Sub-to Scenario
Have 3 properties with people willing to deed to me. Little equity and current monthly payments make it too high to L/O. When I take it sub-to am I then trying to sell the property FSBO. I am very confused as to what I should do after I take the property sub-to.
If there is no equity and the payments too high to l/o what do you want the properties for. You can not eat them. You could take them and not make the payments but that is against the law and I do not think you want to do that. All sub2 means is you buy the property and do not assume the sellers mortgage. In fact you do not tell them of the sale. There are various ways to disguise the sale. Most set up trusts etc to actually hold title. You can get seller to send letter that you are the new RE management company too. Before you buy sub2 you need to decide if you want to keep and rent or l/o or flip or sell FSBO or hire a Realtor. There is no one use for sub2 purchases.
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr
Sounds like you need an exit plan. Tell me what do you know about subject to, your local market, and your goals?
Can you resell at full value fast or will you have to carry? Are you planning on holding and renting out?
I would look to what you want out of these places before you jump at them. We all make mistakes. I make more mistakes than most but you should take a good look at your goals.
I hope this helps.
Answer to the questions:
My goal is to start generating cash flow any way I can - and make this my FT gig. I have a very good feel on how to do this if there is equity in the property but have not been lucky enought to find that deal yet.
I would like to sell quickly, but it's a tough market in my area right now. So yes, trying to figure out how to creat an exit strategy that will generate profits.
If it is too skinny a deal and you have little or no cash flow - run, don't walk away from the deal. You will hate having the burden and no or too little financial reward.
C-
I understand that it may be too skinny. But my hope is to start learning some creative strategies to help me make offers on more properties than just the one's with a good portion of equity.
Post the numbers you came up with through your due diligence.
depends on why they wanna let you sub-2 their house... run an ad in the paper for that particular house right now and start getting a buyers list together... how much down, how much montly payments..and that sorta thing... begin to market now to produce a buyers list... if the seller is in preforeclosure right now... get them to sign a release Authorization form and find out what the payoff is... take the house with an option to buy with you being able to exercise the option anytime within 6months... sell it retail or L/O it within the 6 month time frame... but of course thats only if they are in preforclosure... (if they are in foreclosure, you dont have to make payments... no holding costs) just make sure youfind someone to buy the home.
[addsig]
Here is the info on 2 of my leads (remember, both of these have high mos. payment for their particular areas - so L/O is out...
example 1 Deal:
owe:117K
worth:127K
950 p/mos payment
not a NOD, just wants out of payment
Example 2 Deal:
owe: 137K
worth:140K
$1100 p/mos monthly payment
just wants out of mos. payments, also not behind on payments yet
I recommend you sell on contract for deed. You can get a higher monthly payment, higher sales price, and nice down payment. Buy Locke's course and see how he does it all. These deals are ones that I would take all day long in Atlanta. The prices are just about in line with ATL prices and the deal is perfect for what I look for.