How To Invest With No Cash: Sub-To, BRRRR, Private Money, and Community Banks

All right. Welcome, everybody. I apologize for my tardiness to and meeting in Duluth, Minnesota, installing solar on my RV, so I can be fully self-contained in my office and is troubleshooting and lost track of time. So I apologize. Thank you guys for being patient and sticking around. Don’t have anything pre-prepared for today.
So the floor is open
on you. Look like you got something on your mind. How can we help you today?

[00:00:25] I heard some good news about you yesterday. Yeah, we got a really nice video testimonial. Megan and I did.
I know Megan’s going to be on the call today. I don’t know if she’s on yet or not, but we’re excited about that. So let’s talk about the, so that you, it was an outbound request for a past client, right? Like we discussed last week. So this was one, that’s actually still in escrow, but it’s a cash deal.
And it’s passed the inspection that, it’s just a matter of a few days, a bit closing. And so she’s thrilled with what’s going on and. If you don’t mind share with everybody, how you approach them and request the testimonial video. Okay. Okay. So just to back up a little bit, this was a, it came to me from an attorney and the attorneys in Phoenix.
The client is in Phoenix, but the house was in Tucson. And so I, I brought in my partner, Megan muse who’s in Tucson and we worked on this together, although Megan had the lead. So once we got to this point, I was talking to Megan about it. I said I’d really like to get a video testimonial. And she goes, oh yeah let’s try.
So we got Carol on the phone and just, I said to her, Carol, thank you so much for all the kinds of things that you have said about our work to Megan and the attorney, Libby banks. And I said, I really appreciate that. She goes, oh, every word she’s, she’s just really nice.
And I said I’ve got a favorite ask. Would you mind giving us a testimonial on video? I know a lot of people don’t like to go on video, but it would be really valuable to us if you would be willing to do that, she goes, oh, I’m on zoom all the time. I’m very comfortable with video. Sure. I’d be happy to do that.
So she said, just give me a couple of days. And so we got it. And then I was thrilled. I edited it down a little bit. Cause it was a tad long, so I cut about 30 seconds off it and got it down to 90 seconds. I’m really happy with it. Yeah.

[00:02:22] And what have you done with it so far? What’s your intention?
I’ve put it on our Facebook business page, desert probate team. I put it on YouTube on our YouTube channel. I put it on IgE TV and the Instagram good platform. Do you have a Google my business? I’m working on that right now. Because as a new company, we couldn’t actually set that up until we had a review.
So once I got the video testimonial, I thought that was all that they needed, but they actually need a link to go out to the person and they type it out and type out the review. So I sent Carol a link yesterday, so that’s great. And then you can upload her video to your Google, my business page.
Like anytime somebody finds your business, they’ll be able to watch that video. Have her leave the actual Google review and then get a graphic designer. You can throw it into, Adobe Spark or into the other one that Canva and just take, make a quotation, like a graphic image of the testimonial.
Okay. Cut out a snippet and put like the best quote from the testimonial and put that with your brand, like with your logo and your website, but that in your Google, my business photos. So you’ll have photos, videos, at least one five-star review, and then you can start to build that, but this is how we can use one single testimonial in many different ways across different mediums to get, to broaden our surface.
Great job taking the challenge and getting that done in a week. That’s awesome. Yeah. Yeah.

[00:03:47]The other thing that is coming along is our Phoenix life transitions Facebook group. At this point, we have three speakers lined up or three people who I’m going to interview. And those are from your vendor team, right? They’re from the community. So the first one is actually the attorney who gave us the referral. we’re going to be talking to her first state planning attorney.
And then the second one is a grief specialist with the mortuary. And cemetery. So I didn’t even know that they had grief specialists at the mortuary. So the owner of the mortuary is going to interview with me also in the future, but she’s busy at this point. So she said, why don’t you, why don’t you interview my grief specialists first? So great. We’re going to do that. And then the one, after that, we’re going to be interviewing a social worker who works for a law firm.
I had never met a social worker who worked for a law firm. Me either. Yeah. Usually, social workers when I come across some, they work for a government agency or they work for a big medical group, like an atrium. Yeah. What’s that person’s main role. I mean, are they value adds or for an estate planning firm?
He’s a very nice guy. He cares about people. He wants to help them, but he’s in many ways, he’s just a marketer for them. He’s out there, he’s talking to people and he does a lot with the Arizona long-term care system. He knows all about how to help people get the care that their loved ones need without breaking the bank, with preserving some of that capital for the survivors.

[00:05:19]That’s an amazing resource for you to bring to that group. Most folks. And unfortunately, a close friend of mine had, we had to have this conversation last night and some tactics for, avoiding having to liquidate assets to cover long-term care. And what do you do when you waited too long and it’s, or it’s, it happens in your fifties, late fifties, or sixties.
So a lot of people don’t have access to that resource. So really shine a light on that one and say, what can people do if they’re listening to this? And they’re 40, what about 50? What about 60? What about 70? Because at those milestones, you have to use different strategies.
I paid for long-term care in my thirties, so I’m set like I pay a very low premium because I’m statistically low risk. However, with Grant’s mother, she’s in her sixties already and just had a small stroke. So for us to get a whole life premium for her is going to be outlandish, right. it’s probably not even going to make sense that we’re going to, where we need to go a different route. And I’ve learned this through attorneys and specialists like wealth planning specialists, but there’s, there is a very small handful and in most markets in most major cities, so great job finding that person that understands how to navigate that because, we talk a lot about probate here, but especially for you in your market where you struggle because of the competition in probate, getting you upstream of that and like avoiding the probate is the highest service you can provide.
Everybody else is harassing them. you’ve got the right people coming to the table. That’s awesome, Ronald. Yeah. So this law firm is actually really interesting. It’s a big firm. They’ve got offices in three different cities here in the Phoenix valley and about 30 attorneys in total and five of them in their elder law.
Department. And so I had lunch with this social worker last week. We’re going to have lunch again on Thursday. So I was probing him a little bit about these attorneys. I S I said, so do all five of these guys do trusts and wills and probate. And they said no. We have one who does trusts and wills.
We have another who does conservatorship and guardianship. And then we have three who are, we’re all working with the Arizona long term. System. And I was like, wow, that’s pretty amazing. Yeah. That’s amazing. So you have three really high values, zoom calls coming up. Oh yeah. Yeah, for sure. Yeah. Yeah. I want to close the loop on this for anyone who wasn’t on the call. I think it was two weeks ago. The idea we’re discussing is especially in competitive markets where your direct mail marketing and your outbound calling, just isn’t getting you on the getting you to make contact the idea.
And the challenge was to actually start a community resource Facebook group. And you said yours was Phoenix’s life transitions. So think about the scope of it that is much larger than probate. We want it to capture people who are facing long-term care decisions, who are facing guardianship situations, who are facing death.
And after that, either probate or a trust but actually helping them in any and every aspect of that aging and dying phase. So that’s what we’re discussing. So he’s established a group he’s reached out to the vendors that he already has relationships with and is asking them, Hey, can you come to my group and provide value?
So my group can provide more value to you in the form of referrals and we’re earning that or earning those future referrals. So that’s the idea we’re discussing. And you’ve got some, you went right to the top of the scale value-wise. You could have had an estate sale company. And the reason I chose that is everybody knows what they do.
You don’t really need to have an hour-long conversation about it, but the will of the people you’re bringing to the table is really unique and that should help you build your audience rapidly. It shouldn’t get shared around and really be worth your time. The probate attorney is very excited about it and they said, yeah, we’re going to promote this really hard to our group.
We’ll have an audience for that. The very first one. That’s the first one is when I was a little bit more concerned. Yeah. And then and then we should have an audience. We should be able to build an audience for the other two as well. The but I wanted to mention to you a little bit more about this law firm, because most of the probate attorneys in our area, they’re only doing a couple of probate cases per month.
When you look at the number of PR accounts on the spreadsheet comes out. But they, the guy from this law firm who does the probates did 22 in April. Wow. Yeah. So I was talking to Daniel A. a Little bit about that and he goes well, I think they’ve got three people there. They can have up to three people on their list.
So I don’t know if they’ve got room for a third one right now or not, but he’s gonna introduce me to him and see if I can get onto that list of three. Which would be awesome. I think there’ll be plenty of room on it. Once you kick the other guy’s ass off. I just sent Daniel that the video of Carol this morning.
So I haven’t heard back when he saw it, but it was a very good video. So that’s awesome. Yeah. Yeah.

[00:10:11] Donna, I want to come back to you because we had to abruptly end cause I had a hard stop last week.
Do you have a mic? I do. Yeah. Okay. Yes. A refresher, gosh. And last week about C Corp versus S Corp versus LLC and having a, a big, giant portfolio, corporate structure versus a simple structure that could start, you could start and grow into. And I’m curious how the comp my suggestion was that you actually, meet with your potential partner and kind of talk about putting a toe in before jumping in with both feet. Did you have that conversation? Did you gain any more clarity or get other advice this week? I had it. I had it that same day. I don’t wait. So I had that same day. The challenge is one of my partners is in California, the two of them work full-time jobs while they’re trying to do this.
So I have to work around their schedule. So we discussed it individually and then we’re meeting tomorrow. The one is going to be on zoom and the other one’s going to be at my house and we’re going to do it together, the three of us. I actually make an agenda for the meeting I told them and stuff to think about already. The one that’s here with me, we both got our LLCs. They’re all approved on Friday. We both got them done and I just have to get my EIN in my Arizona state tax ID, whatever, and open my bank account, but that’s done.

[00:11:30] I did find I listened to a bunch of sub-to stuff from that Chris Prefontaine or whatever that you, yeah, that was awesome.
Like information. So I got my head was spinning all night long. I get, think about all this. That was such a cool thing to be able to help people like that. The top tactics that you’ll use in the next three years, the only thing is I don’t understand is how I actually make money doing it. Is it like an option many or an assignment, many kinds of like things that you do? I wouldn’t. So just ethically, I don’t assign sub-to deals on a lot of people do. And a lot of people make a lot of money, but if I look you in the eye and say, you’ve got my word, I will pay this mortgage.
then I’m going to hold on to that because if I wholesale a sub-to, and then that person doesn’t care and they quit making payments, then that comes back to me and my reputation and my legal liability. So I think that, and I’m really conservative when it comes to this. I don’t know anyone who’s ever been caught in this, but I’ve just not been willing to take the risk.
And so what I do with the sub-to is I will I’ll purchase it with the lien in place. I’ll put a third-party servicing company in place to auto-draft from my business checking account into the server. I get authorization to release and we connect it directly. So it’s on auto. I auto-pay. And then the servicer sends a letter and an email to me and the original seller.
So in that scenario, like where I use sub-to is when I want to stay in it as a long-term buy and hold because you’re essentially getting a free house. So your paydays are typically a lot of times your monthly cash flow will be thin, but as long as it’s not costing you money, the tenant is paying that off.
Inflation is paying down the debt. In addition to the principal pay down. And eventually, you turn that house into a piggy bank by getting a home equity line of credit. like, I use first citizens bank for my HELOCs because if you have over a seven 50 credit score, they’ll give you a 90 LTV on the appraisal.
So you can get, you can turn out and turn the house into a piggy bank. So that’s typically how I use it. Is, get yourself into it, get yourself a really good tenant. But you could also turn it into an Airbnb and do short-term rentals. And that’s where if you buy a house sub two and you fully furnish it and turn it into a corporate rental or you fully furnish it at a higher level and turn it into an Airbnb, then your margin, we really huge, you can make a deal that other landlord would go Donna’s a damn fool. Why would she buy that for a rental? But because your rental strategy is different, you can get a lot more money. If it’s more than five. You can do things like there’s a company called pad split where they’ll actually master lease the house from you on a 10-year lease.
And then they do all of the rental management for short-term tenants. And a lot of times we’ll come up with students traveling nurses. You can go on traveling nurses.com and a few other sites go to court furniture, fully furnished the house, and pay for it and installments. So you don’t have to come out of pocket 50 grand, for a $2,000 a month, he can fully, or less than that, you can fully furnish the house and then rent it out as a short-term rental with all utilities and everything.
So there are things like that with a sub to where you basically end up with a free house, no dollars into it. And you can make anywhere from a couple of hundred bucks. So a couple of thousand bucks a month and never have a dime out of pocket. So you don’t think you, you don’t usually find that they need repair though, and you need to clean it up or remodel.
And what Chris Prefontaine will teach you is you need to, it’s like gymnastics. You need to spot your landing before you get there. So the reason the cat always on its feet is because if you look its eyes always connect with the land. And real estate investing is really the same way.
The people who just jump without knowing where they’re going to land or what their exit strategy is. A lot of times, those are the ones that get their assets handed to them, and they get really bad surprises in their career. Real estate investors who buy with the disposition strategy in mind are the ones who typically make the largest gains.
So you have to look at it and say, okay, in this neighborhood, if I buy this house sub-to, it’s not going to be an Airbnb. Will it paper as holy shit, this one’s on a golf course and it’s pristine. They just bought it. Last year. Husband got laid off, wife, got a job transfer. They’re moving to Atlanta.
We got to get them out of this house. So then you’ve got the house perfectly cared and kept for, and they’ll walk away. It is broom swept when you walk in. So sub-to as far as condition goes, I think in Roanoke, sub-tos are in better condition than retail houses. Most of them. Wow. Okay. Yeah, we just invested in uh, we did a training with MashVisor: it’s called and it was recommended to us and they actually will figure it out the area all across the country, actually not just Arizona of what is what’s a good rental area.
It’s got a heat map on there that tells you what their good rental is and, it shows you five-year history. And then it shows it compares it to an Airbnb too. So you can see which one might be better and where you get the higher rents and stuff like that. From the program, it’s all day long was like $690 for the year and unlimited whatever.
And so it says my friend, friends in California, we don’t mind investing in other areas as well. So we thought we would look into that concept. Absolutely. It’s a really good idea, but I just um, there’s so my head’s spinning from all that.

Meeting [00:16:55] And I went on AZ REIA um, meeting last night.
with Tucson. And my head was spinning after that, like two hours of that, and the guy could be an auctioneer. You talk so fast. So it was doing market updates. He was doing all the different things and then everybody did their wants and needs at the end.
And then they offered a special class on wholesaling that this guy, Michael out of Tucson’s supposed to be phenomenal at it. And he’s not like cutthroat kind of wholesaling because I was telling you, the other reason I wanted to do it is that it would give us a cash flow. Cause I don’t really have the extra cash to be doing this right now.
So I thought it would build some cash for me. And then not that I can’t get some hard money loans and stuff, but it would be good to build in some cash for us. And then. And then do other things really. I don’t, that’s going to be not my main thing for sure, but I like to learn how, and it’s with 10 bucks to take the car, it’s, it’ll be worth it.
And the guy is a pro at it, and he’s, he says he’s finding them properties like right-left. So I thought well, I don’t have his finding him. Yeah. For 10 dollars, it’s going to be a fine investment.

[00:17:57]One of the things that I do want you to think about because you’re at, you’re in the right mode right now for these types of suggestions.
I didn’t like wholesaling. I built my career within hot, high dollar, ski front beach, front, and I was negotiating the price upon millionaires. And then all of a sudden I was negotiating the price down on this. What was the only thing they owned? It was all that. Yeah. And I just, I didn’t like that.
It wasn’t, and it was very competitive like it, and especially in Arizona, it’s a super competitive tactic. One of the other things you can do you can actually, step in and buy these houses with the owner, like focus on homes with a hundred percent equity free and clear focus on ones that have equity, pull a high equity list, and take them sub-to and then just turn around and go refinance it.
And the commercial arm of a community bank they’ll a lot of times they’ll go to 80 or 85 LTV. So if they only have 50% LTV left to pay off, or let’s say 60, so they let’s say it’s a 200,000, a hundred thousand dollar house, they owe 60 grand. You can buy the house sub-to for 60 grand, go to the bank, refinance it for 80 and use may 20,000 in cash.
But guess what It’s not income. So are you paying income tax on a home equity line of credit? No. So if you would have wholesaled that for $20,000, how much of that would you have kept maybe 15, but here, in this case, you get the whole 20 and you get the write-off the interest because it’s a business asset and that’s your home equity line.
It’s an equity line against the business asset. So there are things like that you can do. You can wholesale smarter, or you can raise cash smarter. So in that scenario, you still control the asset. You got the cash and now you can take that cash to the next deal. Tax-free and you don’t have this outstanding tax liability hanging over your head.
understanding real estate finance can oftentimes help you beat the shit out of your competition because they’re a one-trick pony, right? They have one arrow in their quiver, right? The low ball cash offer, take it or leave it. It’s a numbers game. If you say no, that’s 99 more till I get it. Yes. And that’s the mindset of a lot of the people you’re competing within the wholesale space, where if you come into it with creative solutions, like what you’re hearing from Chris Prefontaine and what I just laid out, you don’t really have any competition
very few people are having that conversation with sellers.

[00:20:20] My biggest deal is I don’t have a lot of cash right now, or a line of carrots. Do you know what I mean? To that? I could probably get, you’re going to gain control of the house with no money.
Then you go refinance the house, pay off the original note with your refi. What I’m proposing is a way for you to raise cash, but without competing as a wholesaler, so you can go, you actually buy the house subject to with the note. And that note has, is a lower LTV than what you’d know as possible. So if you’re buying it a undervalue, you’re buying, you’re basically buying the house for the note price, the house is worth more than the note.
You just need to go to a community bank to do a cash-out refi, and you walk away with cash in the form of debt. You put a tenant in the house to start paying it off, or you put it on the market and you’ve got some cash in your pocket. Do you have to season that? So you have to wait six months right from the total trip.
Usually not, if it’s Fannie Mae you will be taken out the original lender with the cash-out refi. So it wouldn’t matter. And that lender there’s usually no prepayment community bank loans like that. Okay. Awesome. So, And I know that that’s kind of an advanced tactic. If you find yourself in the hot seat and you need help structuring a deal, please just reach out to us.
And I’ll even get on zoom with sellers and people, and they’re like, all right, let’s see how we can do this. I haven’t gotten it, I haven’t looked at the land trust situation either. As you said, I did that. I haven’t looked up to that’s. My next thing to look into is what does that look like here in Arizona?
I don’t know if it’s the same as what you’re used to or not. So I wanted to look into that too, because

[00:22:01] I have an appointment with Anderson. Cause I have it as part of my coaching program with Ren coming up Thursday. And I’m going to ask them that whole question again, more detail about the C Corp.
Why would you say a C-corp? Why would you do this? Why can’t I do this and do a land? And what does that look like? The other thing, so you’ve already set up an LLC and I commend you on taking action on all of this stuff. Like you just go do it. You’re like, I don’t wait. I go do it. I love that.
Yeah. The other thing, the other question you want to ask them is why would I not use my LLC and take the escort designation, for IRS purposes? So you get all of the protection of illegal protection of an LLC, but you get all the tax benefits of an S-corporation and those benefits normally, that pretty much comes up above $140,000 in revenue, but you’re thinking big and you’re thinking long term.
So typically, and that’s what I do. So I do LLCs designated as escorts for tax purposes, and I think it’s the best. And then within that container, You have an umbrella insurance policy over you as a person, you have a corporate veil of the LLC. You have the tax benefits of the S-corp and then the assets are actually held and individual land trust.
So you have complete anonymity, but if anyone ever does find out what, who, where you’re all crushed, they’ll hit the corporate veil of the LLC before it gets through to you. And if it ever gets to you, you’ve got an umbrella policy. And if you really gain, if you get above, I’m going to say, when you get about 5 million in net worth, then you want to go ahead and start moving your assets offshore.
And to either a balloon cook Islander nevus. That’s a little, definitely over my head oh my gosh. Okay. But I like to know it advanced that’s cool would in my head now. Cool. Thank you so much. I’m still trying to start the whole thing with the girls, with a team of, wow, we’re going to do this and financially, and my daughter was saying maybe you need to do 50% to you.
And then they each get 24 hours. Somebody else just told me twenty-five to each one of them right now, because they come to the table with all the, most of the knowledge, the real estate knowledge and they don’t. And what does that look like with them? Cause I mentioned doing a marketing fee, as we talked about, putting in the pot for mark because I’m not going to walk away.
If I reach out. If I get a deal I’m not walking away at all. My goal is to get them one way or the other subject to cash out, or put in retail, my own job, my goal is to get the deal period. So, Donna, I would suggest some key points that the primary points of this NEC meeting, when you guys all get together are everyone should be able to write their value statement or a value outline here, all the things that I can do to bring value to this team and this partnership or this joint venture, whatever you want to call it.
Okay. That’s a great way to call it. Value outline. I like that. So let’s say what we’re good at. What we. What we love to do let’s say that the things that we’re really good at and that we like to do, and the things we’re good at that we don’t necessarily like to do. And if there’s overlap where if this person is good at that and likes it, and this person is not, they’re good at it, but they don’t like it.
Then you move that over. But at the end of that meeting, the idea was you would have, three columns and like these are the roles and responsibilities of each person. And you basically wait that you distribute your equity based on the value that’s being brought to the table.
Going into a partnership saying, I got all the experience, but you’re pretty, and you’ve got more time off than I do. You can do it. That’s where it often backfires. So don’t be arbitrary about equity distribution, whether it’s on one deal or it’s on the operating agreement, make sure you’re getting what you’re worth, your relative percentage, and the same for them, but go it.
And the next thing, the next key point is expectations. So what has to happen here? For you to say, this was one of the smartest decisions you’ve ever made. What do you expect from this? Is it a dollar amount? Is it the prestige of being able to stay real estate and like driving your friends, buy them and like out when a third of that one what is the driving?
What are their expectations? What are their motivations? And to see, and this is all this is going to do is shine a light on it. It’s going to highlight any weak points or anyone. Who’s not going to carry their weight early in the process, but establishing like roles and responsibilities expectations. And then ultimately bring that to a close by saying, all right, guys, what is our thesis?
And what I mean by that is there are a lot of different ways we can buy houses, but the way we sell them is what’s most important at the beginning of forming a partnership. So are we long-term buyers? Are we fix and flip? Are we wholesale? Are we short-term rental buy and hold? What is our exit strategy?
Because the bigger this gets and the more successful we are. The more of a problem that will be if we’re not clear on it from the beginning. So bring it all to a close and I’m like, okay, so we are buy and hold investors. So that means we can do these strategies, which fit the buy and hold this position.
That, that model, or now we’re fixing flip. And then there’s a whole different set of inventories. Doing this will help show who is who’s committed to doing what, and also that the agreement that you come to, I hope you start with a joint venture or something dipping your toe in, not jumping in with both feet, but in that agreement, you should define roles and responsibilities.
And what, when, what happens if some, if one person doesn’t live up to that and put some teeth in that joint venture agreement, because it is a trial run, right? Like it’s a test, right? If someone says Hey, I’ll do the direct mail marketing. I’ll go on. I’ll make all the phone calls and I’ll go to the appointments.
Okay, great. If they’re not doing it if you ended up having them do that deal was landed off of your phone call. You went on the appointment, you signed the contract, and then is she still do her part? And that’s only for you guys to answer nobody on it. You have to figure out what that that the roles and responsibilities, but those are the major things.
I want you to walk away from that being really clear on otherwise I want you to pay them really well. It’s 10 99 contractors, that conversation. Okay. All right. Sounds good. Thank you so much. Sure. Thanks for coming back, Donna. If anyone else has a venture with other investors that I’ll ever partner to deal with, if you have stories you’d like to share, please step in I’ve only done a handful.
I would. That’s why I’m suggesting you think if you maintain the energy and the attitude you have right now, you don’t need partners. You’ll kick the ass off anyone in your way. Like you, you got a really good, you’ve got good momentum and good energy and you’re here smiling and getting it done. So if you keep that up you need contractors yeah,

[00:28:46] Um, Scott has a meeting tomorrow. Scott, you still here?
I’m on mute. Yeah, there you are. So you got an appointment coming up and it’s probate that you got referred to you? Not, not an outbound effort, actually was marketing a listing and they opted in on one of my sites and follow it up with them and talk to them. And it happened to be a probate.
I didn’t know it when I had originally called them, but now I’m finding out more information. So I took the certification class, several months ago and I have conflicting meetings with your zoom calls and stuff. So I’m trying to catch up on maybe uh, an agenda of what I should really do when I meet with them.
Have you got some time this evening? Just two or three hours? Absolutely. What I would recommend is to start at the beginning of session three go through up until you hit the role-play, skip that and then go through the last 30 minutes.
The appointment and that’s combined is probably about two and a half hours. It’s probatemastery.com. Have you signed up as alumni? So you have access to the new digital court? I’m pretty sure. Cause I’ve talked to your reps about starting this in my county.
Now just to be clear, I sold my shares in all the leads. This phone call has nothing at all to do with all the leads. This is probate mastery. So I took the intellectual property and went the education route. So if you’re talking to their support team it’s independent of us. If you haven’t already go to probatemastery.com and that’s where you’ll find the digital course.
So go through the modules. The initial conversation and on the appointment. And I think that’s going to give you just about everything you need and it’s if you go through that and you’re like, oh man, I have really specific questions. You can email support@probatemastery.com and we’ll try to get you the answers you need before you go.
What time is your appointment tomorrow? 4:00 PM. Pacific time. So I’ve got, yeah, so we’ve got that. So go through that. You go through that, the seasoning login to its course.probatemastery.com will get you to your login and go through that session three. It’ll be a good refresher for you and you’ll be clear on what you need to do tomorrow.
And if you’re not just email us, let us know. And I’ll find a slot to give you a call. I appreciate that. Thanks very much. Yup. Elle had said, please map out the process of subject-to and send it to me. Okay. I will email you a rundown on subject-to real estate investing. And L also she’s holding me accountable here.
She said she tried reaching out, but it’s almost impossible. At least it’s not impossible, almost impossible. If you guys email support@probatemastery.com, they have a link to my calendar. It oftentimes is full, but I apologize. I wish there were more of me.
Yes, sir.

[00:31:35]Yes. Can I ask a question? You can. Go ahead. I recently inherited my mother’s house. She passed away a year in November and this, my brother, myself, and I are the executor on the estate. And I was interested in doing that. Burr meant that as well, that you just talked about it’s a reverse mortgage and you got a short window on those, but you can do it.
Yeah. I’ve extended and gamble time and okay. When’s your, when’s note due? They haven’t given me a date. Okay. Do you, do your siblings want to do this with you or would you be buying it from the estate? I’d be buying it from this state myself. It’s just me and my. Okay. And is he in agreement with it?
Does he want cash or is he, is it doesn’t have equity as a better question for me to ask? He’s going to get cash outback. Okay. So you do have the cash to give him once I sell the house seat, once I sell it and probably do the refinancing, I don’t have the cash to buy the house right now. I’m waiting on a $95k deal to close on the wholesale.
And I’ve got a pretty big deal. So I get sub-to the title, hospital title is going to transfer, so he is supposed to be on title. So he’s going to have to sign away his rights to the house and trust you that you’re going to, you’re going to extend the bridge to him later. When you get them when you sell the house or close your wholesale deal, can you accomplish that as he, you guys have a really good relationship?
It’s not. He’s going to have to sign. I agree that this is going from our parents to my brother and I get nothing. And you can have a promissory note. That, or you can give him a second mortgage. But he needs to understand is his risk. If you screw up and the reverse mortgage lender, forecloses, he’s going to get wiped out.
So you just haven’t needed to have a real fricking honest conversation with him and say, listen, we’ve got a 90-day window for me to do my magic. I need you to trust me. It needs to be titled to me only. You can go in the second lien position as the lien holder and I’ll sign a promissory note with a personal guarantee, just to show you that no way am I trying to screw you?
I just, this is the only way I can do this deal until that 95 grand comes in and you got my word. When I get my 95 grand, I’ll pay, you’ll pay the second off. You can release the lien and we’ll be out of the deal. Same as me buying the house from you. I just need you to trust me and wait a little while for the money.
And I’ll pay you interest for that. And do it that way

[00:34:00]to do the BRRRR method, your credit has to be in good standing. It depends if you have a relationship with a community bank and what I mean by community bank, for me, there are these small banks that have eight or 10 branches that are usually between two and $5 billion in assets.
And they have very light REO on their books. And I w I’m trying to remember the resource. I look at the back end. The reporting data that the banks have to report to the FBI, see and see how healthy they are. Then I pick one. But those banks, have to lend money.
That’s their business. So if it’s an, in that, in the commercial side of the bank, it’s asset-based lending, not personal credit-based lending. So they’re going to look at the house, how much it can rent for an underwrite based on the asset, not on your credit history. Now, if you have really good credit, they’re going to give you, they’re going to throw better rates and terms at you.
Like they’ll give me 85 LTV without on a cash-out refi without even seeing the house or knowing where the money is going. So I’ve bought houses before for 12, 13 grand. And then I would have walked away from a closing table with 60, $70,000 check, which you can’t do in residential real estate and residential lending, but you can in commercial lending.
So that’s why I tell you to go to the commercial side. Hell, they’re quoting me rates like 3.8, 3% on a 20-year amortization. Like commercial money is cheap as hell right now. It’s more than residential, but it’s still really inexpensive money. So find that bank and you probably have one at nine, go in, and do you have cash in and what, where do you bank now?
Are you banking with a big bank, small bank, a small bank located in Walmart? Okay. Heard of it. Yeah. I don’t think you’re going to get much done with them. I would look at, so what I do and rather than ask you really private questions in front of everybody, what I did when I moved around Oak, I knew no bankers knew nothing, but I knew I wanted to have a clear finance strategy in place.
Before I started meeting with sellers, I took $20,000 and put 10,000 in one bank and 10,000 and another. And then as soon as the, as soon as they handed me my deposit receipt, I said, great, can I meet with the president of the bank please? Or the president of commercial lending at the bank? And they were like yeah, let me go get it.
And I went from that office to the commercial lenders’ office and I sat down and I said, all right, let’s underwrite me. Let’s say this is a hundred thousand dollars house. I’m buying it for 60,000 bucks. It needs 20,000 and rehab. What can we do? I just gave you enough lending power that you can loan that money back to me based on the deposit that I just put in your back.
And we both know that’s true. And they were just like, who the hell are you? I’m like, I’m a new guy. But the truth is they’re getting nine to one leverage on every dollar you put in a deposit account. So one of the best ways to open up lend ability at a community bank is to give them the posit funds.
And you can also do it as a CD. If you want to get really creative and you’ve got it, I wouldn’t just walk in and try this until you really understand it. It’s a pretty bold move, but we’ve walked into banks in the Midwest and said, Hey, listen, we just, we’re going to put this a million dollars into a CD, a certificate of deposit a six month CD.
What we want to occur. Is a $2 million line of credit based on our $1 million deposit account. And then you have the business bank account as a million bucks in it. They’ll give you 2 million on a commercial line of credit. You go buy the apartment building and then they’re trying to please you because they want to refinance that apartment building in 12 months, when you’re done with your CapEx, you can scale those numbers down and do the same thing on a house.
You can take 10,000 bucks and put it on a six-month CD and then say, okay, cool. I’d like $30,000 in cash on a line of credit. And that way it’s even if you have. Not so good credit. You’re just like, I tell you if you want to build a strong relationship with an attorney, walk in the door with a referral.
If you want money from the bank, walk-in, walk the walk through the door with money. The difference is they have a lot more leverage on that money than you do. So if you give them a hundred bucks, they can loan you a thousand bucks. And a lot of people don’t think about it that way, but, and you might walk into three banks and think that Chad’s full of shit.
Those guys shut me down. But when you walk into the right bank there, you want, we’re really going to help you with this. We’re excited to start this relationship and then you’ll know you’re in the right bank. So it’s sometimes, you know, just like the real estate industry or any other industry. Like A lot of people are in that position because.
They’re just not very good at their jobs, their loan officers making a little bit of money and it’s comfortable. And they took the safe route, but every once in a while, you’ll meet a guy in a community bank that wants to run that damn thing. And he’ll be, he’s not a really good lender that will really bend over backward to help you execute on your strategy.
He’ll be your finance partner. And that’s what you’re looking for. That’s one of those classes I want to do like a community bank finance class. Cause I’ve never seen anyone do that. And everyone tells me I’m wrong. Everyone says you can’t do it. I’ve done it in multiple markets. At 26 years old, I raised $42 million from four community banks.
And two days I knew nothing, but I went in, I sat in the lobby and I said, I’m here to see the president when he’s ready. And I got 42 million bucks and saved the privates. And that was in 2000. To save a condo project. And Noah Brown was working for, was sitting on them, your hands. And I’m like, I gotta get paid, man.
So I just went and found the money myself. So don’t listen to a lot of the advice you hear about using banks for real estate investing, because a lot of people are just spreading false. You can absolutely, even if your credit sucked, you can still use community banks, the commercial side, and you can have a hundred mortgages with one bank.
If you want. I’ve had, I’ve helped guys build portfolios. Eric had as many of the 158 houses under one commercial blanket lane, and we were able to get partial releases and put, add houses, take houses away. But one bank loan, one guy enough money to have 158 houses. And it was only about a three and a half billion dollar bank, but they were aggressive.
And Kathy was one of those lenders that want to run that damn thing. One of these days she was eager to lend the money. So if you have community bankers that are coming to your REIA meeting, like if they show up at the real estate investors association, that’s a pretty good indication that they’re thinking differently.
If, if you meet him rotary, it’s one thing, they’re looking to finance the damn tire store down on the corner and try to do inventory and, goods. And that’s not the commercial lender. You’re looking for it. You’re looking for the one that understands real estate investing sees housing as an asset class, with the least less risk than a small business or anything else they’re loaning on, not your guy or gal at some of the best commercial lenders I’ve ever met or female by Kathy.
The one I was just talking about, and unfortunately I’ve had to deal with those lenders also and distress situations when investors. Scaled too quickly, ran out of cash, got a vacancy, and credit loss. And the whole damn thing came tumbling down. Having that relationship with that bank, I was the only thing between him and losing everything he had ever had because I was able to go in and talk to the banker as a human and say, listen, let me make this a controlled fall for everybody.
I’ll find a buyer cash buyer, no contingencies. I’ll get you out of the portfolio with a short sale. And I’ll build social capital at that bank for sure. Cause I probably saved them a $3 million loss, but that’s the kind of bankers you’re looking for. The ones that really are and single-family rentals.
And there’ll be no multi-family too, but if they’ve already got experienced in single-family, they’ll they won’t try to shoo you away. I’m like, no, we don’t do that. Okay.

[00:41:40]But back to your deal. So it’s in whose name, whose title how’s the title held right now. Only yes. W FHA reverses mortgage. Okay.
And you’re getting letters already from the servicer or the mortgage or saying you, you owe us, we’re calling the note. Okay. Yes. Do you mean the pay-off statement? Yeah. What date was the house vacated? Last November.
No, I’m sorry. I’m sorry. It was March this past March? Yeah. It was March. My brother was living in. Yeah, that doesn’t count. Your mother left in November. She died in November. Yes. Okay. So they can call the note right now. This is really dangerous. If you were asking me this question in December, I’d be like, Hey man, you got at least a three-month window where you can get yourself into it, get a tenant in place and then go to the bank and refi yourself out, pay your brother off.
You could do it right now though. You need to understand your exposure is if you close if you take that sub to and you close and they call the note, they can recover the asset. Now you’re really not out anything other than what equity would be in the home. And you’re not going to lose your own cash on it, whatever you paid closing costs, but it’s probably not the right strategy.
What I would recommend is to go find yourself a private lender for this one. You want to hold it long-term yes. I like to go to the community bank and say, here’s the deal? How much is the house worse as it sits? As he is
all fixed up, I’m thinking too. I know the way it sits today. Okay. Yeah. I would say something tops 140, 150. Count about 150 as is 150 right now. What’s the note? A 112. Okay. So we got something we work with. So if it will appraise for 150 and that bank, someone wants 15 times eight somebody quick.
If we can get you to an 80 LTV with a community bank, then we, okay. We can get you a loan of one 20 that should get that lender out. Plus your closing costs. So you could do this then your brother is you guys have to agree on a value, what you would sell it for one 50. So there’s a $30,000 spread in there.
I would give him a $15,000 second if he would accept that. And then later when you, when your wholesale deal comes through, pay him 15 grand after he releases the lien, the second mortgage does that at the attorney’s office. Like you pay off the second for 15,000 bucks. The second mortgage is released, man, you got a rental property.
Okay. So the other alternative is private lending. So you can go to, and I’m going to tell you, man, like how you’ve done deals, right? Like you’ve done some deals in real estate. Yes. Dress nicer than the dentist. If you can’t find private money, just take a day and drive to every fucking dentist office, you can find in the city and say, Hey man, my investors make an eight to 15% yield and I will never I’ll bend over backward to make sure that you can achieve that.
I’m sure you have a lot of questions. Can you come to the zoom call tomorrow night, walk away, go to the next dentist office, go to the next one, go to the next one, go to the next one, get five or six dentists on there and do, a discovery call of what your new private money program is and say, here’s the deal.
Here’s what we’re doing. We’re buying these houses. Here’s our strategy. This is what we’re going to do. I actually have one on deck that I need to find right now. That one is pretty close to me because my mother passed away. I need to get my brother out. I don’t have a whole lot of time because of the reverse mortgage on it, or I would just go to a community bank, but yeah.
I think community bank three and a half percent line, they want to, you guys 8% who would like to place some money at an 8% return and have a hold of the first position. If I screw up, you’re going to make more money than, you’re going to make a lot of money because I’m going to ask you for a hundred and $150,000 note, and I’m going to put, this much in it and it’s $240,000 house.
So is anyone interested in this deal or do we want to talk about the next ones that are coming? And just to have a conversation, you could do it individually, but you can also get an auction mentality and get a lender, get multiple prospects, prospects on the line with you. But my point is to go to high net worth individuals who don’t have enough time to manage their own investments or self-directed retirement accounts.
They think 7% in the S and P 500 is like an amazing investment thesis is laughable, right? If I get 7%, I’m going to slap, whoever’s managing that fund. That’s terrible. That’s a failure. But you can impress the hell out of these people because you can pay them easily 10% of the money. For three or three or four months to bridge your strategy till you get through to sell it or refinance it.
And they’ll be happy because they weren’t making that elsewhere. And most of these guys will have three, $400,000 in cash just sitting. And they know that it shouldn’t be, but they haven’t said anything. And I w I, people like that, that came to me and they’re like, Hey, man, I heard you. I heard you loaned money on that deal over there.
That’s it up. And I’m like, in my head, I’m thinking you dumb ass, you got like 150 grand sitting in cash and a business account. Why not loan him the money? And it’s so what I’m saying is be assertive and putting yourself out there in front of high net worth individuals who have very busy careers, probably not an entrepreneur because we have time to self-direct and do our own investments and we’ll make more money than that.
So look at your healthcare professionals, look at legal professionals. Look at. Like really men, dentists, surgeons, attorneys, people who work a hundred hours a week and make more money than they know how to spend. There’s always a couple of hundred grand sitting in their checking account.
So do you, Lynn? I normally do right now. I have, I went pretty heavy on a few private equity deals and I’m trying to decide how much liquidity I want to keep because I’m trying to figure out what money, 2.0 is, and what’s going to happen. So I don’t have any notes out right now for the first time in a few years, just because I’m looking, I don’t know what my strategy is.
Like we printed so much damn money and there’s so much government intervention. I’m not sure what I want to do with cash. So I’ve got a bit of a dry powder fund right now, but there are probate advanced companies that as is there are, is there much value to the remainder of the estate? As their jewelry or guns or collectibles or cars.
No, the house is the boat, the life insurance? Yes. Yes. There was a big, it wasn’t a big policy. How much was it a little bit more than 15 grand? No,
I was hoping that was a way we can get your brother out of this. Yeah. Since there’s some stuff you’re not telling us, we can tell
I think that’s your strategy. Look for a private lender or go to a community bank, look for 150. If you can get it turned around and write him a check for 15 and say, listen, this is, between the difference in the mortgage and, 15 might not be the right number. I’ve crossed the numbers up in my head, but whatever his half of that would be in his mind, he might be thinking of that two 40 prices.
But you like, if you’re gonna, if you would sell the house to anyone else for one 50 as is where is, that’s, what you need to compensate him. Yvonne had asked, why am I choosing dentists? Because every dentist I know, makes between two and $500,000 a year and they work their butts off. And they think that a mutual fund is a wise investment.
And I think that’s one of the dumbest damn things in the world you could ever buy is an index fund or a mutual fund. And so they’re accredited investors. They’re viewed differently from the sec, a hundred thousand dollars. Even if the deal goes sideways, it’s not going to wreck their life.
It’s going to be like, wow, that sucks. How are we going to get it back? So that’s the main reason is they don’t have time to make better investments than they already are. It’s easy to impress them. And you get free dental work because you make the guy a lot of money. I haven’t paid for dental work in 20 and then Roger Lacey reminded me of the attack. The key used he was in a pinch and needed private money really quickly. And he had the presence of mind to go to a pawn shop. That is one of the entrepreneurs that will actually loan your money. Because they typically, have to have liquidity, otherwise they can’t buy their inventory.
So a lot of times pawnbrokers will have several hundred thousand dollars, on deck to buy gold guns, cars, trucks, boats, whatever it might be. And Roger, what was that one for? Was that for a house? Yeah, that was for a house. Can you hear me okay? Yeah. Yeah. It was that was in probate.
Two sisters were in the house and one of them wanted her money and the other one had to stay there because her boyfriend was going to jail for a year. And it was actually. And so I went to a pawnbroker and he said, what do you want me to do? I want you to buy the house and then I want you to, then I want you to turn around and sell the house.
And she will finance it. She’s going to be out of here in about a year or so. And you’ll get all of the interest on that note. If you’ll carry note four and you’ll get paid all the rest. So you’re going to get all of the interest over one or two years that, and he just sits there and he pulled out, his calculator did a quick add loan amortization, and he said, This is what I’ll pay for it.
I showed him the house and he wrote up the offer and the court-approved and boom. Both daughters love me now. And because one got her money and the other one got to sell the house. After 18 months, she made a little bit of a profit on it and was out of it.
Her boyfriend got out of jail and they moved on to Arizona. I think I’m sorry. There’s not a, it’s not a slap on Arizona, please. Don’t like it, don’t take that. But it was pretty good. It was a pretty good deal and it just turned out knocking on doors, to find some private money to get it.
And the all three attorneys, both kids had an attorney and there was the mediator involved with that because there was a lot of contention in the whole process. And I went to the mediator and I sit there and he looked at me, he said, how’d you find this? I said God gave it to me. It’s just one of those God’s thoughts, how am I going to solve this problem?
And got it done. So that was pretty, pretty exciting to get that. And one, three attorneys as a result of that. I’m sure God’s happy to take the credit, but you learn to be a transaction engineer and Roger. You’re thinking outside of the box. So that’s the big takeaway guys. I’ll show you some of this crazy stuff that I’ve done and make radical suggestions because I want you to think outside of the box, we can get a lot of good information from other investors and other coaches and our area, but oftentimes they’re regurgitating what somebody taught them 20 years ago.
And that doesn’t always mean it’s the only way. So really think about, think outside of the box, when it comes to financing and you’ll have far less competition because you’ll find the ways to put deals together that other people are like that’s you, that person’s really, if he buys that and you can make tons of money like I’ve bought houses a lot.
Like for example, I bought one for instead of wholesaling it I bought it for 70,000 bucks. I took a $70,000 down payment carried a 10%, a 10% note for one. On the last $10,000, I made more on that than I ever would have to wholesale it. And it was actually, it was, it transferred after 13 months.
So it was a capital gain, not earned income. And there are little things like this. If you just really think about the finance side of it and how you get out of it, either profitability can go up. So much. And you want to give a big shout-out to Ron cram? Getting the beginning of the attorney, getting into the attorneys market is where I think that I’ve got to be headed on afterburner primarily because Arkansas has passed a beneficiary deed transfer on death type of operation, which takes a lot of properties out of.
Out of probate. And so I think I’m expanding my market more to not just in probate, but not just in trust, but going into the elder care the eldercare where there’s Medicaid and all kinds of help going on with families are still going to be a property at the end of that. And I think that’s the tilt that I’m going to be making more to the attorney side and.
And actually had a today I had a broadcast on the radio show with the beneficiary deed and had one of the legislatures on. And all of a sudden I get two phone calls from people that want to have me come talk to them about that. And I said I’ll be glad to talk to you about it.
And let’s talk about what the estate is. And what’s important to the family about where you’re at. And also doing a hospice add in their admissions book so that and talking to the social workers there, like you said, Ron, the social workers are really going to be a key influencer on what the family does because they’re.
They come across as very compassionate and try to help people. And that’s where I fall in it, trying to help folks get through a tough spot in their life and making transitions. And then the coolest part about it is not only what happens with the sale of the property is, but what can I help the family do?
And outside of the box, thinking that we get in some of Chad’s training, like hold the note. So it with owner financing and all of a sudden you’ve turned a little bit of money into a lot of money and it’ll be a lot better for the estate.
After the sale is as important as it is in front of the sale. A lot of people don’t want to hear that, but it’s basically punching through resistance to get to that part of the conversation. And you can tell by the look in their eye when they start going, what did you say?
And it’s just fun to see light bulbs go off when you change the paradigm of what they’re talking about and moving them forward with whatever objectives that they have in their family. For example holding a note so that you can put the kids through college, down the road.
And I said, there’s a lot of people that will buy a house today that has linoleum and Formica on it. you can really cash that in by holding the note as you go through that. And we can set you up with the loan servicers and escrow companies. That’ll take care of that for you.
Roger, thanks as always for your input. I did real quick. So Rick Griffith ask how would you suggest I find the probate attorney here in Los Angeles that is also licensed in New Mexico. haven’t had time to go look at the query tool, but I would go to findlaw.com or relo.com and use, use their query tool.
See if you can say, show me, attorneys who are licensed in this state and this state, that would be the first thing I would try. That might be the quickest way to flush it out and so filter by specialty and filter by state licensure. And that might, it’s not a relo that’s for real estate professionals.
Look for the attorney directory, find law.com has one on the other. I’m not a relo is for real estate. There’s another one that I’m not thinking about right now, but that’s probably where I would start. I don’t know how else you would do that other than just networking and asking other attorneys.
Yeah, I’m looking for the elder attorneys like Ron is doing. And I’m finding that those guys are trying to get the trust set up and but if you get into the area of elder stuff the long-term care is a part of that. And that kind of conversation comes in with using Medicaid to help out with if they’re income and asset qualified and so forth.
But yes, I will take find it findlaw.com and start focusing on who wants to be that it also helps in that with the SRS designation, because that’s just another badge that I’m carrying around with me. And they say, oh, you’re a senior’s real estate specialist also.
And I said, yes, I am. And not only that probate specialist and been in probate for five or six years, and the beneficiary deed is going to be making my market change somewhat. I have to find other ways to help. Hey, Chad, can you hear me? I can hear you. Hey, this is Rick. Thanks for that recommendation.
Does the attorney, that’s working with my client out here can’t help the client with their property in New Mexico. So that’s why I was asking. And I was trying to develop again, just trying to develop a relationship with an attorney here. Yeah. Yeah. That’d be amazing if you could find it.
Hopefully, that works. I know when I talked to Ellen about it, she said good luck with that. She said I’m looking for a unicorn, but yeah, hopefully, it works in another avenue to bring some future business in. But thank you for that. When somebody got tired of Santa Fe and decided to move to LA, you never know.
Thanks, brother. I appreciate it. Yeah. All right guys, I’m going to run, I’m sorry for all the noise and confusion. I was not supposed to be here, but installing solar in an RV is not as easy as easily set done as it is said. So I’m going to jump back to that. And hopefully next week we’ll have a prettier backdrop, but as always guys love these conversations.
Thanks so much for being here and participating. And most importantly for you guys like Donna, especially like taking action, like it’s not all a bunch of talk and she left while I complimented her. But anyway, we’ll see you guys next week. Thank you, Chad.