NEVER Disclose THIS Information to Your Lender…
ฝัง
- เผยแพร่เมื่อ 3 ม.ค. 2023
- Never should your lender need to know you’re doing the Morby Method. Never. Ever. Never disclose this information to your lender. It only hurts the deal. Watch this whiteboard breakdown as I explain the Morby Method to help you close more deals. Let’s dig in…
Join my Subto mentorship:
paceapproves.com/subtoyt
Get ACCESS to my community and FREE value here:
✌️ shor.by/pace-youtube ✌️
➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖
🔌MORE FREE VALUE 🔌
➡️ Get my $4,000 wholesale contract for $1:
pacejmorby.com/use-my-wholesa...
➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖
👥 Join our community 👥
paceapproves.com/communityyt
✌️Join my Subto mentorship ✌️
paceapproves.com/subtoyt
🐘 New to Real Estate Investing? Join the FREE Elephant Challenge 🐘
pacejmorby.com/invite
🐊 Become A Gator (Private Money Lender) - Get Started Now 🐊
paceapproves.com/gatortrainingyt
🤝 Partner With Me On My Next Deals! 🤝
subtofund.com/
👇 Get ALL My Contracts 👇
pacespaperwork.com
📘 Read My NEW Book: Wealth Without Cash 📘
Supercharge Your Real Estate Investing with Subject-To, Seller Financing, and other Creative Deals: amzn.to/3EgWUBw
“Contrary to what most people think, getting started in real estate doesn’t require money, and Pace proves it in this amazing book!” - Grant Cardone
🏘️ Join My FREE Multifamily Mastermind w/ guest speaker Veena Jetti 🏘
thevault.mykajabi.com/offers/...
⬇️ Get My Exact Wholesaling Contract For Only $1 (I Paid Thousands) ⬇️ paceapproves.com/wholesalecon...
📈 Scaling with Virtual Assistance (VA) 📈
startvirtual.com/courses/scal...
♾️ Get Limitless Lead Flow ♾️
www.limitlessleadflow.io/
📚 My MUST Read Books For Success 📚
tinyurl.com/yckufuf8
📸 Get My Gear 📸
My Computer: amzn.to/3I84Pm8
Monitor: amzn.to/3k7nWod
Cameras: amzn.to/3xuk2ZG
Lenses: amzn.to/3k2XSuC
Camera Gear: amzn.to/3k7p9ff
Audio Gear: amzn.to/3XDSOKL
Studio Lighting: amzn.to/3Z2DybB
🎥 Shop My Home Studio 🎥
www.amazon.com/shop/pacemorby
➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖
✅ BUSINESSES WE PERSONALLY USE! ✅
StartVirtual
Trained VA’s for calling, texting and admin
paceapproves.com/startvirtualyt
StartVirtual Bookkeeping ELIMINATE Bookkeeping HASSLES and 10x your Business
paceapproves.com/bookkeepingyt
Batch Leads
Pull lists, manage lists, skip tracing and text messaging
paceapproves.com/batchleadsyt
Batch Skip Tracing
Experience discounted skip tracing
paceapproves.com/batchskipyt
PropStream
Gain property information, pull lists, marketing and much more
paceapproves.com/propstreamyt
Batch Dialer
Gain unlimited outbound dialing
paceapproves.com/batchdialeryt
Carrot
Investor websites with content packages for SEO
paceapproves.com/carrotyt
FreedomSoft
CRM with websites, automation for follow-up, contract generator and more
paceapproves.com/fsyt
Prime Corporate Services
For all your LLC needs, look no further
paceapproves.com/primeyt
Deal Automator
#1 Real Estate Software on the Planet
paceapproves.com/DAyt
Relay
Online Banking The Keeps Your Business on the Money
paceapproves.com/relayyt
MyInvestorloan
Making the mortgage process fast and simple
paceapproves.com/lenderyt
➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖
🔌 PLUG IN & SUBSCRIBE 🔌
✌️ Follow Me On Instagram: / pacemorby
✌️ Follow Me On TikTok: / pacemorby
➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖
⚠️ #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 TH-cam video for entertainment purposes ONLY ❎
![[SUB] 베몬이 교관님 멘탈을 탕탕 후루후루~٩(๑❛ᴗ❛๑)۶ FOREVER 웃게 되는 갓기들의 수련회 | 돌들의침묵 | BABYMONSTER(베이비몬스터) 'FOREVER'](http://i.ytimg.com/vi/FISAO7BwIxE/mqdefault.jpg)
As a mortgage lender myself, this makes perfect sense and satisfies all parties. Dropping gems y’all. For free 😮
Hey Luis! Glad you're getting value from here.
is it mortgage fraud? just curious
The Morby Method is the PERFECT solution for a seller needing a large down payment. I just recently closed a Morby method on a 12 unit and executed it this exact way. No money out of my pocket and got paid to buy it. Great break down in this video 🔥
How much was the purchase price and what is the net operating income monthly?
Nice! What does it cash flow?
Is the seller carry loan recorded against the property in second position or is it an unsecured loan?
Hey Zach can we connect I’m trying to do a morby method on a 393 unit
@@Ddimarco Cash flow day one was $700/month. All rents were $150+/month below market value. Once it is stabilized, it will be nearly $2,500/month. I did a video on my TH-cam channel about how I acquired it. Check it out!
Thanks for explaining that question pace it’s like I never stop learning from you it’s amazing much love keep it up
Insane...Speechless, I'm really keen to see what the conversation with a lender would look like in this situation. Makes great sense the way you put it Pace, Thanks for sharing.
The 2 transaction explanation really helped me w getting this 🙏🏾. Appreciate all you do Pace. I'm going to keep paying it forward!
Great video. As a mortgage lender, I concur. Only give us the info we need. The extra info just makes it messy and honestly confuses most lenders. Cheers!
Glad you liked this video Matt!
Your a mortgage lender? You should know this is Mortgage Fraud. Contact your state regulator that give your license, run this scenario by them. See what they say.
@@dmlanddevelopment9181how is this fraud? What fraud has occurred here. I own a mortgage lending company and these are two separate transactions there is nothing fraud about it. Just a creative way to come up with less money in a transaction and don't forget that dscr loans are non consumer transactions.
@@dmlanddevelopment9181 how is this mortgage fraud? can you explain?
@@andrewyanni278 is it mortgage fraud?
i think i’m about to cry???? this made PERFECT sense!!!! thank you, PACE!
Wow, the VERY first time I have EVER heard a deal, although not real, done and understood. Wow❗️❤️👍🏾👍🏾🙏🏾
I've watched this video so many times. Thank you
😮 eye opening for a newbie. So grateful. May God continue to bless you and your family with abundance.
Thank you Tara!
Pretty clear to me. I think you did a good job explaining it.
This makes sense. When I hear your explanation it sounds almost identical to the double close method with Transactional funding.
Very good video. Nicely done.
That was way cool! Thanks Pace!
Fantastic video. Thank you.
Best mentor & teacher ever! Love this guy! ✌🏻
James. Appreciate you.
I'm glad you posted these; I've watched five videos in the last hour. Some guy wants to buy my house using this. Why on EARTH would I trust some stranger who's getting weird financing from yet other strangers, to really pay off the balance of the money I'm supposed to loan him? What's the guarantee they won't trash the place, flake out on the loan, and leave me with legal fees and repairs? I don't doubt it can work because there's a sucker born every minute. Thanks for the info and I will RUN from this deal.
INCREDIBLE! THANKS PACE!
You're welcome Roman!
This video finally connected the dots for me on the Morby method thanks 🙏🏼
Dean. That's great to hear!
What’s the M .. method ?
Very valuable information. Thank you.
Glad it was helpful! You're welcome Bernadette.
HOW DID THIS VIDEO GET IN MY FEED RIGHT WHEN I NEEDED IT. Thanks Pace
Love you man. Very informative.
Great to know you've gained value from this bro!
POWERFUL! 💎Thank! 😃
You're welcome Sherice!
Learning alot from you, may God provide more for you.
Thank you Benjamin! I appreciate you.
Thanks bro!!
Any time
Great like always...
Excellent video
Do you have an example contract on what this would look like? And how do you explain to the Title company that you need the transaction to go to the second holding?
Great video! What if there is a small loan on the property at a really low rate? If seller is willing to do subto, is there a way to keep that loan on the property (in 1st position) and still get financing for the rest of the purchase price, since that would have to be a 2nd TD I think? Been trying to figure out a solution to be able to keep that cheap loan he has without lender calling due on sale.
@Pace Morby Which DSCR lender do you use for these deals? In the past, my DSCR lenders have always asked to see the down payment & closing cost funds in the bank before approving the loan.
👋🏾 Pace can't be explain better than that from no one else. I'm loving it 🙂🤩💪💯 Subto leader Rock hardcore. The master of creative finance strategies! I'm grateful for having you as our community leader ❤️💯💪! ✌🏿🐊🤹 FAM!
Ricky. Thank you for your kind words. Rock is awesome!!
Many people will misconstrue what Pace says at the ending of the video. He is not saying to ask the seller for the kickback after the escrow is closed. Never forget to keep the seller finance part of the deal in the sellers head from the get go. Pace was merely attempting to to do what he was trying to do throughout the course of this video. Which was to treat the Morby Method as two separate transactions within people's minds.
YESSSSSSS BRO!!!!
This is like a Harvard University level of education for real estate all on TH-cam. Unbelievable. Pace is top notch.
What would be an ideal Morby method seller finance offer in this scenario? Meaning, would you negotiate 0% interest for 20 years with a balloon payment?
Pace down buddy...I'm slower than you explain also, I'm a novice in this ordeal though. I will save and watch this video 5 more times (at least) Dont forget the chill pill 💊 💊 next time ...Peace Master Pace and Bravo Again
But How does it structured in the back end?
Do you have it all written in the contract before?
How does the Title company knows to open a second escrow?
So to protect yourself from any funny business, would you just make sure to work with a title company that understands what you're doing and can make sure the lender sees the money distributed but then, distributers it per your agreement with the seller? Would this all be under a separate contract with the title company?
Man this dude is the bomb 💣.
I appreciate that Kenny!
@PaceMorby
Great video. It took me a minute but I get it now. In lieu of the PML money, can I reach an agreement with the Seller to treat the seller financing cash as a "Seller's Credit" in the first closing? Will that satisfy the DSCR lender's conditions? Or will it raise too many questions depending on the amount?
no. first tranaction MUST close with lender+money you got from somewhere else. cannot be from seller. if lender sees ANYTHING about secondary lien during first transaction, they WILL cancel.
Hi Pace , So how would you go about the seller only receiving the amount he agreed? Do we write special instructions to the title company stating that the seller only receives a certain amount of money? Or how do we go about it? Thank you so much for everything you provide!! I just joined the Gator tribe btw 🐊
That's amazing! What a great question you have there. Come and join us to our community and members will be grateful to help you: paceapproves.com/communityytc
How do you get the title Co to move money into a 2nd escrow
The bank wants to see the purchase contract. Isnt the seller finance explained in the contract?
Anybody please let me know if I’m understanding this, I’ve watch it multiple times to understand it. So the seller has a current mortgage and we go and get a mortgage to fulfill the sellers mortgage obligations, then that settles that. Then for your own mortgage or PML the seller gives that money or part of it to pay back to fulfill your obligation with your PML. And you and the seller are clean and clear of the banks and now it’s simply just you and seller in seller finance.
Anybody thank you!
I’m hearing it but it is confusing as hell! LOL!
I feel like the lender would eventually find out that the property is 100% leveraged. Aren’t Dscr loans done under an llc and in that operating agreement you would put these terms for the second Lien position?
_I feel like the lender would eventually find out that the property is 100% leveraged._
As long as the Close of Escrow happened, and as long as the DSCR lender saw that the money they sent to escrow on CoE was disbursed from the account they sent it to the a second escrow account, and as long as you keep making the payments on the DSCR loan to them, no DSCR lender will care.
would this method only be useful on a seller finance/cash
?
Is this different than seller carrying the down payment of your loan on 2nd position? Am I missing something? Why wait until close of escrow?
So is this a taxable event for seller? Sounds like it is since its 2 separate transactions.
I feel like I’m in the cheap seats. Can’t see the game nor hear it. How can I trust what you’re saying if you can’t get this simple task, correct?
This is probably a dumb question, but do you have to use a special kind of title company to do that second phase of the Morby method or will most title companies understand if you say you want to disperse back to the buyer some of the money for seller finance?
Love your question. Most title companies can work with this method. Best to reach out to my students in the free Facebook group and ask which title companies they use! Join now and make a post! paceapproves.com/communityytc
The title company in the way would never know either…you show up at the table with down payment bank funds the rest and your done…of course you’ll spend 100’a of hours to get one of these deals…maybe 1000’s…
Wouldn’t the seller have to pay taxes based on the sales price at the first closing?
Does this only work with private money lending as conventional loan lender wants to see that money in my bank account.
Hmmm. Help me understand this correctly. If you use the seller financing (Morby Method) proceeds to pay off the hard money lender (160K), plus closing costs (5K), which totals 165K; then what money is left over to rehab the property and pay yourself? You would have to ask the seller for far more than 165K. Did I get that right or did I miss something?
_You would have to ask the seller for far more than 165K._
Yes, you would. So you'd probably ask for an additional 10K to 30K on top of the 165K from your seller. However, if the house you're purchasing doesn't require that much rehab, then most of what you're asking for from the seller after paying off your HML/closing costs, goes to you. It's all in how you structure the deal.
Nice...!
So the point of all of this is to finance a home purchase 100%? This video randomly came across my feed. How much is the monthly payment?? I can't imagine getting a renter to cover the cost of the entire cost plus property tax and insurance.
By separating the two transactions, doesn’t the seller lose ability to treat it as an installment sale?
Is there a tax incentive for the seller to seller finance since they're not receiving the full purchase price ?
Yes. Only taxed on what you receive
If a seller finance is recorded, Does it show on your credit report?
It's pretty crazy that I can watch this type of content for free
Thanks for appreciating the free value I put out bro!
Do most title companies understand this concept? If not, what is the best way to find one that does?
Most of them do. I would suggest you reach out to my students local in your area and ask them which title companies they use! You can find them on the free Facebook group. paceapproves.com/communityytc
How does this work with taxes?
If this deal is done way differently, it cannot be done.
In that scenario, what incentive do you offer the seller to give you the backend financing?
You agree as part of the purchase term with seller.. The seller I assume is in finacual stress like can’t pay mortage and cant sell on market but had equity?
Seems like this deal would be rare to come by but idk.
I would love to buy a personal residence with creative finance. House last sold for $257,500. Listed now for $750,000. Currently empty. Thoughts?
Hey Grant! If you're looking for creative deals, my students have deals posted on the free Facebook group. Join now and check them out! paceapproves.com/communityytc
Wouldn't lenders have a disclosure requiring us to show who's funding the down payment?
Don't most lenders have LTV requirements? Why would the lender give you more money to pay off the private money partner. Wouldn't this make their LTV over 100%?
so the Morbee method is reimbursing a equity financial partner with interest from a seller carry second…
So the only reason to not go to the seller directly is because they'll get paid in cash upfront vs being resembled as 30 year lender making it more enticing for them to do? So you get a DSCR to give the seller a huge chunk of cash, get a partner to give the other portion to close escrow, seller finance the smaller portion, give the partner his money back and then pay off the seller XX% in X amount of years? This sounds great, but it only works if the gross income works. This wouldn't make sense on a single family costing 600k with rentability of about 4k max. Because you're still paying 2 loans essentially. Cheap 6+ unit places I could see this working. Also finding a gator or PML isn't like asking someone at McDonalds, you gotta search for that legitimately.
So if seller says no seller financing as they often do, long story short: no deal from get go! So, how more creative can u then get?
There are so many ways to do deals creatively, not just seller finance. If the seller says no, they may not be motivated to sell that way. But if you really want to push in that direction, check out this video where I convinced a seller to say yes to seller finance. th-cam.com/video/pgYGE9jmNPA/w-d-xo.html
So big picture this is a technique to have the seller , seller finance your down payment so you as the buy don’t have to put any of your own money to buy the property .
Should’ve said, “hey seller, remember we talked about how you would take back a note for some of the cash I pay for your house? Yeah I want you to take back a note for $165k “. The only risk is if that seller turns around and says, “No sorry I changed my mind “.
The reason that it's confusing is because you keep saying that they're totally separate transactions but then you reference the first one by asking the seller, with regards to the 2nd transaction but also regarding money from the 1st transaction, "can I get some of that money back 'from the first transaction'" - "some of that money from the 1st and now in the 2nd transaction even though we're supposed to think of that money as not from the first transaction/or whatever?"..
Maybe use different verbiage that's more appropriate then. This is from my perspective having never watched your other videos at all though. Maybe it's simply because I'm absolutely brand new and just stumbled upon this video.
;)
Apparently you're describing it well when I see the comments though. So, what do I know.
Anyone here have more info on doing a silent second.
💯💯💯
Thank you!
As a newbie who is just learning and jumping into these videos I'm really glad the person asked the question, "Why wouldn't they just keep the 360k for themselves?" I had literally asked the same question in my head two seconds prior and it prompted the clarification I needed. Thanks to whoever asked the question!
What is DSCR?
It's debt service coverage ratio.
Rates are high though, which can kill the cashflow
The exit strategy you use to generate cashflow from the deal totally negates however high or however low interest rates are.
@jalabi99 maybe if your flipping it or doing a short term rental but they usually aren't cashflowing as a long term rental right now with the lowest rates being 8 to 9% right now
@@gageschultz6019 ok...
@@jalabi99 lol
@@gageschultz6019 I’m in STR & some of them aren’t cash flowing at all right now
Don't most commercial real estate loans have an acceleration clause for junior security interests? I'd be surprised if the majority of DSCR notes didn't have some specific language on second liens.
I guess this would depend if the seller carry loan is recorded against the property or is unsecured.
absolutely. Beware the first doesn't check title and find your new "creative financed 2nd". Most 1st mortgages have small print that prohibits any junior liens.
@@stallionequity9035 Got it! Thanks! If someone is worried enough, maybe try to collateralize another property (if possible)?
@@cyrusjulian187 If you can, yes. This all seems like a get rich quick scheme to me that being pitched. Don't get me wrong, I am all for creative financing, and have used versions of it in the past. Growing fast is great and there are ways to do it. I just wouldn't want someone to lose it all because the bank discovered their Junior Lien.
@@stallionequity9035 Yeah, Morby is going to get his viewers into trouble with this one.
Never, should your lender need to know that you’re doing the Morby method.
Pace perhaps u should be lending to newbies to understand ur method better.
The Morby Method isn't for newbies. There's so much that could go wrong if you're new. I talk more in depth about this method in my mentorship.
I think the student's question is legitimate. What happens if the seller takes the 360k and says "I changed my mind, I don't want to finance you any more." Because these are two completely distinct transactions that occur a day apart, is the seller contractually bound to follow through with the seller financing leg?
This is a good question. I think this is actually a legal question and also dependent on the specific escrow companies' policies and procedures. I'm NOT a lawyer but in theory, you would have two different, separate escrows with two different contracts. So unless the second contract has a way for the seller to back out to get that money, the escrow company would have to honor that second contract is my uneducated guess. But I could be and most likely am wrong. Hope someone with experience can chime in here
@@cyrusjulian187 from the get-go from the approach, the seller agrees to a seller finance agreement. They also agreed that they want a big down payment you might not know the terms with the lender but you can share with the seller that I can get you about 60% of what your home is worth? That covers the big down payment the seller was looking for from the get-go so the seller is happy upfront. Seller will gladly give you the 40% your need for because his intent is to sell the property on seller finance when you initially approach him from the get-go.
@@cyrusjulian187 but you’re right he could not give the 40% up at closing but remember that money is not issued to the seller it stays in escrow to honor their original contract you had with the seller which is your seller finance contract so the money will be returned back to you with the seller finance agreement at closing.
@@mauricecox2 110% completely agree with you. I was just trying to look at Andrew, the OP's, comment from a worst case scenario. In theory, how could a seller who's untrustworthy try to weasel out of it? But yeah, I feel you on everything you said.
@@cyrusjulian187 Based on this video, it looks like the title company is receiving the contract between the buyer and seller and making sure the $ that goes to the Seller actually gets split and distributed back to the buyer.
I'm not actually 100% sure that's what's happening but that's what I picked up from the video at the 15:20 mark
What does DSCR stand for?
Debt Service Coverage Ratio. Unlike a residential loan where it's based on the DTI debt to service income ratio, a DSCR loan looks at the income of the underlying asset. For example, if the minimum DSCR for a loan is 1.25%, there needs to be at least $125,000 of NET operating income for every $100,000 of debt.
@Cyrus Julian
with $125,000 NOI, you can have a loan payment of $8,333.33 per month... $100,000 in payments for 1 year.
@Cyrus Julian I know you know what you meant, but others might think you meant the $100k is the total debt. Not just $100k in payments for only 1 year.
If a property has $125,000 Net operating income. It can have up to a $8,333.33 monthly payment. That's a $1,293,300 loan with 25 year amortization & 6% interest rate.. just an example
Hiding information from your lender is always a great idea... 🤣
😂
I got a watch this more in depth but man this seems so illegal
I tell you, it's not illegal bro.
@@PaceMorby no sir I don’t doubt you but your so fast and assertive about it that it seems Jordan Belforty. Like too good to be true or if someone finds out im fucked. You wouldn’t be where you are without it being legit but I gotta dumb it down even farther for myself
This is Mortgage Fraud.
If you don’t believe me, contact any state regulatory Banking & Finance, Fannie Mae, Freddie Mac or Hud.
Run this scenario by them. Hiding from the mortgage lender your doing a sec mortgage with the seller. Miss leading the lender, letting them think your bring the funds for down payment
Not illegal at all.
D bag alert. Even the f boy is like .. ummm. REALIZE THE CHALK BOARD BOY IS GOING DOWN A ROAD TO WHICH ... OUTCOME IS JAIL