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How to Buy a House With $0 Down by Codie Sanchez, featuring Pace Morby

Codie Sanchez is a reformed journalist, turned. institutional investor to now a Managing Director and. Partner at Entourage Effect Capital, a private equity. firm focused specifically on investing in the legalized. cannabis industry. (@Codie_Sanchez) Founder and CEO of Contrarian Thinking.

In the ever-challenging housing market, the concept of buying a house with zero down payment seems almost mythical. However, Pace Morby, a real estate expert, has developed a unique approach called “creative financing” that allows individuals to enter the housing market without any down payment. This article explores the conversation with Pace, delving into the intricacies of this method, its legality, risks, and potential rewards.

5 Key Takeaways

  1. Creative Financing Method: Pace’s secret is a process called “creative financing,” where he takes over existing mortgage payments from sellers, transferring the deed to his name without a down payment.
  2. No Credit Checks or Credentials Required: This method doesn’t require credit checks or traditional credentials, making it accessible to a broader audience.
  3. Utilizing Other People’s Money: Pace often uses private money lenders to cover closing costs and other expenses, allowing him to invest without using his own cash.
  4. Risks and Details Matter: While the method seems simple, it involves various risks and micro-details that must be handled with care.
  5. Multiple Exit Strategies: Depending on the neighborhood and property type, Pace employs different exit strategies, such as midterm rentals or regular rentals, to maximize returns.

The Concept of Creative Financing

Pace Morby’s creative financing method revolves around taking over existing mortgage payments from sellers who want to move out of their properties. By transferring the deed to his name through a title company, he gains ownership without any down payment. This method is legal and involves no credit checks or traditional credentials.

Outreach and Acquisition

Pace’s team reaches out to real estate agents and sellers who have tried to sell their properties unsuccessfully. By offering to take over mortgage payments, they acquire properties with zero down payment. This approach has led to a portfolio of hundreds of single-family homes.

Risks and Mitigation

While the method seems lucrative, it’s not without risks. Understanding the details, such as the 10-day inspection period and earnest money, is crucial. Pace emphasizes the importance of not going past the 10-day period without a buyer to avoid losing the down payment.

Financing and Utilizing Other People’s Money

Pace often borrows money from private lenders like nurses and doctors who have extra cash. By offering them a 10% interest-only return, he covers the costs without using his own money. This approach aligns with his philosophy of expecting higher returns on his investments.

Finding Tenants and Exit Strategies

Depending on the property and neighborhood, Pace employs different exit strategies. For nicer neighborhoods, he might opt for midterm rentals or regular rentals. He uses a nationwide property management company to find tenants, even before owning the property.

Lessons Learned

  1. Innovation in Real Estate: Pace’s method challenges traditional real estate norms, showing that innovation and creativity can open new doors in the industry.
  2. Attention to Detail: Understanding the micro-details and managing risks is vital in executing this method successfully.
  3. Leveraging Other People’s Capital: Utilizing other people’s money wisely can lead to significant gains without personal financial risk.

Final Thoughts

Pace Morby’s creative financing method offers a fascinating glimpse into an unconventional approach to real estate investment. While it may not be suitable for everyone, it demonstrates the power of innovative thinking and strategic risk management. Those willing to delve into the details and navigate the complexities may find this method an intriguing avenue for investment. As with any financial endeavor, thorough research, understanding, and professional guidance are essential to success.

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