Does anyone use "Subject to" or wrap-around to get deals?

2 Replies

I've been seeing a lot of YouTube videos and real estate gurus saying that the subject to loans and wraparound loans are great tools to get off Market properties. It seems a little dicey to me but that may just because I don't understand it. Does anybody else use them successfully?

Sub-2 is mostly an acquisition tool - a means to get properties. Works mostly when the seller's mortgage is less than rents, little equity, and you have the capital to come out of pocket to reinstate/rehab. Seller will eventually want loan out of their name and has potential of investor abuse.

Wrap (or owner financing) is more a tool to dispose of property when there's an underlying mortgage. Potential for investor abuse.  Typically paired with Sub-2. Can be used to acquire property, but unusual in residential, more common in land/new construction/commercial deals.

For either, must be diligent about accounting.

Originally posted by @Sharon Beatty :

I've been seeing a lot of YouTube videos and real estate gurus saying that the subject to loans and wraparound loans are great tools to get off Market properties. It seems a little dicey to me but that may just because I don't understand it. Does anybody else use them successfully?

Sub 2 is a hop skip and a jump away from being criminal.

 

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