Possible "Sub To" deal
I am new to REI, just learning how it all works. I ordered the "sub to" manual and should be getting it in a few days but I do have some questions at this moment. I have a few leads that I would like some ideas on ,if they are possible. I do know from other posts that some people do "sub to's" with low equity properties, basically if I am correct , by putting it in a PACTrust, finding a RB with a downpayment, write the contract to be say 2 years and at that time have the RB refinance or sell for the FMV pay off loan and then split or get all appreciation and equity built up over the two years. I have the following lead:
Single family 4/2 , needs minor repairs, Owner owes $127,000, wants debt relief and will sell for loan balance and would like some extra if possible. As far as I have seen comps are getting $145,000 at this time in that area. Owner all ready is open to stay on loan and doesn't expect any at the end , so no splitting required. Owner currently lives in house and wants out the end of may, so that gives me time to find a RB without any holding costs.
Would this property be good for the "sub to" , trust deal as I described above ? Did I get that right in the first place ?
The other lead I have is:
Single family- 5/3.5 , no repairs, wants $235,000 , appraisal is $250,000, comps are from $260,000 to $300,000 in that area. They owe $145,000 w/payments of $1300 but doesn't want to remain on loan. They want out within 4 months. I have to see what that area is like in regards to if it is an area that would be easy to sell in. With him not wanting to be on the loan I will say a "sub to " is out of the question, so about the only way I see a deal is to get a L/O from him to sublet, but he is insistent to get away clean in 4 months to get another house. If anyone has any ideas if this can be worked I will appreciate all the help.
Thanks, T
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