The Morby Method – $0 DOWN Real Estate Strategy Breakdown

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Wait, why are you bringing money to the table and understand it? So like, I’ll go to one of my private lenders, I have private lenders, just like you have access to private lenders. And I’ll go, Hey, I need $100,000 for three days. So their money goes to title. This is also another mechanic that a lot of people have a hard time with. Right? And there’s no there’s no books written about this. There’s no YouTube videos about this. I you’ll start seeing me talk about this a lot more. And it’s going to be really confusing for people because it’s not something that many people have ever done.

Right? So the $100,000 $400,000 comes from my investor loan $100,000 comes from my private money lender. So how much money of that came out of my pocket? Zero $0. So all $500,000 are now sitting in the title company waiting for all the disclosures, the notary, and we’re waiting waiting to actually close escrow, right. So we close escrow. What is title company now? Do they record the deed in my name? So now I’m the new owner, and the seller? Does the seller receive all $500,000? No, no, the seller receives $400,000.

And then the other $100,000, which is what the seller is going to refund back to me, that money goes back to my private money lender, and the seller and I create a secondary note and deed of trust and attach it to the property. So now I have a first position with my investor loan, I have a second position with the seller. Got it? Okay. And the way I’m structuring that second position note is zero payments for five years. And then when I sell or refinance a house, that’s when I pay that second position off. Got it. So how does that solve her tax problem? The it doesn’t in that situation? It does. Right?

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Okay, so you’ll see the column an early release the call in the next couple of days. So when I release it, you’re gonna see that after the seller says, Yes, I love this idea, we then get into a 15 minute conversation about her taxes, right. And the conversation with her was, hey, let’s get on the phone with my tax attorney, prime Corporate Services, and my 1031 Exchange intermediary, Brandon, and let’s all have a conversation about how to structure this properly, so that you don’t have that tax gain that you really are worried about. And you can still receive that $400,000 downpayment rather than just the $100,000 downpayment. Right?

The way we’re structuring that a couple of potential different ways. And I don’t want to go into it to confuse you. Because your sellers not going to have that same concern like Wendy’s, very, very high level, and most sellers, Darrell, they they’re not going to ask about their tax implications, most of them are not, and every single CPA is going to be different. And every single person you talk to is going to be different as well. Right? So we fixed her problem, okay, the biggest problem is she’s like, I don’t need all of that money, unless I have a deal to roll into. Got it.

Okay, we found her a deal to roll a portion of her money into so that she still satisfies the 1031 exchange, and she can peel off 100 grand of it. Okay. Now, there’s a couple of things I could have done. I could have structured this in 10 different ways, right? Larger downpayment, smaller down payment, go to my investor loan for only 250. I could legit go to my investor loan right now, Darryl. And I could ask them for only $100,000 loan in first position on this house. And then she would give me a second position no at $400,000. Yep. Does that make sense?

Being part of a mastermind or being part of like a collective group where you can have these kinds of conversations behind closed doors, and nobody else is listening. You can just be honest about stuff and go. Yeah, I’m willing to take that risk.You have to ask yourself that question. Am I willing to take that risk on this particular property? Yeah, I definitely think I am because the ARV is like 1.3 million as well. I have some equity as well. Why are you selling this deal to me? I want to keep it right. Oh, my first my first deal. And that’s it.