No Cash Down SubTo Lenders - How Does This Work?

[Ken M.]

I just watched a guy on youtube claim he bought a property with none of his own money. He said he did a SubTo, taking over the existing mortgage.

Then he says, to cover the money that he needed in order to complete the deal, he needed

1. The cash to give to the seller for their equity
2. The money to bring the loan current
3. The money to pay for late taxes
4. The money to pay the real estate agent and
5. The money for closing costs

He says he needed about $55,000 cash total

Here’s the part that confuses me:

So, To get the $55,000, he found 11 investors who each contributed $5,000 for a total of $55,000. He said each investor is making 10% on his money

1. He then says “so, I bought the property using none of my own money and I have one loan on the property, the original loan”.

Is this a common SubTo set up?

Is this called “gator” lending?

Where do you find investors that will do this?

Where is the best place to do these? CA, AZ. TX, NC, GA?

[Chris Seveney]

Oh boy - no he doesn't have one loanlooks like he has 11 and if they are 11 then he just syndicated a deal

i woukd be $50,000 those investors lose all of their $ then be on sites wondering why they lost their money and how bad an experience it was