Subject to training needed!

[Market_St_Equities]

I am thinking of ordering either John $cash$ Locke's Sub to course or William Tingle's course. Tingle's is much less expensive but also highly regarded. Anyone have any other feedback on good sub to courses?

Thanks in advance.

Brian
Market Street Equities, Inc.

[Jim FL]

Brian,
I know a thing or two about buying sub2. I also know the two authors you mentioned personally.
Both great guys, and tons to teach.
John Lockes course in my opinion, the manual was all I got to look at by the way, was great. It did leave you with some things needed, such as forms, but ALL courses require you to have local forms drafted, or the ones with the course changed for local compliance.
John is VERY good at teaching you exactly what you say, and how to act with sellers.
In my opinion, John could sell anything to anyone at any time, and would not do so unless it worked for ALL parties involved.
I like and respect that style, therefore I'd recommend his materials to anyone asking about them.....worth the price, since one deal will more than pay for it.

Same thing with Tingle, another good guy, with tons of good info in his materials.
I recently read his book, and liked it a lot.
It does beat the older more established main-stream sub2 courses out there.
Remember this though, each author is a different person, and while the over all technique they teach is the same, there will be subtle differences in the 'system' they espouse or use.
Obviously they both work, as both authors you mentioned are successful investors, and they teach what they do.

Before you purchase a course on sub2, try asking some questions here, and gather as much info as you can FREE first.
After that, then seek out a course that covers the little details you might miss online.
I'd be happy to help you here FREE, just as I'm sure Dan will.

So, fire away with sub2 questions, and we'll see what we can do to help.

Either course you mentioned is good, so picking one over the other, I just could not.
You should not either.
Over time, it is wise to build a library of courses/books anyway, so start with what you can afford, and buy others as you make money.
Education in this business is ongoing, and should NEVER stop.

Take care,
Jim FL

[Market_St_Equities]

Jim, hey thanks for the response. I am pretty familiar with the Sub to process. I have even read the 87 page manual thoroughly that Locke has. I do not know if I want to go into each situation with the seller with a script, though. I work as an on-site real estate agent for a big builder here in Atlanta and understand that each sales opportunity is different and that your ability to adapt to each, listen to the seller (or customer) and provide solutions, while being honest and fair will help you go a long way. I think I am more concerned about the true mechanics of the deal- all paperwork needed, closings, cya's, successful exit strategies, and perhaps some marketing direction as well. I have actually done one sub to deal, that turned into a short sale because the loss mitigation would not do a modification or forebearance. It was with a friend of friend, so I would not classify it as a normal sub to deal.

My plan is to market to motivated sellers in a particular area through direct mailings, car signage, bandit signs, networking and internet. I will utilize a live operator calling system to weed through those that are not truely motivated. I then plan to buy using the sub to method, with my main exit strategy being lease purchasing the property out. I would like to be somewhat on auto-pilot since I also work full time. I need to learn more about potential pitfalls and problems..such as redemtion periods, bankruptcy, title searches, etc. I am sure there are more, but I am not real familiar with any of them. Learning more about whether to use land trusts, LLC's or corps is also a priority.

One last question, should anyone starting out in purchasing houses using the sub to method have the wherewithal to be able to refinance at any time, just in case the DOS is called...or for any other reason? That is not something I am positive I am able to do at the drop of a hat.

Thanks again. I appreciate the opportunity to learn from these who "have been there,done that."

Brian

[Dan Auito]

Hi Brian, glad you found the forum, sounds as though you have a good head on your shoulders and can learn more than can be said here on the subject of subject2's by getting and applying what the pro's tell you to do. You should have a little help in your email from me concerning your request.

Feel free to delve into the subject and teach everyone what you learn as you go, I'm not a subject to guru so I'll be a pupil as well concerning this topic!

[Jim FL]

Well....in that case.
Since you have a good understanding and want to move forward, I can and will help.
I buy sub2 90% of the time, and employ several exit strategies.
What you seem to be seeking is quite frankly my system....how I work.
Since this is not my website, I'll not give a sales pitch for my materials.
Instead, since Dan offers so much for free, and wants to learn more on sub2 as well.
I'll come here and help get you up to speed free.
I've done several hundred, yes hundred sub2 deals, and have learned a thing or two along the way.
It is late now, so I'll post more tomorrow and address your post.
Your market is fine for sub2.
I have a student there who got PAID $23k to buy a house sub2 within 30 days of listening to me.
Stick around, and as long as I'm welcome, I'll come here to talk REI. Something I even do in my off-time.
Take care,
Jim FL

[Dan Auito]

Folks Jim is a noted heavy hitter. I hope you will pay attention to what he is willing to tell us all. You can find his courses on the market and they are highly respected. He's not pulling your leg. Jim there is a commercial posts section on this board and you are free to detail any offer and product features and benefits to your hearts delight there my friend. Don't be shy about telling people how you can help them, even if it does cost a few bucks. It's worth it and they (we) deserve to know more. I'm looking forward to your education on these boards Jim. Dan

[Jim FL]

Brian,
I usually answer posts by quoting and responding within someones own words, makes it easier for me to address each point and follow, so bear with me here.
You said:
"Jim, hey thanks for the response. I am pretty familiar with the Sub to process. I have even read the 87 page manual thoroughly that Locke has. I do not know if I want to go into each situation with the seller with a script, though. I work as an on-site real estate agent for a big builder here in Atlanta and understand that each sales opportunity is different and that your ability to adapt to each, listen to the seller (or customer) and provide solutions, while being honest and fair will help you go a long way."

REPLY:
I agree 100%.
While there are certain phrases and questions I use on an almost rountine basis with each seller, you are right, following a script just is not in the cards all the time. In fact, the order in which I ask the same questions, is never the same.
I'm more the type who prefers to have a conversation with the seller.
This does two things, first, it puts the sellers at ease, and helps them build trust in me and my services, it also helps me delve into their situation deeper.
When a seller calls, basically what you are offering with any real creative offer, is debt relief.
A service.
So, selling your offer to buy sub2, is just that, selling your service of 'taking over the property and all to do with it."


You said/asked:
" I think I am more concerned about the true mechanics of the deal- all paperwork needed, closings, cya's, successful exit strategies, and perhaps some marketing direction as well. I have actually done one sub to deal, that turned into a short sale because the loss mitigation would not do a modification or forebearance. It was with a friend of friend, so I would not classify it as a normal sub to deal."

REPLY:
Well, if you took title to a house, and left the mortgage or trust deed in place, no matter the situation, then yes, you have done a sub2 deal.
As for marketing, sounds to me like you have some good ideas already, we'll address those later in this post.
Bottom line though, don't rely on just one method in this business for anything.
Marketing, have several lines in at all times.
Exit strategies, make sure you buy right, and by that I mean for significantly below market value, no matter what method of purchased used, and you are virtually unlimited in your exit possibilities.
That's what I espouse and teach.
As for CYA's, that part is easy, promise nothing, and give a whole lot.
Things will go better, and of course, get a competent local attorney to review any forms you intend to use for local law compliance.
I sell forms online, as samples only, but know that there are usually very few if any changes made to them when used by investors in most states in the country.
Should be the same thing for most sub2 courses or form sets sold which are utilizing the land trust method.

Next you said/asked:
"My plan is to market to motivated sellers in a particular area through direct mailings, car signage, bandit signs, networking and internet. I will utilize a live operator calling system to weed through those that are not truely motivated."

REPLY:
I'm not a fan of answering services, because frankly, there are just too many subtle ways to get sellers to give info, and determine true motivation that I don't think a phone operator can be trained to handle, along with their other duties. However, I understand time can be tough, especially for those who are employed.
I'd suggest making a simple questionnaire the service can complete, with property details, and a few pointed questions to test motivation.
Things like this:
"Why are you selling?"
"How soon do you want to close?"
"If we can take over payments, cover maintenance, all repairs, taxes, insurance and basically everything to do with the house, does that sound like something that might work for you?"

Then of course, call back the ones who answer affirmatively to the last question, and check numbers yourself.
I like a two teired phone system myself when I cannot answer all the calls.
Most times though, I just carry a cell phone, and forward all calls to that, answering myself.
Yes it gets hectic at times, but rining is the sound of money. :-)
A a two teired phone system is basically this........
One number on all marketing materials that advertises you buy houses.
A simple outgoing message that just says, "Hello, we buy houses, any area, condition, price range and close fast. If you have a house to sell, please leave your name, number and the address after the tone. HOWEVER, if you are calling because you want to sell your house TODAY, you may call our emergency seller hotline and reach us direct. If you are ready to be done with your house today, please call xxx-xxxx NOW for an immediate sale!"
The REAL motivated folks call the second line, and sometimes others as well.
Bottom line, when people are READY TO SELL, they call anyone advertising they buy and talk to whoever answers or responds first. You cannot buy houses and get good deals in slow motion.

Next you said/asked:
" I then plan to buy using the sub to method, with my main exit strategy being lease purchasing the property out. I would like to be somewhat on auto-pilot since I also work full time."

REPLY:
First thing first, PLEASE do not make the assumption that because you intent to focus your purchasing on sub2, that a lease option is the best, or easiest method for exit.
It's not.
Sure, lease option tenants are easier to manage than straight rentals, but in the end, they are still tenants. You will have vacancy issues, repairs, maintenance, advertising, holding costs etc.
I sell a lot of houses with lease option myself, but certainly not all.
One other thing to consider is your market. Take a look around.
I know your area somewhat, and you will see if you have not already, there are a lot of others out there offering houses via rent to own, or lease option.
In addition, mortgage money is easy and cheap to get these days, and rentals are offering incentives out the wazoo to get tenants.
Have you seen the apartment complexes offering $50 move ins, or no rent for 90 days type of things?
This means when selling via lease option, you can expect less upfront money in general, and more time before getting tenant buyers.
I am now holding my houses being sold via lease option longer than ever before, just to get decent upfront money and more qualified tenant buyers.
Now, that's not to say selling via lease option is bad, or not to do it.
Just be prepared and go in with your eyes open.
Also don't rule out other exits, like retail, wholesale, contract for deed, or partial seller financing/retail.
I am now working with a partner, and here is something we are doing.
We are buying houses sub2 that are slightly behind in payments, or just about to be.
The sellers are deeding them to us for what is owed.
These are all deals that have heavy equity in them, and allow us to sell retail quickly for slightly less than market value and still make nice LARGE CASH paydays.
Here's one example:
Seller deeded us a house worth $140k, they owed $101k.
The house needed a good cleaning, cost us $200 to pay some folks to spruce it up nice.
It was two payments behind, totalling ~$2k, we split that expense.
My partner, who is a pro at getting buyers, and getting them qualified with a local creative mortgage broker got us a buyer and the house under contract for the full $140k.
Sounds good so far, right?
Here is the cool part, we are closing on this this week, so we don't have to come out of pocket with another payment.
The buyers need some help, and since we are in cheap, we are paying $7k in closing costs to help get the deal done.
So, when the deal breaks down, it looks like this:
Purchase Price: $101k
Plus Holding cost/repairs:$2200
Plus closing costs for buyers: $7k
Our closing costs/title work: $1500
Total we must pay at close: $111,700
Now, remember, the sale price is $140k, so deduct what we must pay at close from that, ($140k -$111,700) and that is the profit.
A nice check for $28,300.00
Sure, I have to split this with a partner, so its only $14k or so to me.
But, I've seen the house ONCE when we signed it up, and spent no time on it other than making calls to line up the closing and title work on both ends of the deal.
I could have lease optioned the house, or sold with seller financing and made a whole lot more.
But, retail sales, FAST, helps build cash reserves, which are important in this business. We'll discuss that later in this post as well, since you mentioned being forced to refi.....the old 'what if' scenarios......

Next you asked/said:
" I need to learn more about potential pitfalls and problems..such as redemtion periods, bankruptcy, title searches, etc. I am sure there are more, but I am not real familiar with any of them. Learning more about whether to use land trusts, LLC's or corps is also a priority."

REPLY:
These issues are best served with a good comprehensive course, you are right. Things like what forms etc. I do have a post on my forum somewhere outlining the forms used, and if I can find it, I'll cut/paste it here sometime later. Basically, the same set of sample sub2 forms I sell over there.
Some of these issues can be handled by pro's on your behalf and should be, like title work, and entity formation.
I personally espouse using a trust to take title, and use the beneficial interest assignment to buy the trust/property to avoid due on sale issues and remain anonymous.
As for an LLC or Corp, that's advice you need from an attorney or CPA, since everyone has different tax circumstances.
I do advocate taking title in a trust, with the ultimate owner of the trust in the end being an entity. That's just prudent, since trusts provide anonymity, and corps. or LLC's provide liability protection.
Two completely different animals that often get confused.

Next you said/asked:
"One last question, should anyone starting out in purchasing houses using the sub to method have the wherewithal to be able to refinance at any time, just in case the DOS is called...or for any other reason? That is not something I am positive I am able to do at the drop of a hat."

REPLY:
The short simple reply would be YES, NEVER buy a house sub2, without having the ability to pay off the loan, which most times folks assume means having the ability to refi them.
Here is the thing though.
See, I like to look at things with the 'worst case scenario' in mind. This helps us to be prepared for the unseen, and still get paid when handling them.
Probably something to do with being an ex-cop and years of being trained and drilled with that same theory, 'always be prepared for the worst case scenario'.
So, imagine, you have triple A credit, and bought 50 houses sub2.
Suddenly 25 of them get called due. (not likely, and frankly, I've NEVER had one called due).
But, even with GREAT credit, can you refi them all?
Unless they have significant equity, probably not.
So, as long as you buy right, again, meaning for WELL BELOW market value, even if YOU personally cannot refi, there is enough room to get something done.
I try to maintain my sub2 portfolio at just about 65% of value.
I have bought, and will buy houses for more than 65% of value, but hardly ever more than 80% of value.
Why?
Because if the loan gets called, and I cannot refi, I can at least sell for less than value, quickly, and still get paid, or bring in another investor to refi, and split the deal, because their is enough equity.
Does that make sense.
Shoot, my first 100 or so sub2 deals, I would not have had a prayer of refinancing them had they been called due.
Even now it would prove difficult if a large number were called on me.
But, because I buy right, I can still pay off those loans, and make a nice hefty profit.
Does that make sense?
Here is the thing, entering into the sub2 business worried about the DOS clause is not a good thing. Don't do it, because in reality, the due on sale clause is a non-issue.
Buy houses sub2, make the payments, keep them insured, and in good repair, and nothing could be further from the lenders mind.
Certainly not a 100% garuntee, nothing in life is, but based on my personal experience with several hundred subject to deals, and plenty more on the horizon, the due on sale clause is not something I even consider.

Hopefully this gives you some things to think about anyway.
Feel free to post more questions here, and I'll come around frequently and respond if it helps.
I'm also taking Dan up on his invite to post my materials for sale on the commercial forum.
I do cover in some fairly great detail the sub2 business, so feel free to check it out if you want.

Anyway, take care, and good luck,
Jim FL

[Dan Auito]

Jim I can't thank you enough for your reply. I just got in from flying and am toast but wanted you to know I will be reading with interest when I get my senses back. I have contacted Brian to get him back to the thread. Thank you so much for all your time and effort in giving this valuable advice. Dan :praise:

[Market_St_Equities]

Jim, thanks for the post. I think it is clear that you are a sharp individual and that you are obviously on top of the Sub to game. No question about that. You definitely answered just about all of my questions very thoroughly. I wanted to also touch on a couple of additional things if it is ok. Also, can you post a link to the site where your forms and course is...

I definitely need to learn more about land trusts and also using a LLC or Corp for this biz. Not my area of expertise. I actually created a Corp for my partner and I on our first two deals, which are rehabs, but he and I are only doing these two deals together. Can I maintain use of the corp even if he and I are 50/50 in it? I should probably ask my attorney also.

I think in the long run, when I am able to go full time, I would prefer to speak with the potential sellers (and buyers for that matter) live. However, given my work schedule, it is too difficult to do at this point. I like the idea of having the operator ask a serious of questions, like you mentioned, that I design that will help delineate who is truely motivated and who is not.

With regard to lease options...isn't it true that this method of exit strategy, no matter the term (1 year, 2 years, etc) will put me in a dealer status and not a rental status, which obviously changes my tax burdon? If my intent is to sell at a pre-determined price at the end of a lease, or maybe even at some point during the lease, then the house becomes merchandise, correct? Only if it is a true rental, for a year and a day does it comply and then qualify for the long term captial gains and also a 1031 tax exchange. This is what I have been told by another tax expert/investor but they are not a CPA. I plan to talk to my guy to verify, but I think in a nutshell it all boils down to intent.

With regard to the example you shared (great job, btw) do you have to secure your own financing to be able to sell the home you bought sub to, before closing with the new buyer? If not, is it going to take a special type of attorney to handle this sort of closing? I have been researching sub to's for quite some time and I am sure you have a wealth of experience with those not very knowledgable telling you that you are not able or maybe even that it is illegal to purchase this way. I even had one friend whose neighbor is an attorney say it is illegal. I laughed, and inside I knew that they were simply not educated enough. I ask, because I wonder if I should start looking around for an attorney to handle everything once I get that point. I already have 2 mtg brokers who specialize in sub-prime or challenged credit, lined up and understand what I am doing. They also have no issues with me assisting with closing costs, offering downpayment assistance and also carrying back seconds to help these people qualify.

Do you worry much about surveys, title searches, and the like? Is it difficult to find out the true balance owed on a property? Do you ever worry that the original homeowner would come back in 30 days and demand their property back? Seems like it would be a nasty fight in a court of law.

Will me being a licensed real estate agent have any bearing on purchasing sub to? I know it will help from a comp standpoint..easy access to mls and fmls.

Thanks again Jim, you are a true asset. I look forward to seeing your website and getting more info about your courses. You can probably click on my profile and shoot me an email with the link if you are not allowed to post in the forum.


Brian
Market_St_Equities

[Dan Auito]

Brian, I think Jim can speak freely here, We can all judge for ourselves what is commercial and blatent advertising. Jim is earning his right. Unlike others on various boards who just swing through with some commercial bomb to drop. Feel free Jim to give everyone your info without fear of sanction. I hope this site can be different than some hardcore control freak sites that are out there. :SM056: :beer:

[Jim FL]

Brian,
I'll respond the same way, if that's okay, it makes it much easier for me to follow as I mutli-task in the office.

You said/asked:
"Jim, thanks for the post. I think it is clear that you are a sharp individual and that you are obviously on top of the Sub to game. No question about that. You definitely answered just about all of my questions very thoroughly. I wanted to also touch on a couple of additional things if it is ok. Also, can you post a link to the site where your forms and course is..."

REPLY:
Thank you for the kind words, and sure, I do know a thing or two about sub2, and it was HARD earned, over a few years of doing this full time. My materials can be found at REmentors.com

Next you said/asked:
"I definitely need to learn more about land trusts and also using a LLC or Corp for this biz. Not my area of expertise."

REPLY:
Land trusts are something I can help with, but not the LLC or corp. questions.
Since most folks have different tax/liability/asset circumstances, I always advise them to speak to a CPA and/or attny for such things.
I DO advocate when buying sub2, to place the property into a trust, each property its own trust, and then make someone you trust, or an entity be the trustee. The beneficial interest holder, or owner of the trust, should be another entity, like a corp. or LLC, depending on your personal choice.

Next you asked/said:
" I actually created a Corp for my partner and I on our first two deals, which are rehabs, but he and I are only doing these two deals together. Can I maintain use of the corp even if he and I are 50/50 in it? I should probably ask my attorney also."

REPLY:
Same thing here, yes, ask the attny. However, if you are planning to 'go it alone' a new entity, like a single member LLC or corp. would be wise. Always good to maintain control, unless you buy your partner out of the existing corp. They are cheap/easy to set up, so I'd advise a new one for your new deals.

Next you said/asked:
"I think in the long run, when I am able to go full time, I would prefer to speak with the potential sellers (and buyers for that matter) live. However, given my work schedule, it is too difficult to do at this point. I like the idea of having the operator ask a serious of questions, like you mentioned, that I design that will help delineate who is truely motivated and who is not."

REPLY:
GREAT idea, and the way I worked it. I used voicemail at first, then went to anwering myself when my schedule permitted.
I do include a 'seller information worksheet' in my materials which can be used as a sort of script for those you hire to answer the phone. I originally designed it for use by my spouse when she answered the phone for me. This was well before she learned my system and we were newly married. Now, she is good at answering and saying, "Yes, we buy houses, can I get a number and have my husband call you back?" :-)

Next you said/asked:
"With regard to lease options...isn't it true that this method of exit strategy, no matter the term (1 year, 2 years, etc) will put me in a dealer status and not a rental status, which obviously changes my tax burdon? If my intent is to sell at a pre-determined price at the end of a lease, or maybe even at some point during the lease, then the house becomes merchandise, correct? Only if it is a true rental, for a year and a day does it comply and then qualify for the long term captial gains and also a 1031 tax exchange. This is what I have been told by another tax expert/investor but they are not a CPA. I plan to talk to my guy to verify, but I think in a nutshell it all boils down to intent."

REPLY:
I've also been told it boils down to intent, and the fact that the IRS does not seem to have a set pattern of classifying someone a dealer based on any numbers, as in how many deals per year etc.
As for the tax issues, you can defer any profits made til the end of the term, and pay then, or pay on the rental income, and treat the end sale as just that.......either doing a 1031 if you've held the property long enough or not.
Since when selling with a L/O, you use seperate agreements, (a lease and an option), the lease gets treated as a rental, which it is.

Next you said/asked:
"With regard to the example you shared (great job, btw) do you have to secure your own financing to be able to sell the home you bought sub to, before closing with the new buyer?"

REPLY:
No, when you BUY sub2, you OWN the house, therefore, the seller in the transaction with the buyer is the trust, and the paperwork for selling gets signed by the trustee.

Next:
"If not, is it going to take a special type of attorney to handle this sort of closing?"

REPLY:
Nope, just a regular closing is done, so no need for a special attny, just one well versed in RE law who can close deals.

Next:
" I have been researching sub to's for quite some time and I am sure you have a wealth of experience with those not very knowledgable telling you that you are not able or maybe even that it is illegal to purchase this way. I even had one friend whose neighbor is an attorney say it is illegal. I laughed, and inside I knew that they were simply not educated enough. I ask, because I wonder if I should start looking around for an attorney to handle everything once I get that point. I already have 2 mtg brokers who specialize in sub-prime or challenged credit, lined up and understand what I am doing. They also have no issues with me assisting with closing costs, offering downpayment assistance and also carrying back seconds to help these people qualify."

REPLY:
I do think finding an attorney who understands the fact that they are your employee, is important. To me this means I'm in charge, calling the shots.
Sure, they give legal advice, but ultimately its up to me to make decisions, whether the attorney agrees with them or not. I'm the one paying their bill, so I'm in charge. It does help however to have an attny well versed in REI, and they do exist. The best place to find one is through referals. Check with other local REI's, at clubs etc, for contact info for attny's they use. This will save you time, and effort.

Next:
"Do you worry much about surveys, title searches, and the like?"

REPLY:
Surveys are easy, any survey company can help you, and they are only needed under two scenarios.......
1. When their might be a question about lot lines, entrochments etc, when buying, which is rare.
2. When selling and your buyers lender requires it, which most do. In this case, my closing attny calls and arranges for the survey. Sometimes we pay ahead of time for them, and others we pay at close.......depends on the survey company I suppose. Not something I worry about, this is part of why we pay a closing attny when selling. Same thing with title work.
When buying I run a title search, on ALL deals, and will get title insurance when I feel it is needed.......usually when the sellers have owned the house for some time. If the sellers just bought the house within 1-2 years, or refied it, and there was clear title at that time, the new search shows nothing, I will forego title insurance.......all of which my attny handles.

Next:
" Is it difficult to find out the true balance owed on a property?"

REPLY:
Nope, not hard at all. When meeting with the sellers the first time, one of the forms they sign is written authorization for the lender to release account info to me. I use this and call the lender to verify numbers. Not a big deal, and a normal part of due diligence.

Next:
" Do you ever worry that the original homeowner would come back in 30 days and demand their property back? Seems like it would be a nasty fight in a court of law."

REPLY:
Nope, they sold me the property, so the burden would be on the sellers. Besides, why would they come back? As long as you are performing, there would be no valid reason I could see for a seller to come back and request the property back. I have had some ask, but the answer is always no, unless they want to buy me out. Once you BUY a house sub2, you OWN it, and there is no backing out of that.

Next:
"Will me being a licensed real estate agent have any bearing on purchasing sub to? I know it will help from a comp standpoint..easy access to mls and fmls."

REPLY:
I don't see why? Follow your state laws and license requirements for disclosure, and that's about it. In fact, since you have MLS access, mailing to, or calling recently expired listings is a good source for leads on deals, sub2 or not.

Next:
"Thanks again Jim, you are a true asset. I look forward to seeing your website and getting more info about your courses. You can probably click on my profile and shoot me an email with the link if you are not allowed to post in the forum."

REPLY:
Dan was kind enough to allow me to post it, so here is my website again in case you missed it before: www.REmentors.com
Stick around, sometimes I get on a posting rampage and post LONG detailed posts for hours.....its my relaxation sometimes late at night, or on slow days.

Anyway, HTH and good luck,
Jim FL



Brian
Market_St_Equities[/QUOTE]

[brian-gibbons]

Brian, I think Jim can speak freely here, We can all judge for ourselves what is commercial and blatent advertising. Jim is earning his right. Unlike others on various boards who just swing through with some commercial bomb to drop. Feel free Jim to give everyone your info without fear of sanction. I hope this site can be different than some hardcore control freak sites that are out there. :SM056: :beer:

IMHO, as I am more of a private money guy and lease option guy, I have been to Jim's site and seen his materials.

2 thumbs up for his frankness and his honesty. TCI and CREONLINE have their sub2 gurus, but to Jim's credit, one night I was on www.L2P.com I think and Jim was being a gracious guest there too, helping L2P's community out.

Check out his forum (he does not know me well) http://www.rementors.com/forum/index.shtml

I love his forum, and he shoots from the hip, as I seriously try to do.

Keep up the great work, Jim from FLA!

Brian Gibbons
aka Merlin, Wizard of Options
www.creiu.com

PS I had an English 850 cc Norton in the 1980's, what is your opinion of that? It was QUICK!.

[Keith(CA)]

I am thinking of ordering either John $cash$ Locke's Sub to course or William Tingle's course. Tingle's is much less expensive but also highly regarded. Anyone have any other feedback on good sub to courses?

Thanks in advance.

Brian
Market Street Equities, Inc. Sorry I didn't weigh in here sooner...

I have two of Mr. Locke's courses (sub-to and bird-dogging). Both are very light in my opinion. The bird-dogging course was only 30 pages, and about 20% of that was the author just singing his own praises...lightweight and disappointing. Look for Barry Grimes if you want a bird-dogging course (in 5 volumes...over 1,000 pages).

John's training manual, on the other hand, isn't too bad. I still think it's a lightweight and should pack a lot more information that it does. It is double spaced and printed on only one side of the page. You'd probably do okay with it, but you still gotta be careful because the author seems to teach that you should be able to buy at retail prices and still make money on every deal in every market.

The full-blown course is a HUGE disappointment...you get the training manual plus a 3-volume set plus audio CDs. Those first two extra volumes are merely a power-point presentation printed single-side on paper. HUGE print and a couple of bullet points on each page (enormous waste of paper, IMHO). On the audio CDs you get to hear the author (and his annoying assistant) read the bullet points to you with a little added discussion, emphasis on the word little. To his credit, the annoying assistant does correct a lot of the author's mistakes throughout the reading. I could not make it very far into Vol. 2 out of sheer boredom. Volume 3 is a printout of a bunch of market statistics and stuff local to your zip code.

Mr. Tingle does indeed have an outstanding course. And when you read it you get the feeling you're listening to an old friend speak. You know, it just has that down home quality. I certainly don't think you'd go wrong if you purchased it, plus he answers all questions through his own website forum. His course comes with a CD that contains pictures of his example deals plus the forms he uses in his state (Georgia). I don't like that the course is double-spaced.

William does have a separate marketing course, but it was double spaced and printed on only one side of each page. So, it sits in a 1-1/2" binder when it should really take up half that room. The content is pretty good, but it doesn't move as well as his sub-to book.

I just took advantage of Jim's 50% deal he had going on his site and bought his sub-to course. Since I already had the other two author's sub-to courses on my shelf (and I haven't yet started my investing...I'm still a beginner and starting to become a fence-sitter), I figured that I did not need to spend any more money and have yet another course sitting on my shelf. My thought is that I already had everything I needed to get started.

But while that was true, I do have what I need to start, I'm thinking that started just may be a bit easier now thanks to Jim's course. I think Jim breaks it all down even a little better than William does. Jim hammers home that you DO NOT cold-call...you do not spend your time chasing homes. Instead, you market, market, market so that the homeowner can find you. The mechanics of the sub-to process are broken down really well and there are a bunch of conversations (like scripts) that really help you envision yourself sitting there across from a seller having a talk about buying their home. As a bonus, Jim prints his manual single spaced and on both sides of the page...just like a real book! Included is a floppy disk with Jim's forms he uses in his state (Florida). My computer had a little trouble readiing the floppy but evenutally got it and now the forms are safely on my hard drive.

Jim's marketing manual fits inside of a 1/2" binder because he single spaces and prints on both sides of each page...fabulous!! The content is good, but there are a lot of typos. It looks like the word "we" was changed to "I", but it wasn't just the word...it was almost everywhere. For example, a word like welcome becomes Icome, were becomes Ire. It needs a lot of editing. But once you get passed that, the content is tremendous.

Here's my votes on a scale of 1 to 10 (I consider quality of content, completeness of content, presentation, and value for money):

Mr. Locke's Bird-Dogging Course -- 2
Mr. Locke's Sub-to Training Manual -- 6
Mr. Locke's Sub-to Training Course -- 4.5

William's Sub-to Guidebook -- 9
William's Marketing Course -- 7

Jim's Sub-to Manual -- 10
Jim's Marketing Manual -- 8*

* Given that I purchased Jim's materials at his half-price sale, I'd really have to give it a 10 as well...but my opinion is based on if I had paid full price. Also, Jim's sub-to and marketing manuals come as a package deal.

[Dan Auito]

Thank you for that excellent report Keith, that is solid gold information put into fine perspective for all to see. You've got a future with ABC NEWS!

Kester in the thread below could use your insights on Bird-dogging Keith you've read the materials could you explain to him the methods of a proficient bird-dog and if by chance you have a file that relates maybe you could find a way to get it to him. Thanks again Keith your participation is very much appreciated! :praise:
http://www.magicbullets.com/forum/showthread.php?p=1084#post1084

[Jim FL]

IMHO, as I am more of a private money guy and lease option guy, I have been to Jim's site and seen his materials.

2 thumbs up for his frankness and his honesty. TCI and CREONLINE have their sub2 gurus, but to Jim's credit, one night I was on www.L2P.com I think and Jim was being a gracious guest there too, helping L2P's community out.

Check out his forum (he does not know me well) http://www.rementors.com/forum/index.shtml

I love his forum, and he shoots from the hip, as I seriously try to do.

Keep up the great work, Jim from FLA!

Brian Gibbons
aka Merlin, Wizard of Options
www.creiu.com

PS I had an English 850 cc Norton in the 1980's, what is your opinion of that? It was QUICK!.

Brian,
Thank you for the kind words.
Appreciate it.
Yes, I post to Jeff's forum once in a while too, and Jeff is also a very gracious host.
He has allowed me some latitude, and for that, I try to give back there when I can.

As for the bike, yes, nice scoot.
I ride a HAWG, but frankly, that was not always the case.
Started with late 60's, all the way thru early 80's Japanese street Bikes.
Had an appreciation for BMW's and British bikes, very nice.
Someday, when I slow down and get time, we are building a LARGE outbuilding near our home so I can start to collect Bikes.
I do plan on keeping a variety, from custom American Bikes, Harleys, and even some Brittish metal, and perhaps some Italian...always had a thing for Ducati too.
I'm just too old to ride standing on my head anymore, so my laid back HAWG works for me........and its LOUD and looks cool! :-0

Good to see you here. Hope you stick around. Dan has been a GREAT host, and the community is growing.
A good place to be, and perhaps someday we'll meet, especially if you are on the seminar circuit.

Take care,
Jim FL

[Dan Auito]

I agree Jeff is really a saint. He lets you say what needs to be said without sanction! As it should be. :thumbup: for www.lease2purchase.com and also to Brian and Jim for keeping it interesting!

[REI-NY]

Excelent thread, I have been reading this one thread for the past hour or so. Excellent information Jim, Dan everyone just great. I am new here as well I have been reading a lot and reading here on just adds to it a great deal.

thanks

Michelle

P.S. BTW Dan I have your book I should be starting it in the next day or too I am sure I will have some questions for you as they come up. Looking forward to that thanks again.

[landtrustwizard]

Jim from FL. That was an excellent answer on this subject. I'd like to add additional information to just one item. You said, " Land trusts are something I can help with, but not the LLC or corp. questions. . . I DO advocate when buying sub2, to place the property into a trust, each property its own trust, and then make someone you trust, or an entity be the trustee. The beneficial interest holder, or owner of the trust, should be another entity, like an LLC, depending on your personal choice.

The importance of Trustee Selection (http://user148333.websitewizard.com/choosing-a-trustee.html).

As to using a corporation:

Corporate stock is considered an "investment". Investments are available to satisfy judgement creditors if you are personally sued. So you rear-end someone, get sued, and lose, they get your investments and suddenly they own the corporation and all of its assets.

Member interest in an LLC (http://www.thecreativeinvestor.com/residential/Encyclopedia-6.html) is considered personal property by statute. As such it is not available to satisfy a judgment creditor. You lose the case, but the best they get is a charging order against LLC (http://www.thecreativeinvestor.com/residential/Encyclopedia-6.html) income, which you can frustrate. Meanwhile, you remain owner and in control of the LLC (http://www.thecreativeinvestor.com/residential/Encyclopedia-6.html)'s assets. LLC (http://www.thecreativeinvestor.com/residential/Encyclopedia-6.html)'s are great for holding title because they protect your personal assets. They do not protect real property and leave it partitionable and subject to liens and encumbrances. Place the property into a land trust, then take title in your LLC (http://www.thecreativeinvestor.com/residential/Encyclopedia-6.html).

Both the S-corp and the LLC (http://www.thecreativeinvestor.com/residential/Encyclopedia-6.html) protect you from liabilities arising from within the company. Only the LLC (http://www.thecreativeinvestor.com/residential/Encyclopedia-6.html) protects the company from your personal liabilities.

[steve-homefree]

There are so many questions and "what ifs" about buying property subject 2.

I have always turned away from this method mostly because of the DOS clause.
But there are other issuses as well.

example: How do you get the seller to give up their rights to the property,yet they're still obligated to the mortgage? I understand that they are desparate,but still.....
How long do they normally stay on the note? 1 year? 2?
I knew a guy that did this and he would not make the payments.
If he didn't sell the house before the house was foreclosed ,oh well no skin off his back. It ruined the seller's credit.

(here's the what if)
What if your exist strategy was to flip the property with a lease option and the original seller files bankruptcy during the lease term.
Could that create some issuses with the court system concerning ownership?

thanks in advance

steve

[Jim FL]

My replies will be in RED.........

There are so many questions and "what ifs" about buying property subject 2.

I have always turned away from this method mostly because of the DOS clause.
But there are other issuses as well.

Just curious, but why does the due on sale clause scare you?
As a full time investor for a long time now, with literally HUNDREDS of subject to deals under my belt, I can tell you, I've NEVER had a loan called, and not EVER had anyone claiming they have had one called, be able to prove the note was called due to the transfer.
There might even be some folks here that make that claim, but again, after EXHAUSTIVE research on the issue, not a single loan that was claimed to have been 'called due' really was.
Some were foreclosed on alright, but due to non-performance, and/or the original barrower on the loan making a stink.
The due on sale clause, really is a non-issue.
Especially if dealt with properly.
(not like the guy above explains either, no cult mantra here, just real stuff that has been around for HUNDREDS of years.)



example: How do you get the seller to give up their rights to the property,yet they're still obligated to the mortgage? I understand that they are desparate,but still.....

How so we get the seller to give up their right?
Simple.......make an offer.
Don't try to put yourself in the sellers shoes, because unless you've been there, you cannot.
Subject to is the solution to some folks issues, and not for others.
Those who do, see no other way to solve their problem as quickly, and as efficiently as selling subject to.


How long do they normally stay on the note? 1 year? 2?

When I BUY a house subject to, there is no stop date, or time the note is left alive.
The note remains alive, until the house resells, or is refinanced, no promises or garuntees made otherwise to the seller, because not a single person in the world, can tell you 100%, what's gonna happen tommorrow.


I knew a guy that did this and he would not make the payments.
If he didn't sell the house before the house was foreclosed ,oh well no skin off his back. It ruined the seller's credit.

Okay, so now you know how NOT to conduct business.
What's the effect of this guy on you?
Should be nothing, so don't use his skewed ethics preclude you from using a method for buying property that works, and works well.


(here's the what if)
What if your exist strategy was to flip the property with a lease option and the original seller files bankruptcy during the lease term.

IF the seller files BK, AFTER you have bought the house, so what!
It is your property.
In fact, with some luck, the seller will use a sloppy attorney, or service to file BK, and include the loan(s) that are still in their names, in the BK......and get it discharged.
Then, your deal, is one with a loan, secured by the property, but NO personal liability attached to it.
A non-recourse loan in effect..........a good thing.

Could that create some issuses with the court system concerning ownership?


Some will warn you about a 'look back' with a BK.
Meaning, if the seller, sells the house, and does so to conceal, or cheat creditors who are included in the BK, the judge could order the sale reversed, and then the house sold to satisfy creditors etc.
The thing is, as long as you are a third party, and the transaction does not piggy back the BK, AND, there is not a TON of equity, there is no issue.

Heck, we've currently got over 20 properties where sellers who sold to us, later filed BK, and included their old loans.
Now, I have over 20 houses, with non-recourse loans on them, all with equity.
A nice place to be.


thanks in advance

no problem

steve

Jim FL