Sub2 Vs L/o First Deal
Hello everyone. I'm a total newbie here, so please bear with me. I've taken in alot of information recently and am still trying to sort it all out.
Anyway, REI sounds like a great activity to get involved with, even on a part time basis, which is all I would be able to do at first.
It also seems to provide a great opportunity to own my first home at 24, when I thought I would be unable to do so for years to come, thanks to some shaky credit and living paycheck to paycheck (military salary isn't much!).
So I want my first deal to be my own house. The market here is a good one (baltimore, no. MD, so. PA), and with alot of military and government in the area, there are alot of sellers transferred and wanting to sell quickly.
My question is, from my perspective, would I be doing better for myself to look at sub2 or l/o properties, or would either be fine? It seems like l/o requires more money upfront, which in my situation might not be the best option, but perhaps there are other things which make this more attractive of which I am not aware being so new to all this.
Also, is it best to approach the listed realtor or agent with sub2 or l/o offers, or to try and deal directly with the seller? Has anyone had much luck going through agents?
Thanks to all in advance for any advice, and hopefully this will be a good beginning to a part-time (and eventually full-time?) career.
As far as investing goes (the buying part anyway), I'd prefer Sub2 over L/O. The reason is because in Sub2, you actually become the owner of the property. This fact alone will solve some of the potential problems that can come up in a L/O.
As far as money down goes, I've seen both methods use as little as $10 to get control of the property.
Either way, I'd recommend trying to find a loan servicing company/property management company to handle the collecting and dispersing of funds with the transaction. A third party company doing this greatly reduces the uneasiness felt by all parties.
Roger
You are off to the right start. The Internet is a GREAT tool for finding real estate investors in your area. Local investment clubs, and networking events, local small business administration (SBA) are also great ways to develop relationships. Call a few mortgage brokers, realtors, and appraisers requesting additional information on events or investor groups in the area. Honestly, real estate agents do not understand Sub2, it is not their bread and butter. Begin with an ad or create flyers, here are a few my wife and I use to generate community interest:
WE BUY HOUSES
We take over payments
No Equity, No Problem
No commissions or fees
Got HOUSES? MUST SELL?
Fast Cash
WE BUY HOUSES
We buy fixer-uppers
FAST CASH PAID!
MONTHLY PAYMENT CRAZYNESS
Fast Cash or Take over payments
Do not be shy, ask anyone and everyone regarding area real estate investors and before long you will be connected with successful investors.
[addsig]
You will not need money to do L/O or subject to's. I have been doing them both since '86 and have never paid more than $10. I would try for a subject to. I personally will not do any more L/O's because you loose control and are at the seller’s whims to sign the deed.
Beachboy
IMHO the only way to buy on an L/O is to get everything signed and in Escrow right up front. The escrow instructions will deliver the signed deed to the correct party when necessary. Get a performance mortgage signed and recorded to show your interest in the property.
It's still less of a sure thing than the Sub2 but sometimes it's the only way to go. And there is no reason to let a good deal slide by if you can tie it up in some reasonable fashion.
just my .02