Podcast: Play in new window | Download
On today’s episode, Attorney Shawn Yesner and I talk about strategies for crushing debt. We also discuss “subject to” deals and other legal topics that real estate investors should understand. Shawn has experience in cases concerning commercial landlords, real estate transactions and Chapter 7 bankruptcy. In Shawn’s book, Crushing Debt, he discusses negotiating debt, handling student loans, dealing with IRS, handling bankruptcy and loan modifications and working with short sales.
So many people have so much debt, that it’s important to understand all these issues to better negotiate a deal that will actually help them with their debt. Even if an investor isn't in debt themselves, they can use some of the strategies in Shawn’s book to negotiate a deal with a seller who has high debt and can’t figure out how to sell their property. The concepts will also help you understand how processes like bankruptcy work and how that will affect you as a real estate investor if the seller is in that situation.
What can wrong for a seller during a “subject to” deal? A seller with an attractive mortgage sells a note while the buyer pays the mortgage. So if the payments don’t get paid, the bank will come after the seller because the mortgage is still in his name. In addition, the seller’s credit would greatly decrease. A seller can be sued for various reasons in these cases. In Florida, criminal charges could even be put into place because of disclosures and certain statues.
As a legal representative for both sides, Shawn shares how he understands where both parties are coming from and can help sellers or real estate investors. Documentation is very important and a lawyer can help make sure all of the contracts and proper documents are put in place before a deal transpires.
Many times questions come up about whether it’s ok for an investor to make the payments directly to the seller instead of to the mortgage company. Shawn doesn’t recommend that investors do that because the owner of the property then doesn’t have the assurance that the mortgage will be paid.
For exclusive tips and information from Shawn, make sure to sign up for the Mailbox Money Mastermind that includes a breakout session with Shawn.