Subject to mortgage investing

7 Replies

Hi everyone,

I'm just getting started with little experience and minimal financial resources. How do I take my first step with subject to deals?  Also, are there any local investors in the Tampa Bay Area that can teach me about land trusts for our state through this site? I've become familiar with subject to investing but would love to learn more about these deals in my market. Also, how do I create the contracts needed for these deals? I'm very humble and just simply want to get my start this year as I am highly motivated and eager to learn. I live in the Tampa Bay Area (Pasco County, Florida). 

@Roberta James

Welcome. The more you learn the more valuable you are.

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com

Two Great reads, I bought both J. Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbook

Consider checking out HUD homes for small multi's owner occupied gets first crack.

You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good Luck

Paul 

Paul,

Thank you for the great advice given. I've taken it into consideration and joined a real estate investing group in my area via meet.com!!! I'll consider your good reads as well. So far to date I've been studying the market over the course of 2 years. I'm super charged to start making deals this year. I'll look into the HUD mult's since that was something I hadn't considered as well. Student rentals is apart of my business plan too as I live very close to a large University community. It was great hearing from you, thanks again.

Buying subject to is not much different than any other purchase.  The existing loan is simply left in place rather than you getting a new one.  The downside is the fact you're violating the terms of that loan and that give the lender the right, but not obligation, to call the loan. If you go down this road, be prepared to pay off the old lender if they do call it.

Don't fall for the guru BS about trusts.  At best they obscure the ownership.  There is NOTHING you can do to avoid violating the due on sale clause.

Jon, 

Something to consider regarding trusts. I'm attending my first real estate meet up meeting tonight at 7:30 and plan to document my journey every step of the way in hopes that others may be inspired by my success. I appreciate everyone's input so far. It's great having a community forum where everyone has your best interest at heart. Have a fantastic day!!

Originally posted by @Jon Holdman :

Buying subject to is not much different than any other purchase.  The existing loan is simply left in place rather than you getting a new one.  The downside is the fact you're violating the terms of that loan and that give the lender the right, but not obligation, to call the loan. If you go down this road, be prepared to pay off the old lender if they do call it.

Don't fall for the guru BS about trusts.  At best they obscure the ownership.  There is NOTHING you can do to avoid violating the due on sale clause.

 Hello there Jon. Ive read you comment and like the word of wisdom. I was wondering if you would have the contract that would be needed to purchase a subject to. and how to go forward with it step by step thank u

@Roberta James @Ralphy Rosado   sub too in my mind is an advanced strategy and not at all appropriate for beginner investors who are not very well capitalized.

Granted you get into the deal.. but for the seller these are HUGELY risky.. as least as it relates to the credit and potential for deficiency judgment if you cannot execute your plan.

For the established well capitalized company or investor who can simply write a check to pay off the underlying debt at anytime or easily refi.. that's when this is an appropriate scheme.

Touting this to those just starting in the business creates all sorts of havoc for many folks.

I have seen people try this as a beginner strategy in get into a lot of hot water legally.

and Seller get totally fubared vis a vi their credit if the person they deeded the property over to cant execute and goes dark.. or worse does a sandwhich lease option that gets recorded and that lessor goes dark.. its a cluster of the first order.

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