In the ever-evolving world of real estate investment, flexibility and innovation often pave the way to success. One such innovative strategy that has gained traction among savvy investors is the “subject to” method. This approach allows investors to acquire properties by taking over existing mortgages, offering a unique blend of flexibility, speed, and opportunity. In this blog post, we delve into the insights shared by real estate expert William Tingle, as he discusses the nuances of creative financing in his conversation with Jay Conner.
What is a “Subject To” Deal?
A “subject to” deal is a real estate transaction where the buyer takes over the seller’s existing mortgage without formally assuming the loan. In this arrangement, the mortgage remains in the seller’s name, but the purchaser takes ownership of the property and continues making the payments. This strategy often bypasses the traditional financing process, offering an intriguing solution for both buyers and sellers facing unique situations.
The Mechanics Behind the Strategy
William Tingle, an experienced investor who has completed over 500 subject-to transactions, emphasizes the simplicity and legal foundation of this approach. These deals hinge on understanding and navigating the due-on-sale clause, a standard component of mortgages since the 1980s. This clause gives lenders the option to demand full repayment if the property is sold. However, as Tingle highlights, this option is rarely exercised as long as the payments are made on time and the loan remains in good standing.
The genius lies in the practicality — investors keep the payments current, ensuring the lender rarely has a reason to call the loan due. This method allows investors like Tingle to acquire properties even when traditional financing would be cumbersome or slow.
Why Sellers Opt for “Subject To” Deals
One might wonder why a seller would agree to leave their mortgage in someone else’s hands. Tingle clears up the misconception that only desperate sellers or those in financial distress consider this route. Many sellers choose the “subject to” method for its speed and convenience. Individuals facing relocation for personal or medical reasons might opt out of the lengthy selling process to avoid holding two mortgages. Others may have unique circumstances, like preserving their credit while avoiding foreclosure, that make this an appealing solution.
The Role of Private Money
Combining subject-to strategies with private money amplifies the financial flexibility available to investors. Jay Conner points out that creative financing doesn’t end with taking over mortgages; it can extend to raising private money for property improvements or bridging the gap between acquisition and resale. This approach unlocks additional avenues for generating cash flow and leveraging opportunities in real estate markets.
Building Trust in Creative Financing
Trust and transparency form the backbone of successful subject-to transactions. William Tingle underscores the importance of clear communication with sellers. By providing reassurance through testimonials and being upfront about potential risks, investors mitigate apprehensions and lay a solid foundation for collaboration. Tingle’s business thrives on its track record and positioning as a reliable problem-solver, helping people navigate the complex landscape of real estate with confidence.
The Bottom Line
Creative financing, particularly through subject-to deals, offers an innovative path in real estate investing. For those equipped with the knowledge and creativity to harness this strategy, it can lead to lucrative opportunities and significant cash flow. William Tingle and Jay Conner’s discussion highlights the potential within this method, encouraging investors to think outside the conventional realm and explore the advantages of creative financing.
As the real estate landscape continues to evolve, strategies like these will undoubtedly play a crucial role in shaping successful investment portfolios. Whether you’re an aspiring investor or an experienced real estate professional, understanding and utilizing the subject-to method can open doors to new opportunities and growth in your real estate journey.
10 Discussion Questions from this Episode:
- How did William Tingle’s career transition from the restaurant industry to real estate influence his approach to creative financing?
- What exactly is “Sub To” (subject to), and how does it differ from traditional real estate purchasing methods?
- Why might a seller be motivated to sell their property subject to the existing note, leaving the mortgage in their name?
- Discuss the potential risks and benefits for sellers who choose to sell their homes using the subject-to method. What assurances do real estate investors like William offer to mitigate these risks?
- What types of marketing strategies does William Tingle discuss in his publication “Extreme Marketing, The Ultimate Marketing Guidebook” for attracting motivated sellers?
- How does leveraging private money in conjunction with subject-to deals create a profitable and sustainable business model for real estate investors?
- William Tingle mentions a “12 house blueprint” model in the podcast. How does this model help create passive income for real estate investors?
- How crucial is transparency and honesty in building trust with potential sellers in subject to deals, according to William Tingle’s experiences?
- What are some legal considerations and challenges that investors might face when engaging in subject-to deals, especially with the due-on-sale clause?
- How can real estate investors balance the risks of subject-to financing with potential benefits, particularly in fluctuating market conditions?
Fun facts that were revealed in the episode:
- Real Estate Adventures Abroad: William Tingle retired to Belize in 2010 but didn’t stop his real estate adventures. Even while living internationally, he continues to buy 20-25 properties a year in the U.S., showing that real estate investing can truly be a global endeavor.
- Unexpected Seller Situations: Despite common perceptions, not all sellers using creative financing methods like “subject to” deals are in desperate situations. Some choose this route for unique personal reasons, such as relocating for medical care or preventing dual mortgage payments, so it’s not just about financial distress.
- Creating Cash Flow with Low Equity: Even properties with low equity can become profitable investments using creative financing strategies. William Tingle wraps existing low-interest mortgages, which often range between 2.5% to 3.5%, and transforms them into significant cash flow opportunities, highlighting the power of financial creativity in real estate.
Timestamps:
00:01 Raising Private Without Asking For It
06:15 Struggling with Mortgage Payments
07:20 Property Sale with Retained Mortgage
11:46 Swift Real Estate Solutions Offered
16:13 Cash Buying Criteria Explained
18:24 Profitable Low-Equity House Investments
22:40 The Rise of Due on Sale Clauses
26:09 Private Lending and Second Position Strategy
27:05 Creative Financing with Seller Partnerships
30:06 Successful Real Estate Strategy
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Raising Private Money: Enhancing Real Estate Deals with Subject-To Techniques with William Tingle
Jay Conner [00:00:01]:
Welcome to another amazing episode of Raising Private Money. I’m Jay Conner, the Private Money Authority, and your host. And today, I have got a dear friend, a longtime associate who goes back twenty years. And today, we’re going to be talking about how to buy properties subject to the existing note and also how you can combine the strategy of using private money with a subject-to deal. We’re gonna talk about what is sub to, why would people do it, and how it is that my friend and my guest have done hundreds and hundreds and hundreds of these deals. Over 500 of them. So to go back just a little bit, my guest, before he got into real estate, he worked in the restaurant business for almost twenty years. And then in 1999, how many of you listening to this show can remember the name Carlton Sheets when he was offering a nothing down course? And so my friend and guest were watching this late-night TV infomercial.
Jay Conner [00:01:12]:
Boy, I remember when that was running back in the day. So, anyway, my guest ordered it up, read it, and took a $5,000 advance from his credit cards to start his real estate investing career. And then exactly one year later, he retired from the restaurant business for good and forever. So then for over ten years, he operated a real estate business where he was wholesaling, rehabbing numerous properties. But then he found his real niche in what he calls sub to. Here’s what’s interesting. I went to my friend’s and my guest’s live event about twenty years ago. I never heard of Sub-To until I went to his event.
Jay Conner [00:01:54]:
And so this is a buy subject to existing financing. So bring it current to this year. Right now, he has done over 500 properties subject to the existing note. And even though he’s retired, he retired in Belize in 02/2010, he continues to do this business, buying 20 or 25 properties a year, subject to the existing note in markets throughout the United States. Well, since I first met him twenty years ago, he’s written several real estate courses and books. His flagship courses are the ultimate substitute guidebook. And then he also did a book called Extreme Marketing, The Ultimate Marketing Guidebook. And his subject guidebook covers every aspect of the subject, from investing to marketing, defining motivated sellers, how to negotiate deals, how to complete the paperwork, and how to market and sell the properties.
Jay Conner [00:02:52]:
And then his other publication, Guidebook Extreme Marketing, is a actually, it’s a marketing manual with literally hundreds of both time-tested and unique out-of-the-box marketing ideas to help you grow your real estate business. Well, I can hardly wait for you to meet my friend, my business associate, and one of my very first mentors twenty years ago. In just a moment, you’re gonna meet the one and only Mr. William Tingle right after this.
Narrator [00:03:24]:
If you’re a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal, then you’re in the right place. On raising private money, we’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money, because the money comes first. Now here’s your host, Jay Conner.
Jay Conner [00:03:51]:
So, William, you moved to Belize in 02/2010. But before we talk about that, I gotta say it’s so good to see you here on camera from the first time I saw you almost twenty years ago at your live event on sub to deals. I didn’t even know what sub to was until I went to your event. I’ve been relying on the local bank here to fund my deals. But first of all, William, welcome to the show.
William Tingle [00:04:18]:
Well, thanks so much, Jay. I’m so excited to be here. I’m telling you. I’m just hoping I can live up to the introduction there.
Jay Conner [00:04:25]:
Well, you can. You can. Yeah. After I went to your live event all those years ago, I started buying houses subbed too, and that was before I knew anything about private money. That was before I lost my line of credit. Right. In 02/2009, my line of credit got shut down at the bank along with the rest of the world. But, I mean, this is just fascinating.
Jay Conner [00:04:49]:
All these years, you’re still doing sub-to deals.
William Tingle [00:04:54]:
Man, they’re the best. I mean, they’re the best. It was because no matter what happens and like you just said, I mean, something bad happens in the economy, those of us who were around in 02/2007, ‘2 thousand ‘8, ‘2 thousand ‘9, you know, the bank, if you’re relying on them, they can cut you off. And I can still buy as many houses as I want, as long as I want to. So there’s that, that’s what got me started on sub to.
Jay Conner [00:05:18]:
Yeah. So I guess the first thing we should talk about, just to make sure all of our listeners are on the same page, is what exactly, in simple terms, does it mean to buy a property? And in our and your case, most cases, we’re talking about buying a single-family house. Right? Correct. Yeah. So you’re buying a single-family house subject to the existing note or the existing finances. Unpack that in simple terms.
William Tingle [00:05:47]:
Okay. Well, let’s just let’s use an example of one that we just did a couple of weeks ago. We had we we go after foreclosures, people who are in foreclosure, the filings at the courthouse, and we make contact with them. And we talked with this young lady. Her name was Abby, and she had bought a house seven years ago. And, she had since gotten a divorce, moved out of the house, moved bought a new home with her mom. She was living in a different place. The house was vacant.
William Tingle [00:06:15]:
She didn’t want this house anymore. She was about four months behind on her payments and with legal fees and everything else. It would take $9,000 to bring the payments current. Now when when Abby bought her house, she signed a bunch of documents at the closing table. But the two main documents that she signed were a deed. Well, her seller signed the deed giving her title to the house, and she signed a mortgage. She gave a mortgage to the bank, guaranteeing she would make the payments, so they could take the house back. And as always, our pitch in on situations is taking over payments.
William Tingle [00:06:51]:
So she didn’t want this house. She said, I just wanna get rid of it. I don’t want a foreclosure. So we talked to Abby about taking over her payment. She was okay with that. She signed a deed to us giving us ownership, but we left the mortgage that she had in place, and we just made the payments on that mortgage. We caught her payments up, and we would make those payments moving forward until we sold the house at some point in the future or whatever we wanted to do.
Jay Conner [00:07:20]:
Right. So to summarize what you just said, you have an owner of a property that, in the words that you just said, she just wanted to be done. She wants, she wanted to be rid of the property. Absolutely. And so she’s willing to sell you or your entity the property, and she says she’s going to sell it. You’re going to take ownership, and she is agreeing to leave the mortgage in her name. So she’s not going to own the property anymore, but she’s going to leave the mortgage in her name. And in exchange for that, you are agreeing in this case of a foreclosure to make her payments, keep her payments current, and bring the past due payments current as well.
Jay Conner [00:08:14]:
It sounds to me like in this particular scenario, you’re helping rebuild her credit.
William Tingle [00:08:20]:
That’s correct. She we cure the default, and we’ll make however many payments are necessary. Now, in this case, it went a little bit differently. We found a cash buyer and had a lot of equity, and we had a cash buyer right away. But, normally, we’ll keep those houses and just make the payments for months or years in the future, which will get her credit much improved back from right, you know, currently when she’s in foreclosure. So, yes, it does help the seller.
Jay Conner [00:08:46]:
So, let’s talk about who these people are. How would you describe these types of sellers who are willing to do this, sell their house, leave the mortgage in their name? So one you just identified and the story you shared is someone facing foreclosure. What other I mean, you know, when I first heard about sub to from you way back when, my one of my first questions in my mind was, who in their right mind who in their right mind would agree to this type of, you know, arrangement? Well, you just decided somebody is facing foreclosure. But what other types of people or scenarios are willing to do this?
William Tingle [00:09:34]:
You know, you know, Jay, everybody automatically thinks only the most desperate people would do this, but the truth is there are people in all kinds of situations. I just had a phone call yesterday with a fellow. He’s got his house listed on the market right now. It’s been listed for four months. He’s moved out of state. His credit’s good. He’s not behind on payments, but just a conversation with him and explaining what we do, he’s considering it. And I figured he would probably wind up doing it if he doesn’t get a contract on his house in the next month or so before his listing expires.
William Tingle [00:10:10]:
We bought a house last year from a lady who had an 800 credit score, but she needed to move to Little Rock, Arkansas, so she’d be close to the university hospital if they gave her a call, because she was on a waiting list for a liver transplant. There are people in a lot of there’s a lot of motivation besides just financial. And we run into those people all the time. We make it our business to get in front of those people and present an option for them that solves their problem.
Jay Conner [00:10:41]:
Solves their problem solves their problem. Excuse me. That’s a powerful phrase. When you say solves their problem, it sounds like you’re first discovering where they are, what their situation is, to meet them where they are with that problem. It’s been my observation in my business that that’s what we are, is we’re we’re you know, we’re problem solvers. So give us some bullet point give give us some bullet points on how your conversation goes with a potential seller that might sell to you sub to. What are some of the points or questions that you would ask them? Like, you know, you got you, you got someone that’s got an 800 credit score that probably has an option of putting that property in the multiple listing service and listing it with a realtor. What are some of the advantages that you point out to potential sellers of doing business with you in this particular way?
William Tingle [00:11:46]:
Well, the biggest advantage to doing business with us is that, well, first of all, whatever their problem may be, we can solve it as quickly as they wanna get it solved. I bought houses from people in the past who didn’t have an immediate financial need. Maybe they were building a new home, and they didn’t wanna have to make mortgage payments because, you know, how it works when you build a home, Jay. We’ll be finished in April, and then April comes and goes. If my seller in that case had listed their house on the MLS and gotten an offer immediately, they may have had to move and move into an apartment or find some arrangements until their house was complete. Same token, maybe they wouldn’t have gotten a contract immediately, and they would have been stuck with two mortgage payments when their new home was completed. We’re able to get that house under contract, come to an agreement on taking overpayments, and move on their timeline whenever their house is complete. So that’s a solution for that particular person.
William Tingle [00:12:43]:
I’ve also told you about the solution for Stacy. We were able to close when she needed to, get her to Little Rock, where she was waiting to sell this house to purchase a new home. Remember, she had an 800 credit score. She could buy a new home right away, get moved to Little Rock. And as a sidebar to this story, within a week of moving there, she got the call. She got her liver transplant. We got an amazing testimonial from her. She said you guys saved my life.
William Tingle [00:13:10]:
So people in all kinds of circumstances, but you’re right. The deal is in the story, and that’s what you gotta get from the people that you talk to. Why are you selling this house? Sounds like a great house. Why do you wanna sell it? Well, I’m getting a divorce. Well, I need to move to Little Rock. Well, you know, I’m building a new home. There are all kinds of stories and all kinds of motivations for sellers.
Jay Conner [00:13:34]:
Yeah. So let’s suppose you’re talking to a seller, and they have a great credit score. And let’s say they and and let’s say their payments are current. Their payments are current. And they’ve got some type of motivation, whatever it is, that they want debt relief. They wanna get rid of that payment. But they’ve got a concern. They don’t know you.
Jay Conner [00:13:59]:
They’re just meeting you. They’ve got a concern that you’re gonna keep those payments current and not, you know, affect their credit score negatively. How do you speak to that when when and if they bring it up?
William Tingle [00:14:13]:
Well, if that question comes up, I just I I’m just very to the point about it, Jay. I just say, listen, mister Seller. You don’t know me. Now I can provide references for you. Our website has plenty of video testimonials from people that we dealt with, but the truth is, you don’t know if I’ll make your payments. No, a good point to make with some sellers, if you’re giving them some cash, especially if it’s a substantial amount, is listen. I’m writing you a check for $25,000. I’ll lose all of that money and anything else if I don’t keep your payments up.
William Tingle [00:14:47]:
So I’ve got an investment in this property too. You know? This is how we do business, and we’ve done it this way for over twenty-five years. So, having a good reputation helps. Having testimonials helps. But I’m very honest with them. I said, Listen. You know, we just met, and I can’t you know, there’s no way for you to know for certain. And I’ll also explain what’ll happen to them if we don’t make the payment.
William Tingle [00:15:11]:
So we don’t skirt around those issues. We’re just very blunt with them.
Jay Conner [00:15:16]:
Wow. What I love about what you just said is you’re speaking the truth. You’re not speaking around or trying to skirt around the truth. Here are the facts. And, you know, people, you know, people appreciate that. And, I mean, that is so powerful, what you just said, William. It’s so I mean, what you just said, really, William, was amazing.
William Tingle [00:15:40]:
Well, you know, you’re not gonna get any, you know, try oh, well, I’m getting. I hear these people do that all the time. Oh, we’re where we would never, you know, not, and I know it’s not my intent not to make their payments, but they have to understand the risk involved in this. And the truth is, if I don’t make their payments, the bank’s gonna foreclose and their credit’s gonna be fried. And we’re just very upfront with them. We explain that. And I’ve had people tell me, listen. My dad told me not to do it. My lawyer told me not to do it.
William Tingle [00:16:10]:
My real estate agent said not to do it, but we’re gonna do it. So yeah.
Jay Conner [00:16:13]:
Yeah. Well, that’s what happens when you’re just upfront and very, very, you know, truthful, with people. Now let’s talk about, for a moment, buying criteria. Now here’s what I mean by that, by when I say buying criteria. So I, you know, I use a lot of private money to pay all cash for houses. And when you’re paying all cash, whether it’s your cash or the bank’s cash or private lender’s cash, when I’m using private money to pay all cash for a property, that buying criteria is very, very different than my buying criteria for subject to the existing note. For example, what I mean by that is if I’m paying all cash, then I use a form of the maximum allowable offer formula, which is after-repair value. Of course, I’m getting it at a discount because it’s in distress.
Jay Conner [00:17:07]:
That’s another thing about these sub-to-houses. Aren’t a lot of them in, like, really good shape and don’t need hardly any rehab at all?
William Tingle [00:17:14]:
Most of the ones we buy today need zero rehab. I mean, they’re move-in ready. And, you can buy a sub to house with not you know, you’re talking about the the the MAO, formula that you use. We can buy a house with very little equity, but it may have a two-and-a-half percent interest rate loan. So, yeah, we can do things a little bit differently.
Jay Conner [00:17:35]:
Yeah. So I wanna unpack that for our audience that’s tuning in here. So when I pay all cash private money, I’m having to buy at a substantial discount. I got to protect my private lender. I don’t want to borrow more than 75% of the after-repair value. So I’m having to pay and buy that property at a much lower price. In contrast to that, you just said there can be very little equity in the house, and you can still buy it. So how do you decide if the numbers make sense? If the math makes sense, what are you looking at on a sub to deal as to whether it’s a pull the trigger for you or a pass on the numbers?
William Tingle [00:18:24]:
If I’m looking at a house that is in great condition, it can have very little equity. It’s gotta have just a screaming interest rate on it. And typically, we’ll buy houses at two and a half, 3%, three and a half percent. It’s gotta be something that’s gonna let me wrap that note and not have any money in it on the front end, make at least 4 or 506 hundred dollars a month in cash flow, and then get a back end over time, and you know how notes work. And because we’re gonna sell that house at current market rates or just a tad over that. So if I can buy a house that’s worth 300, if I can buy it for $2.80, and you and I know that’s zero equity by the time they sell it with a realtor, they may even have to write a check. But if I can buy that house for $2.80 at 3% and wrap that note at 300 or $3.00 5, at 7%, then I’m gonna get a good strong cash flow and make money on the back end. So we do that all the time.
William Tingle [00:19:23]:
But we also like houses with equity, too.
Jay Conner [00:19:26]:
Sure. So I don’t want the audience to miss what you just said. What you just said is you are buying these houses, a lot of these houses today, at a 2 and a half or 3 percent mortgage rate. And I want the audience to understand you’re not going out and borrowing money at 2.5% or 3%. You are inheriting the interest rate on that existing mortgage. Speak to that for a moment. I want everybody to understand that because this Florida sub to, your credit doesn’t matter. You’re not having to qualify for, I mean, I mean, is the mortgage company even involved in this transaction, the existing mortgage company?
William Tingle [00:20:10]:
You know, we do contact the mortgage company. We get added as an authorized person to discuss the loan, the seller. We handle that with the seller. But as far as asking the mortgage company, we don’t do that. We don’t, I guess, tell them what we’re doing. As far as I’m concerned, it’s none of their business. Bank of America made a loan to Bob, and they expect a thousand-dollar-a-month payment from Bob. And whether Bob’s the one writing the check or William’s the one writing the check, as long as Bank of America gets their check, that’s all they care about.
William Tingle [00:20:43]:
So, we don’t ask them about it. We just do it, and we take over the payments that way. That’s how it works for us.
Jay Conner [00:20:51]:
So buying subject to is not assuming a loan. Right? Absolutely not. So explain what’s the difference? What’s an assumption? What’s assuming a loan versus being subject to?
William Tingle [00:21:05]:
Well, if I assume Bob’s mortgage, I have to fill out a paperwork package and qualify with that bank. Now, if Bob bought his house four years ago and he’s got a 3% mortgage, when I go to assume it, I don’t know if the bank’s gonna let me keep 3% or not. Now they might or they might not. I guess it depends on the loan that Bob got. But by informally assuming it’s just taking over the payments, we keep Bob’s mortgage in place, that he paid all the closing costs for, that he sweated over, that he filled out the closing package for, and everything else. We don’t do any of that. We use about a dozen documents to take over our payments, a deed, a few disclosures, a standard HUD, and some other things. But we don’t assume that mortgage.
William Tingle [00:21:50]:
There’s no asking the bank for it. We just do it.
Jay Conner [00:21:54]:
Well, you know, what’s interesting about this world of subject to is that, as you just said, there’s no bank approval involved. And I’ve heard some real estate investors when they first hear about sub to, they’ll say, wait a minute. I’m not even sure this is legal. When I, and I know you’ve heard it many, many times over the years. And I think they questioned why this would be legal or not, because they never heard of such a thing. But if someone were to ask me, Jay, how do you know sub to is legal? I know what my answer is, but let me ask the ex-expert. What’s your answer to how do you know this is legal?
William Tingle [00:22:40]:
Well, you know, Jay, you and I are old enough to remember nonqualifying assumable mortgages. And, I, believe it or not, in the past twenty-five years, have bought one of those, an old FHA mortgage that was nonqualifying assumable. But what happened in the eighties when interest rates got up to 21%, banks started putting clauses in their mortgages. They call them due-on-sale clauses. And what it said was, if you transfer an interest in this property without our approval, we can call the loan due and payable. And they started doing that because people were just taking over mortgages at lower interest rates, and they were missing out on a lot of interest income. Well, what you need to know is that a due on sale clause isn’t, it’s it’s it’s not a criminal violation to take over a payment anyway. It’s just a it’s just a mortgage clause.
William Tingle [00:23:36]:
It’s just a civil action. They can call a loan due if they want to. So it’s not illegal to do it, at least not yet. So that’s why we take over payments. Nobody’s there’s no due on sale jail.
Jay Conner [00:23:47]:
No. I love that. Woah. No due on sale. Well, and along with what you just said, William, to more, well, first of all, that due on sale clause that you just mentioned. What the due on sale clause says in the mortgages now, since the nineteen-eighties, it says essentially the mortgage lender has got the right to call the note due, but they don’t have the obligation.
William Tingle [00:24:22]:
Well, re-read the claw the clause in most of the mortgages, Jay. It says the lender may, comma, at its option, comma, call the entire loan due and payable. My goodness. I mean, is that not sort of a wishy washy sort of, well, when we don’t have to do it, we might do it. They don’t wanna do it.
Jay Conner [00:24:45]:
You know? It’s just I’ve I’ve
William Tingle [00:24:46]:
Been doing this twenty-five years, and I’ve never had a loan call due. Now I’ve heard of other ones getting called due, but I can tell you, it almost always is for one of two reasons: not making the payments on time and not handling the insurance properly. Those are the two biggest reasons.
Jay Conner [00:25:02]:
Absolutely. Well, and another reason that it’s legal, here’s what’s funny. When I started doing subject-to deals after learning from you about it, it was already on the HUD closing statement.
William Tingle [00:25:15]:
Absolutely.
Jay Conner [00:25:16]:
It’s our I mean, your attorney, your real estate attorney, does not have to fabricate anything. Your real estate attorney does not have to go to subject to law school to learn about this. It’s already there. I think it’s line to zero three. Either line to zero three or zero four.
William Tingle [00:25:33]:
To zero three and 205. Buyer and seller side. Yep.
Jay Conner [00:25:37]:
Yeah. Right there on on the HUD itself. So I do wanna speak to this before we run out of time. After all, this podcast is called Raising Private Money. I own a lot of my sub to deals. I have I bought it sub to. Mhmm. And if it needed renovation, a lot of them don’t, if it needed renovation or if I didn’t want to use my own money to bring the payments due, if there’s enough equity in the property Mhmm.
Jay Conner [00:26:09]:
To protect the private lender, right, I gotta give them enough, I call it an equity spread, equity cushion, then a lot of times I’ve borrowed small amounts of private money in second position underneath that first mortgage position that I bought the property subject to the existing note. And so now we’re combining the strategy of buying subject to and the strategy of using private money in second position, so where I’m not having to put my hand in my pocket. Have you done any of that, William?
William Tingle [00:26:45]:
You bet. You bet. I sure did. I got one of my first private lender was actually someone that I bought their house via a sandwich lease option. They had their house listed. They couldn’t sell it. And, I was a new investor, so, you know, I was trying to find things at work, and I just bought a lease option course. And I was doing sandwich lease options.
William Tingle [00:27:05]:
And his house was free and clear, and I bought his house from him. I made payments to him for a couple of years before my buyer exercised their option, and I delivered his check to him. He was an older guy. I delivered his check to him out to his house, and I said, Okay, Mr. Smith. What you gonna do with that money? And he said, Well, what you got in mind? And, so I used him for several years, in the second position on sub to deals where where exactly what you said. We didn’t have to come out of pocket. And I’ll tell you, it’s also a great way for people who have smaller retirement accounts that don’t have a ton of money in them, to get a really good return on their retirement account. You know, if you need 10,000 or 15 or 20,000 on a deal to bring arrears current or to do a cosmetic rehab, that’s a really good way for them to earn money.
Jay Conner [00:27:52]:
Yeah. Well, and what you just said also, William, I don’t want people to miss out on, and that is a great time to get private money, is when you buy a house all cash from a seller, or, you know, you pay off a current private lender. And, William, just in case any of our listeners have to jump off early, I don’t want them to miss out on your contact information to learn about this sub-to world. And so, how can people reach you, William, before I go into my next question?
William Tingle [00:28:26]:
Sure. Well, the best way to reach me is at our website, sub2deals.com. You can reach us there. And I’ll tell you, I just I’ve just been doing this for twenty-five years. I just released my first book. And if you want a concise, affordable, easy way to learn a bunch about our business model, buying the nice houses, wrapping the notes, creating, passive income, they can check out, our book at our website, twelve house blueprint book dot com. That’s, ‘s a good.
Jay Conner [00:28:58]:
Oh, I love it. So let’s go, again, that’s www.thenumeraltwelve. Mhmm. So 12houseblueprintbook.com. That’ll be in the show notes as well. Www.twelve, the numeral twelve, house blueprint book Com. William, what is so that before they get the book, what is the 12 house blueprint?
William Tingle [00:29:27]:
You know, Jay, the 12-house blueprint is something I put together when I moved out of the country in 2010. I didn’t live where I could just drive around and look at houses or see houses. I had to put together a way that worked for me, living thousands of miles away, to still buy real estate. So what I did was I took a legal pad, and I, you know, I had been rehabbing at wholesale. I did section eight rentals, regular rentals. I did every. I was sort of a jack of all trades before I left the country. And I said, what I love about this business, I love buying sub to. I love selling with seller financing and the truly passive income of just creating a note.
William Tingle [00:30:06]:
So we started buying 10 or 15 houses a year, and I just did the math on it. And I said, you know, I can buy a dozen low equity nice houses every year and sell them on seller financing and within three years be making 600,000 a year plus. You know, and and and all of this talk these days about scaling and buying 20 houses a month and flipping all these deals and doing these things, most people that I meet, if they bought just a few houses a year, their life would change so drastically. And as I’ve gotten older, you know, 12 houses a year is a good number for me. With minimal marketing, you can buy a house a month. And I always joke and say, hey. Your grandma can do this. But that’s you know? And I put together that system, and that’s what I did for years.
William Tingle [00:30:57]:
And, you know, that’s for the most part what we do now. And, I’ve been planning this book for about six years. And this past year, I just finally buckled down and did it. And we just wrapped up our prelaunch yesterday. So the book’s available. Y’all go check it out. It’s not a lot of fluff. I mean, it’s almost 200 pages of good stuff.
Jay Conner [00:31:17]:
That is fantastic. William, what you just shared with me and the audience about your new book deserves what I call the very sophisticated golf clap that goes just like that.
William Tingle [00:31:31]:
Thanks so much.
Jay Conner [00:31:32]:
Having you here on the show, we need to celebrate you being on this show, William.
William Tingle [00:31:38]:
Absolutely.
Jay Conner [00:31:44]:
Well, William, it’s been a blast having you on. One more time, I wanna share both of your websites. The first one is www.sub2deals.com. That’s sub, thenumeralto, deals.com. And then for your new book, www.12houseblueprintbook.com. You can’t beat $600,000 a year in passive income. William, thank you so much for joining me. So good to see you again.
William Tingle [00:32:15]:
Yeah. Well, thanks so much for having me. It was a blast and it’s good to see you again, Jay. And then, yes, being around these old timers and the business, man.
Jay Conner [00:32:23]:
You got it, brother. And there you have it. Another amazing episode of Raising Private Money. And for me to continue to have amazing guests like William Tingle, I need your help. And that is why I need you to subscribe, like, share, give me a five-star review, and write a review. When you do that, I’m able to continue bringing on just brilliant guests like we’ve had today with William Tingle. If you happen to be watching on YouTube, be sure to subscribe and click that bell so you don’t miss out on upcoming episodes. I’m Jay Conner, the Private Money Authority.
Jay Conner [00:33:03]:
Looking forward to seeing you right here on the next episode of raising private money.
Narrator [00:33:10]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/MoneyGuide. That’s www.JayConner.com/MoneyGuide, and download your free guide that shares seven reasons why private money will skyrocket your real estate investing business right now. Again, that’s www.JayConner.com/MoneyGuide to get your free guide. We’ll see you next time on raising private money with Jay Conner.
