Help Me: Subject 2 Purchase a Home in Cumberland NJ

5 Replies

Hello Guys I am a newbie and I am getting involve into real estate  

I am searching for deal like all of us do , and I came a cross a deal on County of Cumberland NY 

 I need to know your thought on if it is good deal or bed deal 

Home is $50K market value 

Owner owes the bank 100k 

owner is behind mortgage  12k 

home owner wants me to give  them 3k to move out to NC 

the owner wants to do a short-sale however they put the property up for sale and only got 2 offers and none of the 2 went thru .. fall out 

my strategy is to offer a subject 2 .  I  will pay-off they amount they owe 11K + 3k move out and take over their payment $650 per month Mortgage

My Exit is :  Rent it out $1000 to $1200 per month ( 3 bedroom + 2baths) 

Sale it : as own finance ( Rent to Own Type)

Please tell me if i am in the right path .... 

Any Thoughts or Insights on this will be very helpful 

Thanks BP Friends

Oh hell no!  You're going to be into a $50k property for $115k.  How do you think that will possibly work out well.  You think you can seller finance a $50k property for $120k to someone?

Well, let's do a quick analysis...

1. Why sub-to instead of a short-sale? If you don't know how, then this is a classic example of why you should learn how to do real estate before you try to do it.

2. What is the cash-flow? Remember - the rent has to cover EVERYTHING: PITI and management plus your profit after you establish a cash reserve.

This sounds to me like a case of what can happen when folks go out and try to do something BEFORE they learn how to do it.

I'd look elsewhere unless you're willing to put forth the effort (and likely some "investment") to learn how to do short sales properly.

Another alternative you might not already know how to do is called a "sandwich lease option". Again, if that's a new term to you, don't try it. Get educated first.

@Fabio Smith

A short sale is something WAY upside down.

Like your house, worth $50K, note to pay off is $100K.

Say you have a car, blue book worth 10K, note to pay off $20K.


Sub2 is for little equity, perfect house condition, PITI payment is less than rent by at least  $300 a month. You have to pay PITI and maintenance on a sub2. Sub2 is not for folks that are broke and is a bit complicated. Sub2 if the loan get called you need financial means to refinace and pay off the existing loan(s). Sub 2 is good for short term, like buy, fix and resell. Sub2 is not godd for buy and lease to own or buy and wrap.

I hope this helps.

Wow .. Thank you Guys for your Prompt response ... 

 I was Kind excite about it .  just looking into 

  I put 14K down  and rent it out for $1000 per month 

$1000 - $650 Mortgage payment = $350 cash flow 

  I will study a bit more before I get into something .

 Is there a good Article explain about subject 2 vs a Home Note .. 

I saw few videos where someone was buying a property just like my situation Via ( Note Buying) and profit good out of it . 

Sorry guys I know it might sound stupid question But , I need to ask 



Hey Wayne Brooks 

Oh hell no! You're going to be into a $50k property for $115k. How do you think that will possibly work out well. You think you can seller finance a $50k property for $120k to someone?


 (Please correct me if i am wrond here )

 If someone has no credit and no money to put down . They might want it .

Now if someone with a good credit , go to bank and ask for 30 year Mortgage 

how much will they end up paying . 110k ++ Maybe ? 

By the way the appraisal for this property is $65k  but the bank want is willing to get 50K to get the owner out of the mortgage .

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