How My Partner and I Got Paid $800 to Buy a House

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I love subject-to’s and I’m still astonished that more investors don’t do them. I’ve made a small fortune being the subject-to expert in my area and getting all of the sub-2 deals that everyone else didn’t want (or didn’t know how to do).

So here are the details of my latest subject-to, which will hopefully teach you how to use this method to get plenty of no-money down deals over the next few months.

First off, a partner of mine was at a networking event and as usual was letting everyone know that he was looking for sub-2 deals.

He met a woman who knew a motivated seller who wanted to do a subject-to, however she really didn’t know how to do them and didn’t want to learn.

So she decided she was going to wholesale the sub-2.

After going back and forth with her, we agreed on a wholesale fee of $500. (Yes, you read that right. Always negotiate. Personally I would never wholesale a property for $500, but obviously, I’ll let other people do it to me all day long).

We inspected the property and it was a nice single family house with plenty of equity and an immediate cash flow of $200 a month because it was currently occupied with tenants. (Who we thoroughly checked out.)

Since this woman was wholesaling and didn’t know much about sub-2’s, we helped her out with all of the paperwork.

Then we went to closing with our settlement attorney – always go to a settlement company when closing sub-2’s – and we ended up walking away with $800, even after paying the wholesale fee of $500.

How did we do this?

Well… first, we negotiated to have the seller pay ALL closing costs. I try and get the seller to do this on every deal I close. All they can say is no. Second, the seller had already paid the mortgage for the month on the property by the time closing came.

And the seller agreed to let us keep the rent for the month, even though he’d paid the mortgage. (How I loved motivated sellers.)

When all was said and done, we ended up with $800 and a property we own.

Don’t let anyone tell you that you can’t do no-money down deals as often as you’d like. The name of this business is “creative real estate” so make sure and think of the various ways you can structure a deal to keep as much cash in your pocket as possible.

About Author

Jason R. Hanson is the founder of National Real Estate Investor Month and the author of “How to Build a Real Estate Empire”. Jason specializes in purchasing properties “subject-to” and has purchased millions of dollars worth of property using none of his own cash or credit.


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