Breaking Down Creative Finance for Sellers

Рет қаралды 24,167

Күн бұрын

Why would I sell on creative finance? How do I protect myself as the seller in a creative finance transaction?
Pace Morby answers these questions and more as he deep dives into creative finance from a seller’s perspective, including what questions to ask and why a seller would consider going the creative route. He helps explain by referencing specific deals he bought with seller finance and subject to. There are numerous benefits for both buyers and sellers when using creative finance vs selling/buying the traditional way, and Pace will break it all down for you.
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• Know THIS Before Selli...
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Chapters:
0:00 - Intro
1:15 - Why would a seller sell on creative finance?
13:09 - Selling subject to
20:39 - Questions seller should ask
24:54 - Who is the buyer usually?
29:31 - What is the buyer wanting to do with property?
33:07 - Does title/closing attorney know what they’re doing?
36:18 - Does my real estate agent know what they’re doing?
42:28 - How does the money actually get paid to my bank?
44:49 - What are terms?
48:46 - Debt-to-income ratio
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⚠️ #CreativeFinance #Investing #Wealth #RealEstateInvesting #Wholesaling #SubjectTo #HowToGetStartedInRealEstate ⚠️
🚧🚧🚧 DISCLAIMER 🚧🚧🚧
❎ I am not a CPA, attorney, insurance, contractor, lender, or financial advisor. The content in these videos shall not be construed as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other and may be outdated or inaccurate; it is your responsibility to verify all information yourself. This is a KZfaq video for entertainment purposes ONLY ❎

Пікірлер: 158

@PaceMorby 6 ай бұрын

Gosh.... When I was brand new to real estate, if someone would have taught this exact video to me, it would have accelerated my growth by 5 years. Its insane how little people understand about this topic that only highly experienced people know and keep to themselves to keep the competition low.

@JohnnyRamirez-zk6zj 6 ай бұрын

This all sounds really good and makes total sense, but where do I find contracts for this?

@EddyCharger 6 ай бұрын

This was incredible Pace!! Thank you.

@PaceMorby 6 ай бұрын

I only give contract to my SubTO Community for these. @@JohnnyRamirez-zk6zj

@rogerroyal1758 6 ай бұрын

Pace, What about a due on clause if you're doing a sub to?

@PaceMorby 6 ай бұрын

I have a whole playlist on that called Due On Sale kzfaq.info/get/bejne/iMCgfrmi1ru-gIU.html

@degerrian 6 ай бұрын

This is possibly your best video....I'm sending this to all my sellers

@PaceMorby 6 ай бұрын

Thank you!

@FreedomVibesWithAlma 6 ай бұрын

I greatly appreciate how you slowly and clearly explained and gave real examples. GOAT TEACHER ❤❤❤

@PaceMorby 6 ай бұрын

THANK YOU. It means a lot to me. For a channel that is not trying to take advantage of people with clickbait and actually help people, it really does mean a lot.

@semay2 2 ай бұрын

This video answered all my questions. The funny part is every time I watch this video over again, a whole new set of questions get answered. Call me weird. I can’t thank you enough for making it clear and easy to understand !!! Thank you so much.

@PaceMorby 2 ай бұрын

Glad it was helpful!

@MikeLynch361 6 ай бұрын

This video feels like "A fire side chat, with Pace Morby" and I love it! THANK YOU Pace and crew!! ✌️family...you know what to do... ❤

@PaceMorby 6 ай бұрын

THANK YOU

@gabatsns-creative 6 ай бұрын

Pace I have been waiting with baited breath for just sucha video series and here it is...! Breaking it down into chapters so to speak makes it so much easier to get it straight in my mind and to transfer it to the seller. Also having this kind of tool to just let the buyer watch if they so choose or give to a realtor is UNBELIEVABLY helpful! Wow what a resource!!

@PaceMorby 6 ай бұрын

Thank you sir!!! Really means a lot that you took the time to comment on this.

@GaryRabatin 6 ай бұрын

Pace, don’t apologize in advance for your greatness. The free beans 🫘 you drop is priceless.

@PaceMorby 6 ай бұрын

THANK YOU SIR!!!

@aristidejoel 3 күн бұрын

This is amazing! I’m definitely sending this to sellers! Thank you Pace and team!

@PaceMorby 2 күн бұрын

Glad you found it valuable

@imeldainterino7747 5 ай бұрын

Lol 🎉 you hit the point Pace - seller net sheet and im glad as a listing agent for many years I do explain it to my clients before listing. I lose some of them whose not willing to pay on closing. Later, i pivot to explaining about subto deals. Great video, thanks!

@nelsonearnshaw4961 6 ай бұрын

Professor Pace back at it again. Wow! This is true genius laid out so everyone can see the value of thinking outside of the box. Thank you for continuing to expand the greater market with such value!

@PaceMorby 6 ай бұрын

Wow thank you! 🙏🏽 Glad you enjoyed the video

@TyronJonesTJ 6 ай бұрын

Absolutely loved this video!! So many questions I had were answered. Thank you Pace!

@PaceMorby 6 ай бұрын

THANK YOU Tyron!

@RJ4Loans 6 ай бұрын

Thank you Pace. Once again, you are bringing huge value. Thanks for all that you do.

@PaceMorby 6 ай бұрын

Thank you sir!

@erickacameroncarr 6 ай бұрын

Sooooo much value in this video Pace! Thank you isn't enough dude. 😩 I'm getting my ducks in a row to join the mentorship. There's no other way, you're the best!

@PaceMorby 6 ай бұрын

THANK YOU SO MUCH ERICKA

@jennychedda 6 ай бұрын

This is so helpful, I am actually in this situation and needed this. Thank you Pace.

@PaceMorby 6 ай бұрын

So glad I could help out!

@landrichplus 6 ай бұрын

Thanks Pace and community appreciate what i am learning from you

@PaceMorby 6 ай бұрын

YESSSSSS thats what its all about!

@shellyjebavy8534 6 ай бұрын

Love the tone of your delivery. Different than several I’ve watched. I totally see how a seller could actually owe money at closing. Houses took a run in value over the last couple of years. So any house bought with that little of equity isn’t going to have a desirable interest rate is it? I want so badly to buy a house using creative finance but can’t find any that fit the parameters of a good deal

@paparuda1968 6 ай бұрын

Great presentation! Timely for my meeting today with a agent to present my first SubTo! Thank you Pace and your Team!

@PaceMorby 6 ай бұрын

Let's gooo! Good luck

@LeonardLay 6 ай бұрын

This was great thanks so much. It answered all my questions that I was having

@PaceMorby 6 ай бұрын

THank you brother

@khadijahskreations 2 ай бұрын

I've never ever followed a real estate person this long. You have an awesome way of teaching that makes me wanna learn more,I definitely appreciate you for how you explain it,you help me understand more and more the more I watch your videos ❤❤❤keep up the great work 👍

@PaceMorby 2 ай бұрын

I appreciate that!

@curlieQlocks 6 ай бұрын

Great video Pace! I’ve watched plenty of your videos, now I can with confidence and explain the process to a seller! Your best ✌🏾😊

@PaceMorby 6 ай бұрын

Love it✌🏽

@julietruong.invests 6 ай бұрын

I love this so much. Thanks Pace for breaking this down to the T!

@PaceMorby 6 ай бұрын

Thank you! Glad you enjoyed the video 🙌🏽

@sharonsanita5840 6 ай бұрын

This is an excellent video on creative finance. Pace is an amazing teacher.

@PaceMorby 6 ай бұрын

Truly appreciate that. THANK YOU

@chainsawerekson2972 6 ай бұрын

Soo good. Great show. Thanks again.

@PaceMorby 6 ай бұрын

Thank you!

@AlyiaLebrie 6 ай бұрын

Sooo much value in this video! Love it🔥🔥🔥

@PaceMorby 6 ай бұрын

Thank you Alyia! Glad you enjoyed

@briantruth2113 6 ай бұрын

Excellent video to introduce to, and Educate sellers about Seller Financing

@PaceMorby 6 ай бұрын

Thank you Brian! Glad you enjoyed

@MahbuburRahman-fe3pt Ай бұрын

THANKS FOR THE EDUCATION MY BROTHER :)

@Davejr967 6 ай бұрын

Excellent video Pace!! Thank you!!

@PaceMorby 6 ай бұрын

WOW thank you!

@israelgonzalezp.6898 5 ай бұрын

Great work. Very useful information and motivating at the same time to see what is possible. Thank you.

@PaceMorby 5 ай бұрын

Thank you! Glad you enjoyed the video

@pavankumarsrpk 3 ай бұрын

Thank you for the video. Learnt more on creative financing.

@PaceMorby 3 ай бұрын

Wonderful!

@jorgevelasquez9955 5 күн бұрын

FANTASTIC PACE! First time I have run into your videos. I want to sell my rental property to my current renters being the bank. Can you do more videos advising sellers how to make sure you are protected.

@ghca-mo7xb Ай бұрын

Pace you are priceless . Thanks for sharing this knowledge

@PaceMorby Ай бұрын

Thank you for saying that, I'm glad you're getting value from this

@EntenzaMusicINC 6 ай бұрын

Wow, what a great video. It got me wondering if I should sell one of my properties with creative finance. Thanks

@jlubejesse 6 ай бұрын

You are a true pioneer of the modern real estate transaction Thank You

@PaceMorby 6 ай бұрын

THANK YOU SO MUCH!

@TheRealEstateDeli 6 ай бұрын

So informative step by step explanation, nobody does it better than you , I mean nobody see ya @ April summit ❤️🙏🏼🐊

@PaceMorby 6 ай бұрын

THANK YOU!!!

@infiniterealestatecorp.9264 3 ай бұрын

thank you Pace.

@PaceMorby 3 ай бұрын

No, thank you!

@tanjamarkovic4264 5 ай бұрын

So amazing!!!

@PaceMorby 5 ай бұрын

Thank you!

@JoseCruz-ys7ce 3 ай бұрын

Pace thank you God bless you

@_aspenjay 2 ай бұрын

Just bought your book a few days ago and I'm loving it! Thanks for sharing all of your knowledge Pace! I'm interested in your DTI video you referenced in this video, could I get a link to that please?

@PaceMorby 2 ай бұрын

Awesome! Thank you! This might be the video: kzfaq.info/get/bejne/eZtnh86UnbKupY0.html

@stellaikeadighi2423 4 ай бұрын

Hey Mr. Pace you just awesome, l love your way of helping because you are not like others, thank you very much, Stella from Subto community. 🎉🎉🎉🎉🎉🎉🎉🎉❤

@PaceMorby 4 ай бұрын

Stella!!! Thank you for being here

@curlieQlocks 6 ай бұрын

Your escrow explanation is on point💯😊

@PaceMorby 6 ай бұрын

Thank you bro!

@bowmadness1333 2 ай бұрын

Jesus that was absolutely an enlightening education. Thank you!

@PaceMorby 2 ай бұрын

Glad you got some value from this

@Lanainvestor 2 ай бұрын

.I'm sending this to all my sellers

@matchbox3eb 4 ай бұрын

😂 Harry Marsh has done some of my closings! Great office they have, closed in days! Great video here

@Edvardlarose 6 ай бұрын

This is a great video. From beginning to end breaking down the whole process. Subto is the greatest ✌🏾🐊. I’m a Subto and gator would love to squad up

@PaceMorby 6 ай бұрын

THE GREATEST!!!!

@robinhurtjourney 6 ай бұрын

So many can benefit from the instruction provided here.. If you are uncomfortable doing a deal with creative financing. Ask for help.. Subto student can help you 😊

@PaceMorby 6 ай бұрын

Thank you Robin!

@crazykevin4388 6 ай бұрын

Do you have a video for a buyer to make a purchase? What are steps? This will be my first one doing this. Thanks

@familychannell2210 Ай бұрын

Where is the loan officer video you talk about at the end of the video regarding DTI please?

@justingtejeda 6 ай бұрын

Hey Pace, need some help with a Sub2 issue I’ve been facing recently. I’ve done about 5 Sub2 but the last two I have worked on structuring fell through. Both sellers had an fha loan and wanted to sell and move into a bigger more expensive home using another fha loan or a special builder loan program. The problem came down to the loan officer who did not approve of the transaction. This was due to the debt to income ratio. I tried to also take the angle of “leasing the property” as well as explaining that we would be using a third party servicer to conduct payments. Neither would suffice and I’m not sure how else to get past these loan officers. Any advice or suggestions would be appreciated.

@dueceduece6042 3 ай бұрын

I have a heloc on top of the mortgage, how does that work for a seller?

@Selfworth25 6 ай бұрын

Hey Pace one question what if the property has no mortgage but a lien how would I go about this ?

@MortgageNerdPS 3 ай бұрын

Pace, where is the link to the DTI video you spoke of? Thanks

@PaceMorby 3 ай бұрын

kzfaq.info/get/bejne/md9yhZaZzduwn3k.htmlfeature=shared

@joset4187 4 ай бұрын

I have a seller who wants top dollar on an acre and half zoned for commercial or residential use-small house on property is dated-asking price is more inline with homes in area of 3k sqft. Is it possible to do owner finance and build multi family homes on property? Can a owner finance deal be assigned in this situation?

@joset4187 4 ай бұрын

Would it make sense to do subto on a sfh that needs major work-possibly a gut job?

@PaceMorby 3 ай бұрын

Yes!!!

@priscilla_mscardenas 6 ай бұрын

Great video! A ton to unpack. Hope to sell current property Subject2 but is that possibly against the terms in my current mortgage loan?? 42:15

@noahhaener1520 6 ай бұрын

We’ll buy it

@joelgoble9544 Ай бұрын

Will you buy mine??? Market value 600,000 I want 20% down can go with a lower market interest rate sitting at 4% or sell at market rate 8% with a discounted home price around 50,000. 5 year balloon to get paid out at full price or interest will go to 15%.

@nisupply 5 ай бұрын

Are Promissory Notes sent to credit bureaus? Figure that they are. Who is the best company to oversee them?

@jimpeddie5478 Ай бұрын

How do I join your community

@-LUQUIN- 6 ай бұрын

... Question, is the "escrow officer' same like a "transaction coordinator"? Or they do a different tasks.?

@PaceMorby 6 ай бұрын

No. Escrow officers work for the title company and handle HUNDREDS of deals from all different people/businesses/investors. They simply collect all the signatures and money. Transaction Coordinators work with all parties involved to ensure the deal moves along. Did the paperwork get signed? Was EMD delivered? Where are we at with title insurance? Are we covered in all areas if the inspection falls through.--these sorts of things

@MgtowRubicon 6 ай бұрын

I had to "remind" a real estate broker that refused to submit my creative financing offer (10% above asking) that he is required by state and federal law to submit all offers or he could face legal action. If I directly contact the owner, then he would not be the procuring cause (no commission fee). I am being disrespectful only when they are disrespecting me.

@TheDankrista 6 ай бұрын

What’s it look like to do owner finance when you want to 1031 exchange? I have a commercial listing in CA for 9.75M. Owner owes 2.5 at 4%. I want them to offer sub2 with a wrap but they want to exchange into a property out of state.

@PaceMorby 6 ай бұрын

Easy. You just got to get the correct exchange agent managing it. Most 1031 exchange people are not educated on it.

@videomax702 6 ай бұрын

Do you have a 1031 exchange agent that you would recommend for these types of transactions? -Max Ellis

@PaceMorby 6 ай бұрын

Yes but I only share that person with my students so he doesnt get overwhelmed. @@videomax702

@user-ls2wg9lj2j 5 ай бұрын

What about tax increase once sale is closed. County will soon increase tax rate on house

@Tamara61622 6 ай бұрын

What happens when the buyer wants to sell at a later date. How is my seller protected. If they sell, do they pay off the mortage?

@hollysosnowski5975 6 ай бұрын

My realtor has offered me sub to properties. How does wotking with an agent hurt me financially?

@PaceMorby 6 ай бұрын

You're working with a unicorn agent

@melvinservivvfccvvfes1583 6 ай бұрын

How does the broker/realtor get paid on a seller financing deal?

@PaceMorby 6 ай бұрын

They get paid. Check out this KZfaq video: kzfaq.info/get/bejne/nJiPosiUxKzGYnk.html

@MrUKanat 4 ай бұрын

I admit i dont get many things. For starters, if seller has like 20% paid for the mortgage. Why would they transfer deed to you guys without making back these 20%?

@joelgoble9544 Ай бұрын

I would want to service my own loan in hopes that the buyer pays me a large down payment and a couple years of monthly payments more than I could get from renting. I would be trying to get more money than I could from renting less responsibility and I would be hoping that the buyer defaults so I could do all of this and still on the property. It would be like renting out my house, but the return would be larger and I wouldn’t have to worry about any repairs or any property management headaches at all. Best case scenario They fail to hold up their obligation . I get the house back in better condition and at a higher value then I originally sold it at. In all honesty it seems like predatory lending.

@Elbos86 6 ай бұрын

Can a seller finance when he has a dedt on the property?

@PaceMorby 6 ай бұрын

Of course. Thats called SubTo!

@MgtowRubicon 6 ай бұрын

Buying real estate or businesses with all-cash delivered at close of escrow will fade for the next several years as creative financing solves huge problems for sellers, buyers, and brokers.

@PaceMorby 6 ай бұрын

YES SIR

@seminole2001 25 күн бұрын

What is stopping say Wells Fargo calling the loan due because you’ve triggered the due on sale clause? If I’m Wells and I want that loan off my books so I can sell you a loan at the current market rate, even though the current loan is performing. What happens then? Are you gonna give the house back to the seller? Now multiply that by how many loans you have at Wells Fargo. They could turn out your lights tomorrow if they wanted to.

@PaceMorby 24 күн бұрын

Check out this playlist kzfaq.info/sun/PL2Y6uEs9DYr1im5O5e8Q5QyOm_5UusFO7&si=W0L_9M6uI25zIpiP

@JohnnyRamirez-zk6zj 6 ай бұрын

What happens if the seller files for bankruptcy after you SubTo their property?

@PaceMorby 6 ай бұрын

They dont own the property any more brother!

@irinabennett7254 6 ай бұрын

Our closing attorney saying you are practicing Real Estate without license when you do Subject To... you said you will post your email so we can request your proof that this activity is legal. Thank you

@PaceMorby 6 ай бұрын

Tell your attorney to email me pacejmorby@me.com

@mike2959 6 ай бұрын

I have not seen or heard the end game. In this example. He pays 5 million to Eric . But did he? No. He is kicking the can down the road. At the 10y balloon What happens? Walk us through that scenario. You have to either pay Eric off with cash or go to the bank, get an appraisal and get financed. I’m now wondering. Is this Rent A Center? It’s the exact same business model.

@PaceMorby 6 ай бұрын

Great question Mike! We will possibly refinance and pull cash out tax free. You cant do that at rentacenter. In your comment, comparing this to a rentacenter... you just dont get the same benefits. When Im renting a property, I dont get tax benefits, I dont get appreciation, and more importantly I dont get the mortgage paydown. You seem to have a mindset of Dave Ramsey, which paying everything with cash is an intelligent move. Its only intelligent for people who fear debt, and possibly their own shadow.

@jarelterry2107 6 ай бұрын

He bring in private money to pay Eric off

@PaceMorby 6 ай бұрын

@@jarelterry2107 In ten years a few things will be different. 1. The property will be worth much more than I bought it for. So I could sell it, refinance it or even renegotiate with eric for another 10 years if I wanted to. 2. The property payments I make the Eric (the bank) will pay down my debt SIGNIFICANTLY in that timeframe. I will have tremendous equity at this point it time. So I could just go to a local bank and refinance into a new loan depending on whats going on with rates in ten years.

@jarelterry2107 6 ай бұрын

@@PaceMorby 🔥🔥

@imeldainterino7747 5 ай бұрын

My broker never says illegal but she just wanted our clients (homeowners) to hire their own lawyers too and write a letter that they are aware of subto. If we dont advise them in advance and they get "DUE SALE ON CLAUSE" which you didnt mention on your video. Our clients can put us on litigation and may even shut down our business. Do investors care about it? Hell no! Our brokerage got so many deals off market and were being chased by either seasoned investors or fake ones 😅

@MgtowRubicon 6 ай бұрын

A confused mind says 'no'. I am amazed at how illiterate real estate licensees are for offers involving creative financing. The listing broker won't even forward it to their client (illegal). I now reply firmly that I am prepared to file a complaint against their license for refusing to forward an offer to their client.

@jtcommunication Ай бұрын

I want to sell my condo this way to my tenant. Do you have anyone you can recommend to consult with me? Thanks.

@PaceMorby Ай бұрын

Get inside our free Facebook group, tons of people who know people in there paceapproves.com/freefb-ytc

@joelgoble9544 Ай бұрын

Dude, it’s the same thing as having a second mortgage or anything else. The first mortgage lender has claimed to the property overall before anyone else as long as they get paid and their terms are taken care of throughout the loan process. There is nothing they can do. Just like they can’t tell you who you can rent your property to or how much you have to rent it for. They can’t get in the middle of other deals that you make involving the property as long as you honor the original terms of the mortgage, they get their money they can’t say shit.

@joelgoble9544 Ай бұрын

Homestead buyer best buyer for seller financing

@CJAddams 6 ай бұрын

Now we have a video to send to open minded sellers lol Or at least an important clip from this video because it’s kinda lengthy.

@ProEquity.Rafael 6 ай бұрын

Yes I said the same thing

@PaceMorby 6 ай бұрын

I made it for that exact reason.

@TylerAndMeathaTapley 5 ай бұрын

Everything you are talking about is fine, but if there is an existing loan in place...MOST loans state that if the property is sold "or quit claimed" then the lender can require payment immediately. It is DUE UPON SALE CLAUSE. If that clause isn't in there...that is fine...but yes...lenders could and can require the debt be paid immediately if they find out you have transferred ownership of the property. This is on FHA/ VA/ and most conventinoal loans. You never mention this clause which I find very interesting.

@PaceMorby 5 ай бұрын

I have tons of videos on my channel breaking down the due on sale clause. It has only happened a handful of times and every time I have overcome it. www.youtube.com/@PaceMorby/search?query=due%20on%20sale%20clause

@TaraMullarkeyWorldwide 16 күн бұрын

1.5% is not a good rate?!

@joelgoble9544 Ай бұрын

I would never do a deal with you though your to smart. I would look for someone that is in there early 30s on top of the world because work is good that is willing to go past 35% of there income. An immigrant is probably best due to lack of credentials. Ballon there interest in 3 years and I’ll either get high asking price plus 3 years of rent in full or the ballon will entrap them and I’ll get the house back.