First off, sub to and pre-foreclosure investing requires a ton of marketing and advertising as well as the need to sift through hundreds of phone, email, and web contacts before finding one worth pursuing further. This require $ and lots of effort (as well as time).
1) Choose sub to when their is equity in the property, short sale when it is upside down.
2) Sub to is a way to control a property without using your own credit and very little money invested (sometimes none)
The win-win is created when you get control of a property with equity and are able to lease option it to a tenant buyer with cash flow, and the "seller" gets out from under their financial difficulties.
3) Depends on your state, but in CA, you either need to get it from an experienced attorney or another investor who has already done so. You can easily be sued and violate laws in CA by attempting this strategy without the proper guidance and contracts.
4) Not necessary, but always an option. I recommend using a third party who collects the mortgage payment, notifies the "seller" and pays the mortgage. This gives both you and particularly the "seller" a source of "protection" (which is limited) as well as info/notification.
Best of luck to you.
Will B
Nov 08 '08, 08:18 AM
