Quote from @Theresa Hansen:
1st time on the forum. 61 (my husband as well) years old and just starting out in the real estate investing arena. Truth be told, if I knew earlier what I am now learning I could have started earlier!!
@Theresa Hansen: You mention Subject To as an option.
You have indicated a problem that you are close to retirement and would like more security. And as such, what are your options.
Here is the strategy we've implemented. I'd be curious to hear your take on it.
This is different than putting 20% down ($80,000 on a $400,000 property) on each property you buy. That is what most people do. That alone stops most potential investors. But, set that thought aside for a moment.
What we are talking about here, is a different process. It starts with buying properties "off market". That means you don't find these on the MLS.
A certain amount of people are willing to sell on Creative Finance, like Subject To, (Subto) & Seller Finance for various reasons that I explain. Once an agreement has been reached, the purchase & sale go through escrow just like any other transaction.
The property can be used for a rental, fix & flip, STR or Lease Option, whatever crosses your mind. Yes, you'll need some training, but being trained properly is a good thing anyway. Don't let any mentor or coach tell you that you can do these for zero down.
Usually you can find these for $15,000 or so in “up front” money.
Here are the differences and why it can be done.
By buying “off market”, the selling price can be reduced by the amount of the fees the seller would have to pay if they used a real estate agent. That can be a savings of $25,000 on a $400,000 property. Then, since you are taking over the seller’s loan, you have no loan origination fees and don’t have to use your credit. That saves you thousands of dollars.
And since you are getting their 3% interest rate instead of a 7% from a bank, your payment is $1,602 instead of the bank’s $2,129. A monthly savings of $527 that goes into your pocket.
Plus, since the seller has already been paying for a couple of years, the principal has been paid down $15,000.
So, you are “in” for about $15,000 and have all of these great benefits. Do 3 a year and in 5 years you are retired, and having fun.
And of course, You can continue doing these and build generational wealth.
Here is an example of what we did, we bought this property for taking over the payments plus $3,000 using Subto, the right way. With the purchase and sale agreement. (Click to enlarge)
We saved them from having to pay $12,000 in realtor fees and other costs. It made sense for them because they needed to sell without going onto the MLS.
So yes, these are plentiful, you just need to know how to look for them and what to do after you find them. It's a very quick and profitable way to invest and prepare for retirement.
