“Subject To” Buyers in Baltimore Area

General Real Estate Investing
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“Subject To” Buyers in Baltimore Area

Nick Winikoff
Member since 2018 · 25 posts · 6 votes

Hi,

I have a small multi family with a very low mortgage rate that I’m interested in potentially selling.

I’m thinking if I subject to the property to someone it would maximize the value of the property.

Is there any forum or group that focuses on purchasing properties subject to?

Thanks!

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Andrew SyriosPro Member
Moderator
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
1y

I wouldn't offer subject to out of the gate. It's really something for motivated sellers, usually with highly leveraged properties and good interest terms. You don't want someone else responsible for paying your mortgage. If they stop paying, your credit is hurt. Furthermore, by having an outstanding loan with no income, it makes it more difficult to get another loan in the future.

Any I don't think it will help that much in selling the property (unless the interest rate is really good). Only real estate investors would even be interested in that.

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    1y

    @Nick Winikoff

    i wouldn't worry about "maximizing the value of the property," i would worry about what meets your goals best.

    1Reply
  • Nick Winikoff
    OP
    Member since 2018 · 25 posts · 6 votes
    1y

    @Nicholas L. Thanks for the advice, but I think maximizing the sale price is my goal on this one.

    0Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    1y

    I wouldn't offer subject to out of the gate. It's really something for motivated sellers, usually with highly leveraged properties and good interest terms. You don't want someone else responsible for paying your mortgage. If they stop paying, your credit is hurt. Furthermore, by having an outstanding loan with no income, it makes it more difficult to get another loan in the future.

    Any I don't think it will help that much in selling the property (unless the interest rate is really good). Only real estate investors would even be interested in that.

    Podcast Guest on Show #121
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    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      1y
      Quote from @Andrew Syrios:

      I wouldn't offer subject to out of the gate. It's really something for motivated sellers, usually with highly leveraged properties and good interest terms. You don't want someone else responsible for paying your mortgage. If they stop paying, your credit is hurt. Furthermore, by having an outstanding loan with no income, it makes it more difficult to get another loan in the future.

      Any I don't think it will help that much in selling the property (unless the interest rate is really good). Only real estate investors would even be interested in that.

      Nothing riskier for a seller than to sell sub to.  full stop.. for the reasons Mr. Syrios points out. 
      U transfer title and lose control yet your still on the hook for the mortgage what could possibly go wrong.. for buyers its fine for sellers in my mind its foolish. Unless the property is such that its only way to sell it.  And even at that you want to do a wrap not a straight sub to so you have the ability to foreclose when your buyer defaults which is pretty common with these deals. U then have to make your payments while your buyer is ripping your rents .. and in Baltimore foreclosures take at least a year and cost thousands.. you could find yourself upside down 25k or more before you knew what hit you.. so is it worth the risk.

      Google All inclusive Deed of Trust  California.. this is hands down the best debt instrument to use if you can .. read it carefully and you will understand what rights this debt instrument gives you as the beneficiary of said instrument. 

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  • Nick Winikoff
    OP
    Member since 2018 · 25 posts · 6 votes
    1y

    @Andrew Syrios it is really good!

    Under 2.4%

    I see what you mean, my thought was that an interested investor would see the value of the cheap debt.

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    • Andrew SyriosPro Member
      Moderator
      Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
      1y
      Quote from @Nick Winikoff:

      @Andrew Syrios it is really good!

      Under 2.4%

      I see what you mean, my thought was that an interested investor would see the value of the cheap debt.

      Why don't you just rent it out then? I would definitely want to keep a mortgage like that even if the property isn't ideal. If it's too expensive to cash flow, maybe try it as a short term rental
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  • Nick Winikoff
    OP
    Member since 2018 · 25 posts · 6 votes
    1y

    @Andrew Syrios thank you for the advice

    1Reply
  • Nick Winikoff
    OP
    Member since 2018 · 25 posts · 6 votes
    1y

    @Jay Hinrichs thank you for the advice

    0Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    1y

    You used the wrong terminology and then you got advice based on that ..

    If you used the term Owner financing, wrap around mortgage, contract for deed, lease option, etc maybe your post would have went differently. 🧐

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