How prevalent are sub-to's?

Question

So I have been trying to figure out my business plan as I am studying REI.  I am told this is an essential part of starting so you know what you need to do year by year and what not.  My main question is how often are you able to close a sub-to deal?  I know a lot is heavily involved in how much you market and have the possibilities brought upon you, but would I be able to get a ball park answer from anyone?

I will be going into a 3 year graduate program next year and in my ideal world (ultimate goal) I would like to have about 30-40 properties before I am finished in those 3 years.  I do have money saved up but I would like to keep that money for myself and not have to worry about putting any money down for deal (especially while I am in school).  My goal is to have the 30-40 properties and then also wholesale to have other income.  I would also like to take some of my money I were to get from wholesaling to pay off the homes and have a HUGE stream of passive income while I am at a very young age.  But, this all goes back to how many properties I would be able to acquire via sub-to.  Thanks for any help!

Barbara Grassey · Answer

First, you should check with the laws in your state.  Florida just passed a subject to law that applies to owner/ occupants, but not to investment properties. Illinois may or may not have passed legislation on this.

Subject tos can be done and depending on your market, they may actually get a little easier to do because conventional financing is drying up and owners are about to realize that they need to supply financing if they are going to get their houses sold.

The most important thing is to NEVER, NEVER, NEVER take an adjustable rate loan subject to.  You don't want it and it will kill you.

Ethically speaking, you must make the payments on time.  Just because the mortgage is in someone else's name doesn't mean you can run roughshod over their credit.  Remember that you are taking on responsibility, even if your name isn't on the line.

Owners may be more willing to wrap a mortgage or do a contract for deed rather than letting you take a property subject to.  Don't rule out those options.

Best of luck to you.

Barbara

Lynn Z · Answer

Are you saying subject to?

Ingrid Nagy · Answer

What is a sub-to?  I have not heard this term.