Numbers on a successful sub2 deal?

5 Replies

Could someone provide me with numbers on a good "sub2" deal (starting from acquiring the property "subject to" and then lease optioning it to a tenant buyer)? If I didn't provide enough info, please feel free to ask.

Haven't done much on Bigger Pockets as far as networking and knowledge gathering. Figured it's time to start reaching out! Thanks much and look forward to hearing from everyone! 

Sub-To/Lease Option No Details

Kris, this is to vague for me to address, "numbers" like a specific deal or how many done or spreads/profits???

Anyway, whatever was asked, search some more on the topic and drill down to specific questions, you're asking for a book to be written.

Speaking of writing books in the forums, I feel dumb!

All these years I've been posting and people can't search comments very easily.

If you go to my profile, you'll see my recent posts and can go to all of my posts, they only show the first few words of the post and you can't tell if there is anything important or worth reading!

So, I just solved that, I hope.

I will begin my posts with an indication of the topic covered and if details might be given!

That way, looking at past posts can be skimmed and identified if I feel the information is worth clicking on it.

Happy day, that means that I'm not going to keep repeating posts 500 times to the flavor of the month as we get new folks hitting on the same old stuff that has been hammered away at before, Makes life easier if someone wants my opinion and much easier for me, saving my fingertips.

So, thanks for your post as it caused the light to go off to the obvious. Should have done that thousands of posts ago!

I'll post this idea elsewhere. :) 

@Bill G. Sorry, it was a very vague question. :) I'm specifically looking for spreads/profits on  sub2 deal.  Did a quick search on the forums and there was plenty of information on how to structure a sub2, but little info on spreads. Maybe I'm not searching the correct key words. Don't know a whole lot about the topic, just trying to soak up informaiton. In your oppinion, what is a worthy spread in a sub2 deal (considering, you put no money down and are leasing to a tennant)? 

Almost 18,000 posts Bill! I must say as a newbie to biggerpockets, I didn't think I would get someone of that calliber to answer my post, I'm honored! Please ask any other questions that I might be missing. 

@Kris Kaufman 

flattery will get you everywhere, LOL

Lots of factors play on any deal, most don't carry much of a spread without adding value to the property. Don't get carried away with all the justifications investors try to claim as to adding value simply because they were involved, value is to the property, not to those involved. I've solved many problems that were more valuable than could be assigned to the property.

Search "distressed properties" then look at the definition of "market value" as to the legal and economic and appraisal applications, best to look on an appraisal site.

Real estate isn't like buying clams in or out of season, getting what the market will bear simply because you find someone that will agree to pay a price, search "predatory real estate practices" real estate is highly regulated, fresh clams, not so much.

So, to say what is the average spread.....isn't one really, it would be ever changing. Most sellers willing to do a Sub-To are somewhat distressed and equities can be slim, but each case is different. If you're not touching a property, you may be looking at a 15% price change that includes transaction costs, meaning you may clear about 10%. That's not where money is made, at least ethically. Making improvements, improve appearance, function, use and you add value.

I suggest you study real estate, why and how RE is valuable, such basics when understood will help you see why and how things are done, looking at marketing systems or methods of moving properties won't teach real estate functions, responsibilities, value or the basis of legal aspects. After that, you'll see what profits are possible in applying various types of transactions to a specific property or even to a geographical area. Good luck :)

Bill G.

Thanks for the input Bill! It's a broad subject, but you gave me food for thought.

Been reading many posts on here dealing with lease options and I quickly realized two things: 1.) I agree wholeheartedly with your stance on predatory real estate practices and 2.) You pop up in almost every discussion on BP! I can only hope to attain that blissful retired state someday, sipping my coffee, helping RE newbies find their way :)

Looking forward to reading your other posts.

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