I bought John Locke's subject to booklet which explained - in great detail- how a deal works. It is some of the best money that I have spent so far... (after buying the book, i have done 2 deals in which I will net at least 40,000.)
Anyway, to answer your question, you take the loan over. you then lease the property and make the monthly payment plus a little for your efforts. you then sell the property (in a year or two) and you make some more money.
It works like a charm...
Why would a seller agree to "subject to". They cannot access their equity on the property. I do not get it! Can anyone explain? Please. It sounds exacly like a l/o deal.
Thanks
You first have to understand what type of sellers would allow you to sub to their house. example, people getting a divorce. you will only deal with people who have to sell when it comes to sub toing a house. You end up paying a seller for their equity.
example, I gave one seller 8K for their equity. They were getting a divorce and behind on payments. I made up their payments with part of that 8K and they got the difference. they move out, deed me the house, and I sell it for a profit. once you give them some moving money, i.e. my last deal people are getting 2K, they deed the property to you, they know the loan stays in their name, and all that so called equity goes to you cause your suck a nice guy, or gal.
"..it sounds like lease option..."
They are similar but different.
In lease option, if you look up the owner you will find it is the old owner.
In subject to it will be the new owner.
People dont make these deals from a position of strength but typically from one of weakness and desperation.
He gets his equity because you put some cash in his hand.
He leaves his ability to borrow burdened by the property - but if the alternative is foreclosure with nothing paid to him he may chose this option.
The lesser of two bad deals.
I bought John Locke's subject to booklet which explained - in great detail- how a deal works. It is some of the best money that I have spent so far... (after buying the book, i have done 2 deals in which I will net at least 40,000.)
Anyway, to answer your question, you take the loan over. you then lease the property and make the monthly payment plus a little for your efforts. you then sell the property (in a year or two) and you make some more money.
It works like a charm...
Hi snow,
To start out with “Subject to” investing you should check out these 2 articles:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=146
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&sid=266
and then the Sub to forum:
http://www.thecreativeinvestor.com/ViewForum34-1939.html
Best of luck
John (LV)
The Internet also offers other web sites when you search for "Subject To existing financing"
Eric & Rosa
[addsig]
Why would a seller agree to "subject to". They cannot access their equity on the property. I do not get it! Can anyone explain? Please. It sounds exacly like a l/o deal.
Thanks
You first have to understand what type of sellers would allow you to sub to their house. example, people getting a divorce. you will only deal with people who have to sell when it comes to sub toing a house. You end up paying a seller for their equity.
example, I gave one seller 8K for their equity. They were getting a divorce and behind on payments. I made up their payments with part of that 8K and they got the difference. they move out, deed me the house, and I sell it for a profit. once you give them some moving money, i.e. my last deal people are getting 2K, they deed the property to you, they know the loan stays in their name, and all that so called equity goes to you cause your suck a nice guy, or gal.
"..it sounds like lease option..."
They are similar but different.
In lease option, if you look up the owner you will find it is the old owner.
In subject to it will be the new owner.
People dont make these deals from a position of strength but typically from one of weakness and desperation.
He gets his equity because you put some cash in his hand.
He leaves his ability to borrow burdened by the property - but if the alternative is foreclosure with nothing paid to him he may chose this option.
The lesser of two bad deals.