Using Subject To (SubTo) and Wraps To Buy Properties - Not Using Banks

[Ken M.]

Subject To is taking over someone's loan

Wraps are creating a new loan that "Wraps" someone's existing loan

There are other Creative Financing Methods to meet seller's needs, these are just a couple. New investors should become aware of how to do them correctly, so when opportunity arises, they can be used poperly.

I frequently use Subject To %& Wraps when buying a property, but I look for these characteristics before I propose it to a seller.

The first thing I do is determine how motivated the seller is. That means asking appropriate questions. If the seller needs to sell quickly for any number of reasons, chances are better that they will agree to letting you take over their mortgage, pay them some cash and deed the property over to you, so they can move on with life. There are things you need to know and that's where we come in by teaching those methods.

I use Subject To & Wraps in Seattle metro, WA Phoenix metro AZ, Austin metro TX and I’d feel comfortable using it in Columbus OH, Indianapolis IN Huntsville AL, Atlanta GA and other areas of the mid west and south. I haven’t tried it in L.A. or SoCal because the “buy in” risk is much higher and people with a lot of equity don’t generally agree to a Subject To or Wrap. I focus on where it works and is profitable.

The first thing to look for is a property that fits a profile. An unwanted Probate, a Rental, Where someone has lost a job, a Property that has been on the MLS a long time, A situation where the owner is downsizing or upsizing to meet a changing family's needs. Life changes, needs change, people are looking for solutions.

If you would like more info, we provide a sheet that explains what to look for.