SubTo teaches how to make money from properties that are on the brink of foreclosure. For Pace Morby, this is an opportunity to make big cash. The goal is to acquire and hold real estate by taking over the mortgage without a new contract with the lender. It's a non-traditional method, but it's legal. Pace claims it's the easiest way to make big bucks online. No cash and credit requirement. Whether you're licensed or not, everyone's welcome.
As a stay-at-home mom, juggling kids and a side hustle while maintaining a clean home, I need a low-maintenance but quick-income biz. Pace Morby offers a business opportunity called SubTo or subject-to financing which pays a finder’s fee to those who can bring loan deals to investors. You can also become an investor by lending to realtors and charging interest fees. This SubTo review covers all you need to know about the course, the creator, and the business model. In the end, I’ll also answer if it’s worth investing in this biz.
Pace goes around the country to find houses that are behind their mortgage payments. He says there are two ways to profit: (1) to bring the deal to investors (like Pace) for a finder’s fee and (2) to become an investor like him. If you aspire to become the latter, he invites you to his SubTo coaching course. SubTo teaches realtors how to achieve financial freedom through creative finance. But with this course, the road to financial freedom comes at a hefty price. The program costs $7,800 for the core training, $10, 800 for the standard package, and $12K to $19K for the Mastermind. Students learn how to
find sellers of distressed properties,
negotiate deals,
fund deals without a loan (through creative financing) and,
find a profitable exit strategy.
Pace Morby calls himself the ‘creative finance junkie’. Some call him the ’SubTo Storyteller’. He took business management courses at Weber State University and Utah State University because his passion has always been in entrepreneurship. He started his first business at 23 years old, Arcadia Holdings in Salt Lake City, Utah. In 2011, he started another biz, a tech company called LifeNumber. He sold it the following year to focus on property flipping. He became a HomeVestors franchisee in 2016 and launched SubTo in 2019. Pace has been in the real estate rehabbing biz since 2011. He's built over 300 homes and flipped over 500 properties. Pace accumulated over $32 million worth of properties across America. With all these experiences, he’s more than qualified to coach a real estate investing course.
SubTo and the Creative Financing Business Model
Pace identified a problem in the market. Real estate agents are having a hard time getting a loan. So, he came up with a solution: subject-to-seller financing. Subject To (or SubTo) is a financing option wherein the buyer (usually a real estate investor) takes over the seller’s remaining mortgage with its existing loan terms. You don’t need a good credit score to qualify. Only pay the owner the paid portion of the mortgage. This financing option is advantageous for home buyers seeking lower interest rates. Those with poor credit scores who can't qualify for a loan may also hop on a deal like this.
How do you make money with SubTo? Pace explains several income options. The most common strategy is renting/leasing the property at a rate higher than the monthly mortgage. Another option is flipping the property using the seller’s mortgage. If the property is in a strategic location, it can also be turned to Airbnb.
Pace Morby's SubTo is rated 4.5 stars in Trustpilot. Many say there’s value in this coaching course. However, 1-star reviews tell a completely different story. One said the course is a rip-off. Another warned about hard-selling on course upgrades. Some say they scam members with guideline swindling. The Morby Method follows an unorthodox process. Only very few can pull it off correctly (if there are any). I can’t find an unsolicited post that can testify that they're successful with the Morby Method.
The business model is very risky. SubTo is not illegal, but it also doesn’t go through a standard process. You’re basically taking over another person’s mortgage without letting the lender know about it. SubTo doesn’t release the seller from responsibility for the mortgage. It will be hard to find someone who would agree with these terms. Another issue with the biz is that the original contract may have a due-on-sale clause. This means the lender can require full payment of the outstanding obligation if they suspect mortgage assumption.
About 33% of Americans have poor credit standing. With scores ranging from 300 to 620, they’re less likely to qualify for a loan. Those who aren't qualified for a loan explore other financing options like subject-to-seller financing. Pace isn't wrong. There's an opportunity for business here. A report by ATTOM shows that there are already 97,608 foreclosure filings in the first half of 2023. There is a market, but it isn't big enough. The mortgage approval rate in the U.S. is around 80% according to Zillow's survey. This means that 4 of 5 Americans can get financing the traditional way. Since they can acquire loans, they wouldn't need to explore creative financing options.
Pace Morby Reviews On YouTube
Johnny Pagnini reviews Pace Morby and his SubTo mentorship. He starts by talking about the program's two major advantages which are the Facebook group and discord access. However, he cautions that since the members are not screened, unethical participants might exploit the good ones. He also mentions the steep pricing of the program and ends the review by saying it could be a valuable course for those already in the real estate biz.
Is It Worth Investing In Pace Morby’s Subject-To Financing Business Model?
SubTo financing is a very niche market. It's high-risk and prone to scams, conflicts, and lawsuits. It’s not worth investing your hard-earned money into this program. The pricing is also very steep and could go up to $19K. Overall, the risks outweigh the rewards in Sub-To investing. Income as a lender is inconsistent and unpredictable. It also bears inherent risks like credit risks and legal and financial complications.
If you’re new to the online biz, you need a low-risk and stable income source. Instead of becoming a SubTo lender, why not build digital assets and become a digital landlord that generates long-term passive income? Digital assets that are ranked up on the search engine generate leads you can sell at 85% margins. These properties can also be rented out to over 10 million companies in the United States that don’t have a site of their own. Digital land lordship is a recession-proof business because digital real estate is not affected by local or global market downturns. It’s a stable income source for moms who are looking for a reliable online biz.
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