Did you know you can buy a property with an existing mortgage or loan? You can if you get it “subject to.” This comes with property deeds, titles, liens, and much more that this episode will discuss. Join Renee Williams as she talks with her co-host, a medical professional turned real estate investor Camille Davis. We get a peek into Camille’s journey from nurse to real estate investor as she tells her story and her working model that allowed her to buy 40 homes. Curious? Learn more by tuning in.
---
Listen to the podcast here
How One Mom Bought 40 Homes
We're with Camille Davis. Camille, how are you?
I am great. I'm so excited to be here and meet Renee. Renee, there was something that drew me to you from the very beginning. I feel this was meant to be, so I'm excited to be here.
Me too. I feel like it was meant to be as well. Tell us a little bit about your real estate investing career. How did you get started with all of this?
I don't know how long we want to make this story. I was working at MD Anderson Cancer Hospital. I was a nurse and ended up getting pregnant with our first child. I was on maternity leave. I knew that I probably wouldn't go back. I knew I was going to stay home with my child, but I didn't let them know that. I was just on maternity leave, working from home. They offered me another position. This was my dream position. It was social work. I thought I would love social work. It was a hard decision for me to quit my job and stay home, but I knew it was the right decision. I ended up quitting to stay home with my kids, and it did drive me crazy.
I had no idea. I didn't know that I was such a business person. I never even thought I liked business. My whole life was in the medical field. I was doing the medical field. That was the only thing I knew from school. I thought business sounded boring. When I was home, my mother-in-law was editing a book from a real estate investor. She was helping him edit it. She sent me the book and said, "Can you read this?" I had all this time on my hands because I had this little baby that slept all the time. My mind was bored to death because it's my first child, and I have all this time when he is napping. I read this book.
Honestly, I didn't understand hardly anything in this book. I remember it vaguely saying, "Get the deed." I'm thinking, "I get it. Get the deed." At the end of the book, it talked about tax sales and that Houston, Texas was the best place to do tax sales. It talked about how the county will foreclose, and it forecloses out a mortgage, and that it wipes out all the other liens on the property, except for a mechanics lien. We don't have to get into all that. I was like, "You can just go to a tax auction, buy a property, and all you're paying for is the taxes?" I was like, "That seems way too good to be true." I started to research more on it.
You can go to a tax auction and buy a property, and all you're paying for is the taxes.
I ended up finding all of the information about tax sales in Houston and ended up going to my first tax sale. My husband was like, "It can't be that easy. You need to research. You need to look into things." I did a ton of research. I went to one of the tax auctions. I had three properties picked out that I didn't research. I kid you not. I watched one go and came with Texas for $20,000. That property at the time was worth $120,000. I drove by it, and there was nothing wrong with it. It was empty. I just sat there and felt like my mouth was going to drop to the floor. I was like, "Did I just witness this?" I go back the next month to the tax sale.
There were tons of people there. On the first one, there was only one guy on the property. I realized it was the 4th of July because the auction was on the first Tuesday of every month. I learned a lot. It was harder than I thought it was. You had to go with cash. These properties were going higher at the other auctions that I went to. They were going higher than the first one that I saw. I thought, "I got to catch these before they hit the auction. This is so competitive." When I drove, this was in my neighborhood. There were twenty homes. I started noticing these homes, and I'm like, "I'm going to write them down." I started writing down all these homes.
I have a question about the kids. At that time, it's not abnormal for it to take some time between the time that we're first exposed to something until we do it, which is so important when we talk about our exit strategy or having passive income. You're not going to run out and buy the first investment property. As soon as somebody tells you about real estate investment, you're not going to buy a house the next day. Ninety-nine percent of us won't do that. It will take time for us to evolve, learn, and get the education we need. The fact that you started with one baby had two kids later, and you going to your first auction is normal.
It takes a little bit of time.
It does take time to pick up, learn, and understand the vernacular and the verbiage to get up the courage to go and even spend the time to do it. What do you think about your feet in your shoe and how it feels? Your toes probably would have. That's what happens when people start getting an education. I call it dropping it in your spirit or dropping it in your energy or aura. You start getting these little things dropped into your spirit about real estate investing, and these particular activators start peeking up in your brain. You notice things you never would've noticed before. It's intuitive. It just happens.
It's like when you learn a new word, and you see that word everywhere.
What were you thinking? You saw the empty homes. What was the next step?
At first, that was like, "That home's empty." Probably three homes down, I'm like, "That home's empty." I went down the next street and was like, "That one's empty." I started getting curious. I went back and wrote it down. I'm like, "I'm going to look these up. I'm going to figure out what's going on." I wrote them all down. I had twenty homes. This is just my neighborhood. This is not a huge section. This was Atascocita. It's in Humble, Texas. It was Atasca Woods. That was the exact neighborhood. It's a bunch of homes.
I was intrigued. I was thinking, "What in the world?" I go home, and that's when I'm like, "Let me look these up. What can I find out? What's going on?" Even from Atasca, I learned how to look up some stuff. It wasn't like it was brand new for me to find the owners, but ten of those properties had different mailing addresses. You could see the owner's name. You can see the property address. You can see they have a different mailing address. I'm like, "They're not even living in the house," which they were empty, and I knew that. The other ten still showed that was their home address. I sat down and wrote 10 letters to the 10 different mailing addresses that were not living in the house.
This letter was on yellow paper. You hear yellow letters, but this is before I even knew about yellow letters. It was not professional. I was a little embarrassed. I'm thinking, "This is so unprofessional." On there, I said, "I was driving through the neighborhood. I live in the neighborhood. Your home looks empty. I'm not an agent. I don't even know what I would do to help you. I'm just curious about what is going on with the house. Why is it empty? Maybe I can help. Maybe I can't. I don't know." I then put my phone number and my name. I got a call. The first call I got back on those ten letters, she said to me, "You can have the house for $1,000. I'll sign it over to you. Give me $1,000, and it's yours."
You should have seen me when I got the call. I'm in the van with my kids. The kids are all making noise, and I step outside because I'm like, "These are my letters. They're calling me." I stepped outside and shut the door, so it was quiet. It was in a parking lot. I'm jumping up and down like, "I got a call." She said, "You can have the house for $1,000." I was in my mind thinking, "Is this possible? Can I do that?"
It's not that you can't do it. It's like, "How can I get this done?"
It changed from not knowing anything and being vulnerable and scared to, "This could happen. How can I make this happen? What if I make payments for her?" My husband said, "Are you crazy? How are we going to make our house payment?" We had the first one that we'd ever bought. We'd been in there for a few years. I said, "Let's rent out our house, and we'll move into hers. The money we make off at the rent from ours will cover her payment." Our payment at the time was only $1,100 a month. In the new house payment, it was $1,500 a month. I put a sign. He's like, "Only if you get it rented first are we going to move into this." I'm scared of even saying this, but let's do it.
It was before he had a license. At this point, he was not a realtor.
He just got his license not so long ago. This has been several years later after we've been doing this for some time. I put a sign in the yard. I went to Lowe's and got one of those signs that say, "For rent." I even hand-wrote, "For rent," and put my phone number. I had someone to rent within a week. I had calls immediately from someone to rent within a week. I looked at my husband and said, "It looks like we're going." He's like, "My gosh."
At that point, I'm like, "I get the deed." I went to the home documents where we purchased our first home. I found the deed. I copied the deed. I found on the county record their names. I put their names in as the grantor and my name in as the grantee because I could tell that's how it was when we bought the house. I copied it. I knew to change the legal description. I knew to change the names. Other than that, I copied the date from our purchase when we bought our home.
How do you then settle up? Where I get crossed up on this is the actual mortgage company. What happens that I've seen on the properties I've purchased is that those loans are not assumable. How do you get past the bank calling the full loan due because you've now transferred the deed to someone that the bank has not approved to take over that mortgage? How do you get through all of that? That's the burning question for me.
Luckily, I was a little bit naive at this point. I didn't know what call the loan due meant. I didn't know it would even be a problem, crazy enough. When I got the deed, I went and filed it. I was scared to file it. I walked into the county office downtown. It was eight stories or whatever it is. I find out where they record the deeds. I look at the thing and see, "It's the fourth floor." When you go in there, it's like you're going through the airport. It's all this security. I was like. "This is intimidating." I get up to the fourth floor. I've got my little deed there and had them notarized.
There were all these business people with their stacks of documents to file. You can tell they were lawyers and all that. I walk up there with my little paper and hand it to them. They look at it for a while. Those minutes felt like hours. I'm just sitting down in there. They stamped it and said, "Do you want a copy?" I felt like I was robbing the bank. I was like, "I'll have a copy." There was a part of me that thought maybe I was doing something not legal. I go down to the car. My husband's waiting there with the kids because he was the one who parked, and he just dropped me off. I went out and said, "They took the deed." He's like, "Get in the car. Let's go."
Filing somebody else's property deed feels like robbing a bank. You just don't think it's legal at first.
That was how we did that. I did get authorization to talk on her loan. I got third-party authorization. I was able to talk to the loan. We were able to pay the loan that way. From there, she ended up taking an insurance check. When I got all the breakdowns of the loan when I talked to the bank, she was paying an insurance policy that was $5,000 for the year. I got an insurance policy that was $2,000 because she took a check for $3,000. I don't know this, so I'm changing the insurance. I went through this process to get on the phone with the insurance. All I had was authorization for the loans. From there, I learned to get a power of attorney so that I could talk to the loan, the insurance, and the HOA.
I got better at it the more I learned from this. She took the check and cashed the insurance check because it was written in her name. I learned from there to change the mailing addresses for everything, for the mortgage company, insurance, and all that. We ended up refinancing the home after a year because my husband thought a police officer was going to knock on our door any day. He kept thinking like, "We were going to get something in the mail. We were going to be in trouble." We ended up refinancing because he was nervous.
From there, we got our second home with no down payment. We were able to refinance because we already owned the home. We were able to rent out our other one. We rented our other one out for $1,500 a month. Our new house payment is $1,500 a month. Because I got the insurance down, I got the payment down to $1,400 a month because I got lower insurance. We're making $100 a month.
I want to unpack some of that because this is so good. The reason why it's legal is because the owner of the property, who was your church friend, owned the property and had a mortgage with the bank, but she was the property owner. As a property owner, you can deed it if you own 100% of the property, or if all of the owners agreed to deed that property to someone else in the United States, you could do that for no money. There are filing fees. There are things that you can pay for. You can sell your property for $1.
You can do whatever you want in the US of A. You can leave your property to your cat, whatever you want. If you own the property, you can do what you want. It's completely legal for someone to deed you their property. There was no surprise there. The shocker for me is that her mortgage company allowed you to take over the payment. I'm still stuck on that clause that says the entire amount is due. When you took over her payments, did they ask you for your Social Security? Did they pull your credit? Was there any approval process?
No. That was the beauty of this whole thing. I just said, "I'm going to start making these payments." The bank didn't care who made the payment. I was like, "I didn't qualify. I didn't have to put any money down. I started making these payments." I did put money into the house because it was a mess because she was going through a divorce. When I tell people about this now, they'll say, "How can she deed you the house when there's this loan owed?" It's not like a car. For a car, you don't get the title to the property or the car until you pay off the loan. For a house, you get the title upfront at the title company. You get that deed, and the bank is a lien against the property. That's why the bank has to come to foreclose to get ownership back when you get behind on your payments.
They can't come to take property because the person on loan owns the property. That's the difference. Sometimes people get confused about that. What I did learn is I did go to an investor group after this and told another investor, "This is what I did." He looked at me and said, "That's illegal. You can't do that. You can get in trouble." I did freak out a little bit. I was like, "I did something illegal." I then went and did the research myself. I went and looked up the loan document on the property. It specifically states in there that if you sign it over, you can put it in a trust.
In my first ten properties, I had them deeded directly to me. What I'll do now is make an exception to the deed of sale clause. The bank can come back and say, "You don't own the loan for this property, but you own it." The bank legally can come back and say, "We're calling the loan due." That's what that does on sale clauses. Meaning that they can say, "You need to get a new loan. You need to get the new loan or a loan in your name." There are lots of ways you can do that. That's not so scary. If you already own the property, you can always refinance. You can always sell the house. There are options, but most people are scared of it that they never do it.
That's me. I'm so scared of it. Now that you're saying it, it makes sense because it's been deeded to you. If the deed is recorded, you own the property.
For most people, you have to go through the title company because the title company is going to make you pay off the lien. You're going to have to get a new loan. If you don't go through a title company, you take whatever lien is around the property, which can be scary because what if there's an IRS lien? What if there's a child support lien? What if there are all these other liens? After doing this for a while, I realize, "I don't care. I'm going to take the liens with it because I don't ever have to pay this loan off if I don't want to. I can keep renting it in the future." It's a different perspective.
Tell me about the trust. You were saying about holding the properties in a trust now. Is that how you do it?
I do that now because I have learned that in the due on sale clause, there is an exception to it if the property is transferred to a trust. The bank accepts transferring a deed to somebody, a new owner, or a transfer of title if it's into a trust. The reason they do that is because the property owner could put it into a trust and could still be on the trust documents. The beauty of a trust is the trust documents never get filed with the county. The deed that shows the trust's name is filed in the county records, but the trust document stays at home in your filing cabinet and is private. No one knows who's on that trust document.
Is it a different trust for each property?
That's what I do. I create a land trust and put the name of the street. That's the name of my trust. If it's on Brazos Bend, my trust name is Brazos Bend Trust. If it's on Stone Gables, it's Stone Gables Trust. I name it with the name of the property. I do one trust for every property. It's a six-page document. I change the name of the trust and the address. It's that simple now I've got a trust made.
Does the trust have to be filed somewhere with someone, just the trust itself? Does it have to be filed with an attorney or CPA?
They don't have to be. If you want to start showing trust entities on tax returns and all that, you can file and register them. I don't. I keep mine as paper. I keep them in a filing cabinet, and then I will have my LLC be the beneficiary. For all of the money and tax reporting purposes, I run it all through my LLC. The trust is like a pass-through, and I report everything on my LLC.
I want to pause there to say Camille and I are not CPAs. We're not attorneys. We are not any type of person that's legally giving advice here. I want to pause there and say this. As you're reading, keep in mind that you need to do your own due diligence always. The other thing is that Camille and I are both in Houston, Texas. What flies in Houston may not fly in your state, county, or municipality.
You've got to do your due diligence. The things that we're talking about doing, they work in Harris County, Texas, or Montgomery County, Texas, but that does not mean that they are going to work where you live. Please do your own due diligence before you get knee-deep and try and get these properties, and then you come back and be like, "Renee and Camille told me I could do this." It's great information. Camille. I know you have 40 of these. How do you end up with 40 of them? How are you sourcing your deals?
I've taken over way more deals than that. I've probably done 250 where I went and got a deed. Some of them are listing services. I get the list 3 to 6 weeks before the property forecloses. It is a subscription, but it's worth it because it's your most accurate foreclosure website for Houston. Before that, I was trying to find people behind on their HOA or was trying to find them empty or behind on their taxes. I was looking for all these things, but the least amount of time and effort on my part was to get that foreclosure list. I then would drive the foreclosure list, and for all the ones that were empty, I would track them down.
Get that foreclosure list and track down all the empty homes that the bank hadn't taken yet.
Because the bank hadn't taken it yet, they had maybe two weeks left before it was going to be completely gone. I was tracking them down. I was finding them on LinkedIn and Facebook. I then started paying for people search, which was expensive but was worth it because I was able to get them on the cell phone and say, "Hey." Most of them are like, "How did you get me? This is so freaky that you got my cell phone number." Now, from 2010 to 2015, I already had 30. In 5 years, I got 30 properties. I got way more than that. I sent 60 to the attorneys. I held on to those 30. I got so many so fast that that's when I stopped at 30 because it was hard for me to keep up with them all in managing them.
Are these cashflowing properties that you are leasing out?
Yes. Most of these people that I found had done loan modifications. They had been behind, and the bank worked with them and rolled all the back payments into the end of the loan. They then had gotten behind again. By the time I found it, they were on their second round of being behind. Their interest rate was 2% because the bank was like, "We're going to put a 2% interest rate on this. We're going to roll all these payments." They're all cashflowing because I can rent them all for at least $300 to $500 more than what the mortgage payment is.
They're all in great shape. When I got them, they were all newer, nicer homes that were in nice neighborhoods and great schools. Little did I know that those are the best landlord properties you could ever get because you're not dealing with people that you're chasing payments from. These are families that want nice schools and nice neighborhoods. They pay. I don't have to be like, "Where's your payment?" Everybody pays. As a landlord, I've got the best properties I could ever have.
Most of these properties were purchased between 2010 and 2015. Are you telling me that I can still do this now? Are there still properties that are in pre-foreclosure, and this model still works?
I just got one in May 2022. They're harder to find because the market's higher and people can sell, and they put a foreclosure ban on all foreclosures. They stopped everything. I did get one in May 2022. It was her first home. She ended up getting married and has another home. She was renting out this other property. During COVID, she got behind on the payment. Even though the renter was paying her, she got behind because her husband ended up dying.
People still get in situations, no matter what. My thing is to help people and make it good for everybody involved. You can still get these, like for people who are getting divorced. I got a brand new home. The couple wanted to split in different directions. They couldn't sell it. They tried to sell it at the title company and were coming to the closing with $3,000. The buyer wasn't able to get qualified for the loan to buy it.
The title company came to me and was like, "I know you do these. Maybe you can save this couple because they're going to start letting it get behind because they've already left the house." I stepped into that one. They weren't even behind yet. They were almost behind. I said, "I will step in. I'll make these payments, and you guys can go your separate ways." I put no money to bring that one current or anything, no money out of my own pocket. I turned and got a renter right in and started covering all the payments. It still happens. It's harder to find, but I know it works.
I love this. I wanted to give you the compliment to say you are brave, courageous, and wildly creative to be able to do this on such a large scale. I'm always floored by the fearlessness of women in our ability to create wealth and do whatever it is that we need to do. We will figure it out. Camille, that's what you did with this. You figured it out. I wanted to also let the audience know that you and I have some great things coming up that we're going to be doing together in the future. The audience will be learning a lot more from Camille Davis. We're going to start working on some real estate investing episodes coming up here. Readers, you're going to be reading a lot more from Camille Davis.
Both of us. You're a powerhouse woman. We're going to do this together.
If the audience wants to reach you, how do we get in touch with you to learn more about subject-to and how to do what you're doing?
The best place to get me is my Facebook page. I did have a website for quite a while. I'm tracking down so many people that I don't need the website anymore. I am finding them, so it's just my main Facebook page. It's Camille Andrus Davis. I am on LinkedIn. I'm also on Instagram. From Facebook, you'll be able to find me.
It's Camille Andrus Davis on Facebook. Readers, you'll be reading a lot more from Camille coming up. That is it for us for this episode. Camille, thank you so much for being on the show. I sincerely appreciate your time. This was so much fun.
You're wonderful. Sorry if it was way too off with all those kinds of things.
It's great to have all the information. We're going to make sure that our readers can get in touch with you if they're interested in doing this. You will be back soon.
Thank you.
Important Links
About Camille Davis
Camille Davis is a real estate investor and creative finance expert who currently owns 40 single family homes. Camille is a serial real estate entrepreneur with multi-family developments, construction projects and a coaching/mentoring group for women called the Women’s Wealth Collective. She and her husband Kyle have 4 children and have managed over 250 "Subject To" transactions in Houston, TX since 2010.