All Forum Posts by: Zach Howard

I don't really have much to add to the discussion other than to say make sure the property you're interested in buying works both as a STR and a LTR. So if, for whatever reason, laws change and you can't rent it out on Airbnb, etc, it still cash flows if you need to rent it out to a traditional long-term tenant.

Best of luck to you.

1 Vote

Fort Lauderdale, Florida

Quote from @Drew Sygit:

@Zach Howard the winter months are also the worst time to sell a property!

So, yes, it can be the best time to buy as the sellers listing during the winter are often the most motivated.

Great, thanks that's kind of what I was thinking.

0 Votes

Detroit, Michigan

Quote from @Doug Smith:

Technically, Sub-To is legal, but the way some "gurus" teach it, I have problems with it. The Due On Sale clause was added I think in the 1980s because of "sub-to" deals. Sub-to has been around for a very long time. In many cases, it weakens the lender's position as they did not underwrite the buyer and an owner-occupant tends to pay better than non-owner-occupants. Some gurus tell practicioners of sub-to to hide transaction from the lender by saying the lender doesn't care as long as the payments are being made. That's simply not true. For instance, I served as an expert witness in a case where a property was transferred to a new owner sub-to. The new owner did not make the mortgage payments and the seller had no idea until they were served foreclosure paperwork. The seller had a military contractor job with security clearance. The trashing of his credit threatened his job. Most seller's in a sub-to don't understand the risk they are taking and most lenders have concerns over the overall portfolio quality ratings which has an impact on their cost of funds. Sub to us a bigger deal than most people realize. It's not illegal provided you're dislosing it to all parties and not trying to actively hid it. Now, getting around the Due on Sale might be as easy as doing a Contract for Deed or a Purchase Option instead of Sub-to. In those instances, the title doesn't change hands, thus, the Due on Sale isn't triggered. I hope that helps. Good luck in your investment journey.

"Some gurus tell practicioners of sub-to to hide transaction from the lender by saying the lender doesn't care as long as the payments are being made. That's simply not true. .... The new owner did not make the mortgage payments"

I'm curious if I am misreading or missing some information, but I fail to see how your example supports what I take to be your stance. On one hand, you said gurus are claiming the lender doesn't care as long as the payments are being made, but on the other hand, in your example, the payments were not being made. To support your point, wouldn't it make more sense to cite an example in which the payments were being made, but the lender still called the loan?

Just to be crystal clear - I mean absolutely no disrespect. I am only curious and trying to educate myself on sub to as it seems rather attractive to me as a non-US buyer who has access to emergency lines of credit, albeit, maybe limited to 200k. I'm going through old threads and trying to connect with people who seem to know what they're talking about, and asking clarifying questions when something doesn't make sense to me.

1 Vote

A side question - if this time, November to January, is the worst time to find a tenant, does it somewhat logically follow that it's also the best time to buy?

0 Votes

Detroit, Michigan

I haven't done any research on Jacksonville, or anywhere in Florida for that matter. So not currently on my radar in terms of places to invest. Haha, doesn't mean I can't be convinced to head in that direction though.

0 Votes

I'm also not in the US, and still researching to see exactly when and how to actually start. Goal is to have purchased one property by the end of 2025, s still have quite some time to get that done.

Why Jacksonville, are you originally from there? Lived there, or...?

I think it might be wise to get a partner for your first deal.

Best of luck to you.

0 Votes

I think it's probably better to hold real estate in an LLC than in my personal name. Reason being is that I'm not a US citizen and I do not live in the US.

I have so many questions though.

1) Can anyone tell me more about series LLC and whether it's necessary to hold each property in a separate LLC

2) What are your thoughts on a trust, rather than an LLC - advantages, disadvantages etc?

3) Any specific states you recommend to set up any of these (Not sure where I'll be purchasing property yet, maybe Detroit, maybe Cleavland, maybe Augusta, maybe Des Moines, maybe Saint Cloud, maybe Memphis...)

4) I already have a LLC based in Hong Kong (We call them limited companies, but the principle is the same). Can I use this to purchase and hold US-based real estate?

Any other advice, or pieces that you think I'm missing - I'd be grateful for any and all wisdom that is shared with me.

Thanks.

0 Votes

I'd like to take a deeper dive into subject to, wraps and other related things to educate myself and see whether some of these might be things I can actually utilize in my real estate journey.

Please recommend any books, or other learning resources on these subjects.

Thank you.

0 Votes

Quote from @V.G Jason:

Quote from @Zach Howard:

Quote from @V.G Jason:

Quote from @Zach Howard:

@V.G Jason

To someone just starting out (only option of OOS) who can get access to 200k, but no additional financing at this time but an additional 50-100k max in reserve cash, where might you recommend they start - markets/property type/strategy?

$200k in financing, or $200k in cash and looking to leverage from there?

$ 200k in financing that is paid off from my "W2" in equal monthly payments for the next 5 years. Covering this with my salary is relatively comfortable.

I am not sure I would dab into real estate if I need to make the turn in 5 years.

The $200k financing would serve as a purpose to be a downpayment, or do you want the $200k to be the top limit of the investment? If the latter, I would find 1 distressed property in a good-very good area and fix it up. This would require you to visit, not necessarily live in that same city. OOS BRRRs are the devil's juice on this forum, but if you set yourself up properly with contracts, etc., you will come out on top just take a bit longer so you need to underwrite that in mind.

If the former, I would do a combination of fixed income, private lending, and note buying and trade the arb. Collect the difference.

Currently I think 200k being the upper limit of investment makes the most sense and is within my risk tolerance range. What I'm hoping is to value add and refinance a bit later if/when rates go down. Then rinse and repeat.

0 Votes

All Forum Posts by: Zach Howard

Zach Howard has started 12 posts and replied 115 times.

Post: Subto FHA problem

Post: Seeking Advice: Raising $160K for a Second Short-Term Rental Investment in FL

Post: How long should I give my PM to Rent a Unit before changing PM?

Post: Is Subto legal?

Post: How long should I give my PM to Rent a Unit before changing PM?

Post: A new flipper in town 🐬

Post: A new flipper in town 🐬

Post: LLC - many questions, please help!

Post: Where and how can I learn in depth about subject to, wraps etc without the fluff etc?

Post: Scaling out of state while busy working my W-2