Subto Real Estate Investment is a coaching program by Pace Morby, which focuses on how to acquire and hold property without taking out a loan by using the subject to method of creative financing. We’ll get to the point and say that the Subto coaching program is not a scam, as it actually has something valuable to offer.
A common question asked with “gurus” claiming huge financial success is why they spend their time teaching courses. Most gurus would give a “giving back to the community” kind of answer, but Pace comes outright admitting that the reason he invests on his course is that most of his investing deals come through his students.
Who is the man behind this course? What does the program offer and can it help you build generational wealth? How successful are the students, of the course? Read along and we’ll answer these questions in detail.
Subject to earns you money by renting out properties. This draws similarities to local lead generation where you rent out your digital space to local businesses. Local Lead Generation earns you passive income quicker and without the hassles of the real estate industry.
Who Is Pace Morby?
Born in Ogden, Utah, Pace Morby, also known as the Subto Storyteller, is a real estate investor who has 14 income streams across real estate, lending, and insurance. He received wide attention through his free video training on YouTube that teaches viewers on how to invest in real estate using the subject to method. His YouTube account has millions of views, 87.1K subscribers, and over 1000 videos.
Pace took business management in Weber State University and Utah State University. Pace has a wealth of experience and has founded many successful businesses in the past:
Pace started the Subto Coaching program in late 2019. In 2021, he co-hosted the TV show Triple Digit Flip on A&E with Jamil Damji. The show is about making $100k or more using fix and flip.
Currently living in Phoenix, AZ, Pace has amassed $32M worth of properties across the United States. He built over 300 new homes with over 500 Fix and Flips, and as a general contractor with a license, conducted over 7,000 home improvements. Morby has performed over 1000 Creative Finance jobs and purchases, besides 500 wholesale assignments.
Between 2016 and 2022, Pace and Jamil spent about $600,000 on travel, lodging, and marketing to organize successful grassroots events and provide free lessons to people all around the United States.
Pros and Cons of Subto Real Estate Coaching Program
Pros
Pace Morby is a highly experienced, active real estate investor.
Access to private Facebook support group with 5.4K members. Regular updated uploads of scripts, contracts, and spreadsheets. Pace uploads various documents created by his attorneys.
10-25 hours of zoom calls in a week.
Cons
Price is extremely expensive, especially for beginners trying to get into the real estate industry,
There is no refund policy for the program.
Dubious reviews trying to market the course. Many legit negative reviews of the program from students.
Who Is the Subto Real Estate Coaching Program For?
Subto offers 3 types of memberships. The packages that come with the memberships make it practical for different types of students:
- Beginners who have little to knowledge in real estate investment who want to try subject to investments, or other strategies.
- Active real estate investors who have a hard time making progress with their business and are looking for other strategies.
- Experienced real estate investors who want to scale or expand their business using different investment methods.
If you find this course doesn't fit to you, Open Door Capital is an option.
What Do You Get With the Subto Real Estate Coaching Program?
As with most high priced courses, applying to the program starts by booking a scheduled call. This call will gauge your experience, financial situation, and motivation. During this call, you will also be offered the membership packages and price:
Pace has a free ebook called Subto Seller Spells. Inside the book are lines to say and tips on how to sell a subject to deal to a property seller.
The ebook is about dealing with sellers who is using the objection of needing an attorney to look over the deal or asking for too much money. It also gives you a tip on how to sell the subject to deal to the seller.
How Do You Make Money With the Subto Real Estate Coaching Program?
The Subto Coaching Program comes with training materials of 15 different real estate investment strategies. The focus, however, is with the subject to real estate investment strategy.
Subject to is the process where a buyer essentially assumes the seller's remaining mortgage balance without making it official with the lender. It is buying houses without having to qualify and assume the loan. You don’t need to show bank and tax records or proof of funds.
There is no official agreement between buyer and seller, meaning the buyer is not legally obligated to pay the mortgage. However, since the deed is transferred to the buyer, the house will fall into fall closure if they do not pay the mortgage.
So how do you make money with subject to? Pace teachers 7 exit strategies:
- Rent - you essentially rent out the property at an amount higher than the monthly mortgage.
- Lease Option - you find an investor to agree to pay you above the monthly mortgage until they write you out and get refinanced with their lender.
- Wrap-Around - You sell the mortgage, typically with a $15k - $35k down payment, to someone who can’t qualify for their own mortgage.
- Sub-Tail - you basically fix and flip a property with an existing mortgage.without getting a loan by taking the seller’s mortgage for the duration needed to fix and flip the house.
- SRRR (subject to purchase, rehab, rent, repeat)- works like the BRRRR method but without refinancing. No need for a hard money loan and no need to wait 6 months to refinance,
- Group Home - group homes provide higher income potential.
- Airbnb - turn the property into an Airbnb which has high income potential with the right location.
Advantages and Risks of Subject To
What makes subject to different from other creative financing strategies? Why would you choose the subject to method and why would sellers agree to this type of deal?
Advantages for the Buyer
You don't have to qualify for financing. Chance of finding a low-interest mortgage rate.
Fewer up-front and closing costs. No need to deal with banks, title companies, agents, or loan officers.
Since a portion of the mortgage has already been paid, you can quickly build equity in the house.
Risks for the Buyer
You face losing your property if you don't pay the monthly mortgage in a timely fashion.
The lender/bank can call the loan due. If you cannot pay within 30 days, they can initiate foreclosure.
You must purchase a new insurance policy naming you or your business as the insured.
Advantages for the Seller
A subject to real estate deal might be the best solution for sellers facing foreclosure.
The seller will sell the property as is. Seller doesn't need to spend more time and money on repairs.
If the seller is an investor who wants to finance a new and more profitable deal, a subject to deal will help them quickly dispose of a property.
Sellers are not responsible for the closing costs in subject to deals.
Risks for the Seller
As the mortgage is still under the seller's name, you will ruin their credit score if you don't pay the mortgage responsibly.
The lander/bank may enforce a due on sale clause which requires the outstanding mortgage to be paid upon sale. This will prove less profitable for the seller.
How Successful Are Subto Real Estate Coaching Program Students?
The reviews from students of the Subto program are leaning towards the negative side. The program has a bad reputation hit when there was an influx of generic positive reviews on trusted review sites like biggerpockets.com and trustpilot.com. These dubious reviews have the same posting time and date, which means a bot posted them. (click to enlarge)
You'll find a few legit positive reviews such as these.
And a lot more negative ones like these.
There are, of course, testimonials on their official website.
Is Real Estate Investing Worth Starting in 2024?
With the current state of the market today, real estate investment can yield significant returns, but it isn't as easy as these mentors make it sound. The entire process, from building buyer and seller lists to negotiating deals and filing forms, will take an enormous chunk of your time. Not to mention, you have a lot of studying to do if you are a beginner.
In the long run, and with a substantial investment of time and resources, it is possible to achieve that financial freedom with real estate. It will take a lot of work to get your real estate business consistently earning you substantial returns.
If you are looking for a passive income model that takes way less time and very little capital to set-up, check out the alternative that I mentioned earlier. In this alternative business model, you earn passively by renting out your ranked site to local businesses. Local Lead Generation does not come with all the legal hoops and maintenance hassles of the real estate industry.
