitement" won't fix.

2 Votes

Quote from @David Nolan:

Quote from @Guy Gimenez:

Quote from @David Nolan:

Hey Chris,

I am a student of Ryan Kuhlman's. I signed up for his Flip Coach program a few years ago. I first took a National Mentor program, Clever Investor, and it was horrible! They assigned some so called mentor to me out of Tampa. They were not even in my market. I spent a good amount of money and never got a single deal. It was a complete waste of my time. I came across The Flip Coach from a National REIA webinar when Ryan Kuhlman was President of NREIA. After speaking to Ryan and speaking to a couple of successful students of his, I joined his program. Best thing that ever happened to my Real Estate investing career!! The Flip Coach program has the A to Z of information, but more importantly Ryan really motivated me and made sure I understood the actionable steps I needed to take. He got me over my procrastination and fears! Now I do 15-20 Wholesale deals per year and last year did my first two fix and flips. I know a lot of people think they can watch YouTube videos, spend time with Real Estate professionals and network, and they can get started investing in Real Estate. But I know a lot of people who tried on their own like this and have failed and are still failing. I made back my investment in the Flip Coach program 10 times over! I highly suggest you check it out. Hope this helps.

HUGE. RED. FLAG. If you give any credence to this type of response, you're in for a long painful real estate investing experience.

Nothing painful about my investing experience Guy. Not sure why so negative unless maybe you had a bad experience yourself. Yes, there are a lot of so called "gurus" that are total crap. But when someone throws this kind of shade is usually something personal. Of course I support my mentor because he is a big part of my success. But I dont need to convince you or anyone else of anything. I came here in support of my mentor. Thats it.

I don't know your "mentor" so it's not personal. My comments are simply based on experience and common sense.

0 Votes

Fort Lauderdale, Florida

Quote from @Ryan Kuhlman:

Quote from @Guy Gimenez:

Quote from @David Nolan:

Hey Chris,

HUGE. RED. FLAG. If you give any credence to this type of response, you're in for a long painful real estate investing experience.

Hey Guy. You must not have read any of my responses nor simply looked me up online. I have had one of the most successful mentor programs for many years. I did take a few years off since COVID, but I can tell you David and all of the others on this thread are very real, and are doing very well in real estate. I have probably 10 other students that failed at Clever Investor program like David. Its not a HUGE RED FLAG when someone tells you about their experience. I am not saying all of my students have been as successful as he has, but I can tell you that when my students talk about me they really advocate for me and my program. Sorry you have a problem with that, but you should do your research before blasting people that you dont even know.

Well, if you say he is successful than he must be, right? I'm not blasting you...it appears you've done that to yourself. I could care less about your self congratulatory commentary. I've seen plenty of you in my 24 years of investing and many of those had skeletons in the closet. So please spare me the "I'm legitimate" routine. When a "successful investor" joins BP, or any other page for the SOLE purpose of promoting a guru, it's a red flag. That is a fact. You may carry on now. Thank you.

1 Vote

Fort Lauderdale, Florida

Quote from @David Nolan:

Hey Chris,

HUGE. RED. FLAG. If you give any credence to this type of response, you're in for a long painful real estate investing experience.

3 Votes

Fort Lauderdale, Florida

Quote from @Brian Kempler:

A 2nd lawyer told me more than 6 months CFDs are illegal :/ We'll switch to buying and selling LLC interest

Would love to see the statute stating such. Granted, I don't know any attorneys here in Texas who would assist in a CFD but that's just because it's common sense to steer clear of these beasts.

0 Votes

Quote from @Chris Seveney:

Quote from @Guy Gimenez:

Are CFD's legal in Texas? Yes. Would I EVER do one as a seller? Absolutely not. The statutory burdens on the seller are extreme and can be financially devastating if a mistake is made. Would I consider purchasing via CFD? Still no, the pitfalls can be numerous and there is no upside that I can find. There are too many better creative options than to consider a CFD.

As I mentioned above, I never understood CFD's in non-judicial states, they make sense in places like Indiana, Ohio and some places in the midwest but in the south, they are essentially useless. I see people doing them in florida, then realize they still have to do a complete foreclosure and get upset about it because they followed some guru or bad advice here on BP.

Yep, gurus pretending they understand the statutes of all 50 states is what is causing this nonsense. Too many new investors are baited into the "you can do this anywhere" sales pitch. Same with quit claims here in Texas.

0 Votes

All Forum Posts by: Guy Gimenez

Guy Gimenez has started 48 posts and replied 1999 times.

Post: Anyone done a "Morby Method" deal? Zero down creative strategy

Post: I'm Buying Negative Equity Properties and I'm Excited About It

Post: Texas Land Portfolio

Post: I'm Buying Negative Equity Properties and I'm Excited About It

Post: I'm Buying Negative Equity Properties and I'm Excited About It

Post: Is Flip Coach by Ryan Kuhlman Any Good?

Post: Is Flip Coach by Ryan Kuhlman Any Good?

Post: Is Flip Coach by Ryan Kuhlman Any Good?

Post: 30 year contract for deeds illegal in Texas?

Post: 30 year contract for deeds illegal in Texas?