What is going on? Good to have you on here. Everybody that’s tuning in, what are we going to be going over today? How to fill out subject to paperwork. Because, Carl, the man, he’s got a deal right now. Carl, Congrats, man, good job. Thank you. So what we’re going to do again is how to fill out sub two paperwork. So, Carl, you’ve, you’ve been doing this for a month or two now, right? Um, like working with us, and you’ve been talking to a seller that’s in pre foreclosure, and he’s, doesn’t really know what the heck’s going on, right?
He’s, yeah, he’s, I think he’s moved out of the house, right? And he’s something that he was rehabbing a little bit, but he’s moved out and yeah, so he’s, you’ve been texting, following up with him, and pretty much you’re saying, he’s like, yeah, man, I’m ready to go right? Like, he just wants to be done with out of his name. What did he say? He’s like, I don’t need to make anything off of this. I just need to get it
exactly. Yeah. He’s like, just take it off, man.
So what do we do here? So Carl, I’ve asked you, and you know this, but you reached out to him, and you asked him for his mortgage statement, because we need to know, you know exactly what he owes when he bought it. You know what his payments are, and he’s not 100% sure what he owes. He thinks he owes around, like, 380 and his interest rate, like, those are all things that we need to know, right, right? But he’s not 100% sure. So what do we do in this situation?
Do we just wait, just wait a couple weeks until he gets the paper, like, gets the mortgage statement, or do we just proceed and fill out paperwork the best we can, knowing that we can always add addendums to contracts and, you know, fix it and just get it to the title company. They can sign a power of attorney with the title company. He can so they can find out all the information. So that’s option. One is just wait for him to figure it out. Or two, have him sign, send all the paperwork, do get the title company to figure out everything and just proceed and get the ball rolling. What do you think we should do? Carl, uh, definitely not.
Wait. Okay, I agree. So. So is this 100% a deal? We’re not 100% sure, because, according to him, 380 is what he owes. The house is worth about 500,000 we need to go in there and do our inspection to verify. We have to see what his payment is to make sure cash flows. But there seems to be quite a decent spread, and the house seems newer, so we’re gonna roll with it. Okay? And what we let these you know, the seller know is, hey, we’re planning on purchasing this. We buy it with a couple of our partners in the area, and you just need to verify everything to make sure everything works out.
That’s it, okay? Because really, this is a verify like, we gotta verify a lot of things from pre foreclosure. We gotta make sure the payments we can get the right information, catch everything up. So before we dive into the paperwork and any questions, before we break the deal down and proceed, I’m good to go. Okay, and if you guys are watching live, make sure to pay attention, because you’re going to get exactly how to fill out this information for a deal. Maybe that you don’t have all for sub two deal. Maybe you don’t have all the paperwork on I’m going to show you how to do it. So why do we wholesale this to a flipper? Why are we trying to buy this on terms? Well, Carl, the reason is because, let’s just say 500,000 is what this house is worth.
He owes 380 he says, oh, you know, I don’t need anything out of this thing. If we were to flip it, I think it’s a bigger house, right? It’s not like, it’s probably like, 2000 square feet, yes. So if we were to, if a flipper is to buy this thing, and you get hard, a hard money loan, he would put, you know, be 12% interest, two points to borrow the money, 15% down. It might take five months, for four or five months to flip it, we’ll just say five, sorry. Let’s just say four, 3% on the buyer’s commission when they end up listing it after flipping it and closing costs.
Now let’s say this house, it is a medium rehab 48,000 or if you say it needs everything, it’s going to skyrocket up, right? But just medium so, and that’s if we were to flip it ourselves, this is not with our wholesale fee, right? So it’s in the red. Somebody probably would not take, you know, you never know. There’s always buyers that are willing to do stuff, right? But it’d be a 5% return, 26k off of spending 48 and doing this. If you did it, if we wholesale this to somebody, I’m sorry, not if we wholesale, if we flipped it ourselves, it’d be 26k now, the problem with this is, you know, numbers can change pretty quickly.
You know, you could budget 48 but it could end up costing you 60 just because you might find something you don’t want as you’re rehabbing it now, you got, like, a very low return, and it’s not really worth the risk. So in order for this to be like a good wholesale deal, you’d need it like at 323, 40, and again, it’s, this is it’s not even, we’re not even at the 70% minus ARV minus rehab. We’re above that, and we’re still, it’s still not making sense, right? So if you, if you drop this down to, like, you know, the 70% of ARV you would be, let’s see, it would be a deal, of course, right? But that’s, that’s super low, and he owes more than that, right? So that’s going to be difficult to do.
So anyway, that’s why we go terms now, all this depends on the the monthly payment that he has, and, you know, the interest rate, but you know, and he’s not 100% sure, and that’s why we’re going the route. We’re going to fill out paperwork. So what do we do? Carl, step number one, I’m going to step back. Can share my show the TV screen right here. Step one, Panda doc, baby. Okay, it’s free. It’s free. Okay, so panda Doc is Docusign. Is the competition. Panda doc, we use it because it doesn’t cost any money. I don’t like spending money on stuff that I don’t have to real estate purchase contract. You have to get a standard real estate purchase contract. Now, I know a lot of people do that. Do sub two, they have, there’s so many different ways to fill out paperwork. What I do is I do a real estate purchase contract, and in the purchase price, I say, see it, see addendum.
So they see that the addendum, all, all the terms are laid out in the addendum. And number three, you prepare the addendum, and then you put it on the pan doc, and you send it to the seller? Okay, Carl, any questions on this so far? Okay, alright, pretty simple, right? Not that difficult, right? Like, what did we do? I pulled my contract that I used and battle tested, battle approved attorneys. Attorney wrote it up, and it’s withstood the test of time, and battles people trying to get out of contracts after they’ve agreed and everything. So anyway, simple real estate purchase contract, seller information, address, me or you the the address of the property C addendum. You don’t have to write term anything with terms, because it’s all going to be in the addendum.
It’s got all the, you know, the different language in the contract that makes it so you can purchase this property acceptance, I usually put NA, not applicable, because the guy’s gonna sign it or not. So I don’t really put a time, because the thing is, it’s annoying about putting like a specific time is, like, if they don’t sign it by that time, then you have to send, like, new paperwork, which is annoying. Deposit. The cool thing about the deposit is we do it after our due diligence period. Is, is, um, over. So you would in this situation, like, it doesn’t really matter until because we’re going to find a buyer, or we’re going to cancel, right? Or we’re going to tell them, hey, we we don’t have anyone to partner with. Like, this is not something we’re going to move forward with, right? So we could put, really, anything we want, 1500 probably put like 1000 bucks or no, we’ll probably do like 500 to it.
He probably is. Cool. 500 you could even do like 10 bucks, but we’ll do like 500 okay? Or we might do 100 we’ll see. So then you got closing will take place on or before, and then we just put out a month out, because it might take some time to get this paperwork figured out. Other agreements, this is the part that allows you to assign it to your buyer, buyer, assign, or otherwise transferred buyer rights to the buyer, another buyer. Then you just sign, the buyer signs, and you sign, okay, so what is the seller finance addendum? All it is is, it’s just laying out how you’re purchasing the property.
And I have, I’ve had my title company, like my escrow officer, she’s prepared a lot of this for me. I didn’t have to make all this up. I just have to change, you know, the term, like the the numbers according to what we’re buying it for in here. So it just lays out, you know, that we’re taking over the property the buyer is responsible for taxes, blah, blah, blah, blah, blah, all right, so we send this and we send it to him in panda doc, and he needs, basically, he just has to sign both. Once he signs both of these, we take it to we send it to the title company that you reached out to, if they’re investor friendly, if they’re good, and we just say, hey, here’s the signed rep seat. Here’s the denim. Can you reach out to him? He’s in pre foreclosure. He mean, you need, we need to figure out how much he owes, all that, all the juice, all the good stuff, so we can move and continue forward. So that’s, that’s what we’re going to do in this situation. What I’m going to do is we’re going to get him to sign.
As soon as that’s happened, I’m going to send you the paperwork, and you’re just going to reach out to Title Company, and you’re going to email all that information over to him, okay? And you’re going to give the contact information for the guy to the title company as well. And at this point, bro, they pretty much take care of it. Now, if they’re like my title company I usually do deals with, they’re pretty versed in subject to, so I don’t really worry too much. They tell me exactly what needs to be done. Hopefully they’re the same way. But if they’re not, then obviously we can, we can take the next step make sure everything’s ironclad. We can talk like, you know, I’m not gonna, I’m not an attorney, and I would just advise somebody that knows like subject to really well. So we’re doing it the right way. But also, the other thing is, when you when you can wholesale a deal to a buyer, also they’re pretty much buying the contract. So if you want, you know, if they want anything specific in there, they can kind of tell you, like, hey, you know what I want, this or whatever. And basically you’re just in the make sure it makes sense for both parties, right, right for the buyer. So, Carl, that’s pretty much it. Man, do you have any questions at this point?
Um, not, not at the moment, my questions tend to, uh, tend to creep up, like, later on, like, it’s almost never, like an immediate thing. I’m just, like, thinking of like, oh, but Well, I know, bro, you hit me with those questions. But that’s the amazing thing. You learn through the process of doing right. Like a lot of people will sit there and they’ll study subject to or they’ll study, like, wholesaling for years, but when you’re doing it, that’s when you really learn right, yeah, and I’m assuming you feel like that, like you’re like, Whoa. I’ve learned so much. I don’t. Uh, you tell me, have you learned a lot more in the last two, two months? And just trying to figure, yeah, no. I mean, yeah, you just like, you know, through the realistic experience of it, you’re like, oh, like, you know, it brings up questions.
And then you’re like, I wouldn’t have, like, foreseen that, or, like, been prepared for that, if I had just, like, you know, tried to prepare before actually doing it. Love it. Okay, man, well, pretty much at this point I’ll, I’ll just write up the paperwork and I’ll send it to him. You give me his information. I’ll let you know. I mean, you don’t really need to watch me fill it out unless you want to. Do you want to watch me fill it out? Yeah, okay, yeah, yeah. So that information is personal, so we’ll hop off this live. But everybody’s been watching. He found value from this please like subscribe, hit the bell icon, and we’ll see you guys on the next one. Peace, out, everybody. Oh yeah. Last thing I’ll say, join the free Facebook group if you want to learn more, because we got lot more where this is coming.
Peace, hey everybody. What’s up? It’s Nathan Payne, and for the first time ever, we just released this insane training bundle that has literally everything that I’ve learned from doing a combined 4000 deals in real estate, all from starting with absolutely no previous business background experience or any real estate experience, plus there’s over $19,000 worth of free gifts that we’re throwing in, all for an insanely low, low price. If you want to get your hands on this, be sure to click the first link on the description below. Right now.
