Avoid Subject To Disasters: How to Vet Attorneys, Title, and Close Creative Finance Deals (San Antonio)

Robert Gomez (00:00)

So the number one thing based on like, regardless on price or whatever they’re going to charge you is the experience they have on creative deals. Do they own any creative deals themselves? Because even if they know about it, but they don’t own any deals, then that’s another thing that you want to make sure that you watch out for. Because if you’re actually doing the thing, you’re going to be more delved into like when things go south. Like I said, because not that they go bad all the time, but you got to be prepared and you got to have that mentality that something could happen.

Dylan Silver (00:06)

Yeah.

Hey folks, welcome back to the show. Today’s guest is a broker and investor based out of San Antonio, Texas, focusing a lot on owner finance and creative deals. Please welcome Robert Gomez. Robert, welcome to the show.

Robert Gomez (02:00)

Thanks.

Well, thank you, thank you, thank you for having me.

Dylan Silver (02:15)

It’s great to have you on here Robert, I lived in San Antonio for really the last four of the last five years, maybe a little bit more than that. But tell me, and I always like to start off at the top, asking guests how they got into the real estate space. ⁓

Robert Gomez (02:29)

Well, my store is very unique, I guess, and it was one of struggle per se. Originally, I got into it like 12 years ago when land was very cheap. So I was buying land for like $4,000 and then cutting the trees, fixing it, and then flipping it for like eight to $10,000. And that’s all I knew about real estate back then. I knew that I could buy it cheap, sell it for twice as much, and made money.

But then what really got me started on owner finance and creative deals was that our very first transaction for my personal property was a creative finance deal. But back then I didn’t know anything about it. And the that we actually tried to purchase the property from, it seemed like they were doing some wrong dealings as far as over promising and under delivering, and then not getting like receipts, like earnest money receipts the right way. I didn’t get the signed contract until like two weeks later.

Dylan Silver (03:00)

Yeah.

Robert Gomez (03:18)

So there was like a lot of red flags that I didn’t know about before, but like something inside me was like, well, something’s not right. And then we eventually tried to like reach out to an attorney and then he found out like everything was wrong. We were actually going to pay like 15 % interest for that piece of land that it was ⁓ for a mobile home back then. And I mean, I didn’t know about rates either. I was just like, I’m just happy. I’m going to get an opportunity. I’m going to get a property and we’re going to put like 5,000 down.

Dylan Silver (03:41)

Yeah.

Robert Gomez (03:42)

As time went on, seemed like that person had sold that same property like three different times to different people and then just taking it back and put it back on the market, take it back, put it back on the market. So that’s why I was like, wait a minute, like this isn’t like, shouldn’t be happening. So that same attorney, we reached out, let him know what was happening. without him knowing a lot about us, he refinanced us, paid off that lady and he gave us like a 7 % rate. So from then on, was like, you know what?

Dylan Silver (03:56)

Brian.

Hmm.

Robert Gomez (04:08)

If this happened to me and this happened to other people, then I want to make sure I study and make sure that we can make a difference and do it the right way. Because,

Dylan Silver (04:15)

You know, I think

that’s a really interesting point that you spoke on there. When we talk about these creative deals and buyers and sellers in this space, but also even attorneys, There’s so many, and lenders too, there’s so many ways where these deals can get tricky and hairy. And so I’ve seen so much of it, and I’m sure you have as well.

You really need a trusted person in each step of the way. You need a trusted title company when you’re starting out. You need trusted mentors and people who’ve seen deals like this. You need a trusted attorney where you know they will have your fiduciary interests in mind and that they’re not just trying to make money or bill you for hours or something like this. Along the way, I’m sure you must have made lots of these connections, maybe some good, maybe some bad. Do you have any advice for folks when they’re…

really trying to vet people and they may be new in the game. Maybe they haven’t spoken with real estate attorneys or title companies or ⁓ agents before, but they are looking at doing their first deal, their first couple deals.

Robert Gomez (06:09)

And I mean, and you touched on a great point. I mean, the main thing, like the number one advisor will be like, obviously that attorney, that’s your first right hand. And just like anything, and as I’ve learned on real estate, there’s going to be like those real cheap ones and there’s going to be some moderate ones and then some more expensive ones. But what I’ve learned along the way is was, cause I’ve done them all, like you’re saying, like I’ve done with many different attorneys, the cheaper attorneys just draw the paperwork. They close the deal and then you never hear from them. Something happens, especially in creative deals.

then they just kind of like, hey, you sign like 10, 20, 30 pages of them releasing themselves and then like three or four of the actual documents that we’re doing for the transaction. So there’s plenty of those. And what I’ve come to realize is like, it’s more of a true person that actually has your back when things goes out because things well goes out on creative deals, especially like doing sales and so forth.

Dylan Silver (06:53)

Yeah.

Robert Gomez (06:57)

So I have a team now that this attorney has actually helped me navigate through a lot of these transactions. This is not the most affordable attorney, but it’s also not like the most expensive. But I know that in any given situation, his firm has stepped up and helped me along the way. And that’s why I really look for it. Like one that’s going to be the long run and not just one that’s going to save me a couple of bucks.

Dylan Silver (07:19)

I wanna get a

little bit granular here on this, Robert, and ask you about identifying, like you mentioned, really what is that happy medium between making sure that you have all your bases covered, but also making sure that you’re operating on a budget, especially when you’re just starting out. I know as a real estate agent and you as a broker, there’s sometimes some conflict between what the investors and what wholesalers want to do and then what.

the official Trek guidance to, for instance, realtors is, and it feels like people are playing by two different games, if folks are on the unlicensed side and they may not really be familiar with contracts and with all of the process, would it be smart for them, even if it’s their first deal, to be reaching out to an attorney and have that kind of a connection? Or is it when you’ve grown and when you’ve scaled, maybe you’re balancing a couple of deals?

or you are yourself involved in a creative finance transaction, that’s when you wanna get the attorneys involved. What’s your perspective on that?

Robert Gomez (08:21)

I think the biggest thing is to start building the relationships. And not all attorneys are going to be the same. like not all agents are going to be the same. I mean, I’ve given a lot of classes within the brokerage. And I hear a lot of them, like they have like so many different ideas on creative finance. And if somebody was to ask them, like, what do you know about like owner financing? They’re like, well, I don’t know about it. Don’t do it. That’s all I know. So the same thing goes for attorneys. There’s going to be a lot of attorneys that are going to be familiar with this.

So the number one thing based on like

regardless on price or whatever they’re going to charge you is the experience they have on creative deals. Do they own any creative deals themselves? Because even if they know about it, but they don’t own any deals, then that’s another thing that you want to make sure that you watch out for. Because if you’re actually doing the thing, you’re going to be more delved into like when things go south. Like I said, because not that they go bad all the time, but you got to be prepared and you got to have that mentality that something could

Dylan Silver (08:52)

Yeah.

Robert Gomez (09:48)

And the main reason that things do happen is because of not as much disclosure as you should have. And thinking that, if I tell them this, they’re going to take the deal, or if I tell them that, then they’re going to back away, and so forth. And then those are the deals that you have the most trouble with. So an attorney with experience and the ones where you get them are just your local Rias. Like just hang out to your local Rias and then find out like who’s doing those deals. And then let them know. And the main question is like,

Dylan Silver (09:54)

Yeah, well…

No question.

Robert Gomez (10:14)

after you close, like if something happens, would you be able to help me navigate out of it? And then just straight up, just as blunt as it comes. And they’ll be like, ⁓ well, no, because, that’s the, we just closed the deal. And then that’s your answer right there. And then some of them will be like, well, my team handles this, this and that. And then we can help you with like navigating through that. Because there’s also like people like charging for like, do you want to sell insurance? But there’s really like no such thing as an insurance.

For that is just the right document set at the right time by the attorney.

Dylan Silver (10:43)

Yeah,

I mean you bring up a great point you mentioned after clothes I actually had a woman I believe it was in Florida she was based out of who was talking about really a deal that was hairy and Basically, she found out very shortly after closing that there were some issues which were not Disclosed and and it ended up being this whole ordeal So I mean what do people do if you find out after clothes that there’s something that’s arrived will they help you after clothes? That’s a critical

of feedback to get from your attorney. I do want to pivot a bit here, Robert, and ask you about being a broker investor. As someone who is an agent investor myself, agent wholesaler if you will, I think there’s a lot of synergy between the two spaces, but also too, there’s often times people picking one vertical or the other. What made you decide I’m gonna be both ⁓ licensed and an investor?

Robert Gomez (11:35)

Again, it all comes to leverage and the credibility that it brings. And because it’s just a more finer line that has a broker you have to follow, that it creates that trust because you’re not like as a broker, you’re not going to be doing things the wrong way. And it’s kind of like you’ve been like a military person. Like if you’re a Marine, I mean, you’re not going to go and get in a fight because you’re not like the law is not going to be the same one or a boxer like a regular civilian.

Dylan Silver (11:49)

Yeah, yeah.

Yeah.

Robert Gomez (12:01)

Well, it’s kind of like falls in same spot. So it builds more credibility, trust, and it’s just that leverage within the real estate world that they know that you’re one of them. That’s why they call me sometimes like, you’re one of us because we don’t like investors. But at the time, it’s not that you don’t like investors, it’s just that you don’t get a chance to get to know them. Because just like the same way that there’s good agents, there’s going to be some agents that are going to be doing things the wrong way. So it just depends to be able to know who the person is and the track record that they have.

Dylan Silver (12:23)

Yeah.

I want to ask you about San Antonio specifically. I lived in San Antonio for a handful of years. I like San Antonio in a lot of ways. I can’t believe how much growth there is in San Antonio. I was living over by the rim 1604 headed out to to Bernie and I could not believe just how much new it felt like flex use commercial was going up everywhere.

What is the vibe like in San Antonio right now? Are there a lot of single family home investors? I know that was kind of maybe fading to some degree with interest rates where they were. I was seeing a lot of new construction go up everywhere. What’s it like in the investment space in San Antonio right now?

Robert Gomez (13:06)

Well, right now, just the one that’s, like I said, overpopulating are just like sub to deals. That’s like, that’s just, I would say like 80 % of it. haven’t not seen a lot of wholesale, like fixed wrappers, just because there’s a lot of like gentrification that already took place. There’s still like a small pocket of them, but not as much as you used to see before. And as far as the commercial, there’s a lot of new construction. Again, along with 1604 and the rim.

Dylan Silver (13:31)

Yeah.

Robert Gomez (13:31)

with

the finishing touches of that new three-sided highway, like 604 and 910, a lot of movement that’s going to be heading out there. But I guess the biggest influx of the sub-2DOs came to be from 2020. Like everybody buying, extra for them, and then people needing to move now, and they don’t have any equity. So, and because we’re a military city, that cost a lot of like, a lot of people need to move because of the military or just jobs. But I would say like,

Dylan Silver (13:49)

Mmm ⁓

Robert Gomez (13:57)

70 % or so of the deals that we’ve taken over, they’re like VA loans from military people that needed to be displaced to another city or town.

Dylan Silver (14:46)

There’s two really interesting sides to this. First is that you’re dealing with a population that is relocating or needing to move PCS, this type of thing. Second is that I’m curious as to what happens to those investors who potentially bought this subject two deal in 2020 when the rates were lower. So these are really a good time to take over a loan. Are they now looking at offloading some of these?

deals are they holding onto them? are people doing who got into subject to deals at that point?

Robert Gomez (15:17)

I would say like the investors that actually were in the game in the long run, like what I mean is like that whole like five or 10 more properties, we’re just gonna like put tape on everything that we have because there’s not a lot of movement, especially with the presidency changes. So like personally, now it’s slowing down for me. So we’re turning them into rentals and even like rental market, it’s like there’s an influx of rentals. So if they were like renting for $2,000,

Dylan Silver (15:24)

Yeah.

strong.

Robert Gomez (15:42)

you’ll be lucky if you were to lease it for like $1,700. But rather than to pay the full $2,000 and lose the whole $2,000 a month, we’re just like negative $300 on some of the properties. But it got to a point that we were like $20,000 in holding costs for like six months, just trying to hold those properties, hold those properties, because there were just so many.

Dylan Silver (16:02)

Yeah, the holding costs add up and I’ve seen it with flippers who I’ve worked with and was really the impetus why I got licensed was because I was seeing what felt like and this isn’t true carte blanche. I’ve spoken with a lot of people in Texas even who’ve told me flipping is alive and well, but it does feel like that anything involving distressed real estate is a little bit trickier because of a lot of the holding times because properties are not selling as fast. And then also

Folks who are potentially looking at buying a home, they’re buying new. You’ve got lower rates, you’ve got incentives, you’ve got so much new construction happening. I’m not too well versed on this from the investor side, but I’ve also known some flippers who are now slowly getting into the ground up construction game, which is a totally new space entirely for them.

Robert Gomez (16:52)

Yeah, absolutely. And I mean, the whole thing of the new homes turned the game around because back then in COVID there was no materials. So there weren’t any new homes and the ones that were selling, they were selling overpriced. And now we got an influx of materials and they just overbuilt. And like I tell people when we get the listings and again, going back to your original question of being a broker and also being an investor is like, we’re the front door. we just solve problems. That’s what it’s all about all the time. So I give them a ⁓

list of different things that we can do with our list, take over the property, pay it off, give them like an investor offer that’s cash if they have paid off or take over the loan. And then they decide upon what their needs are at the moment. But because there’s so many of the new homes being built, if I tell them like, if I come and listen, and even if I give you a discount on the listing side, there’s really no.

Dylan Silver (17:33)

Yeah.

Robert Gomez (17:38)

marketing that could be huge enough to compete against the builder that’s building a brand new home that’s 20, 30, 40, $50,000 less, brand new, with rebates, with incentives, with bonuses for the agents. I’ve seen some builders give out like seven to 10 % commissions. So it’s like, and I tell them the truth, and that’s one of the things that’s really made a big difference on the trajectory that we have.

Dylan Silver (18:01)

Yeah.

Robert Gomez (18:01)

blunt and honest as I can with them. So it’s like, this is the way it is. mean, unfortunately, this is where we’re at right now. I wish I could give you a better answer. And then if you get somebody else that’s going to come in and tell you that’s going to give them more, I mean, you could, but this is what’s happening. And then I show them like visually, like these are the comments. This is what it is. mean, where do you see your home competing? Like with a newer one, if you were buying, would you buy a pre-owned versus this one just because you granite? I mean,

Dylan Silver (18:26)

Yeah,

It’s one of these things where you in a sense, it’s really these times like this where there is some I would say uncertainty and potential drift people looking at where’s the next Avenue, you know, are they going to wait? Are they going to you know, buy distress that they going to do new construction. You have to have the ability to pivot and being a broker being an investor having experience with the creative you mentioned subject to deals owner finance.

It’s really that’s how the strong survive right because if you’re if you’re focused and if your whole MO is on one asset class one type of deal it can be tricky when when that does dry up some. We are coming up on on time here though Robert work where can folks go if maybe they’re in the greater San Antonio area or Texas in general and they have a deal that they’d like you to take a look at or maybe would like some some feedback on a deal that they have.

Robert Gomez (19:20)

Yeah, my Instagram handle is just Robert Gomez, Texas broker and just Texas the way it is T E X A S and that’s where you can find me. You can DM me and we can hang out. I’ve also based on all these struggles have built the web map. They can go to the web map.com. This platform is built for situations like we’re going on right now, because my biggest problem was not knowing my numbers exactly how they were, because you think that you bought it like with all in like $7,000 cash.

but then you’re holding costs plus HOAs plus maintenance plus electric water and all those things. Sometimes they oversee them. So that all in number was really hard to come across. But with this, like it’ll show you the logic of the all in actual number and monitor the subject to properties with the monthly pace. And on top of that, it can give you comps like right away. Like if you want comps, like I used to get calls from all these investors all the time.

Dylan Silver (19:58)

Yeah.

Robert Gomez (20:15)

Can you send me comments for this property or can you send me comments for this one or comments for that one? So it’s like, I just send them the link to the page, they sign up and they get comments and rental comments as well instantly anywhere in the country. So, and that was built just out of a big necessity for my business and now it’s open for everybody.

Dylan Silver (20:18)

Right.

That’s great stuff.

Robert, thank you so much for coming on the show here today.

Robert Gomez (20:37)

All right, thank you so much.