@Dylan Speer what is a subject-to?
All this hype around it, all these people hammering at it, yet the vast majority are all but clueless on transactions.
Subject-to essentially means "if this, I will that", and that's it, just that simple.
It's used, and long been used, in normalized settings for example in selling a property "subject-to" sellers securing a new primary residence themself. For some people, this is really important, they don't want to buy a new home with the sale of current being a question mark, they want certainty, many hold a fear of "what-if" on non-sale of home or a price too low.
And than there is other iterations, for example on various land deals bought subject-to a zoning or other variance being awarded.
See, this is how subject-to is meant to be used.
Now, there is other forms of selling a home where buyer does not need to get financing via 3rd party (bank), namely a Contract For Deed Financing. Or lease with purchase options, these are arguably the 2 forms most vastly used over more years than I can recount, generations.
What your considering here is some franken-sale "monster" of twisting these 2 into a manner neither was ever meant to be utilized as.
It only ever makes sense in context of someone looking to take advantage of the other, seriously.
Because let's look at buyer side. How does over-paying make sense? For a lower interest rate? Ok, that's an argument of buying the rate down, sooooo why not do that with a lender, they let you buy down pts. Ok, so next is no $ to do that. Ok, now we are back to taking advantage, because buyer is NOT capitalized properly, and banks won't lend to them because of RISK of non-performance. So now, buyer is over-paying and under capitalized, what a recipe for good outcomes right (oh so much sarcasm). It's setting self up for failure, because everything ahs to go right for a duration of time INCLUDING equity growth to infill that hole one dug day 1 via over paying.
For seller, you have the stupidity highlighted from buyer side, there is VERY high risk involved for buyer NON-performance. But now, you also gave up control, you gave up all upside, for what, a pile of risk?
If a buyer wants to buy using sellers financing, DO THAT, and there is transactions for that, again C4D. Or LWO.
Sub-to sounds good, and that's about it. Selling a dream that a person with just $5k/$10k can get properties and become a landlord/investor with trash credit and no income..... It's a narrative that sells.... No different than any of the other late night infomercials for generations selling how anyone can make millions doing little to nothing with little to nothing.....
It's all BS. It's a get-rich-quick scheme.
Sub-to assures someone is getting F'd in every transaction. That's the reality of todays market.
Maybe MAYBE in an '08' market it could have made sense for some, it could have been a win-win. But notice, you need very specific series of ingredients to have it make sense.
Today, in todays market, even in foreclosure setting, a person has ready options. Cash buyers galore. Term buyers galore (C4D).
Every instance of sub2 buyers I have seen have been that, chasing rainbows, and with no financial strength to perform going forward. Because those with financial strength, don't buy Sub2 because don't want to over-pay and don't want the mess of it all and being tied to a seller who has issue not to mention the potential legal impacts of DOS and what nots.
As for interest rate, I buy from builders for as low as 5.125 30yr lock. I have done C4D for as low as 4%. I don't need sub2 to get great rates. And if I can do it, so can others.
Sub2 is a pitch, to sell how-to, full-stop.
Will I give away a property on a promise someone will make mortgage payments for me, HELL-NO! That's what tenants are for!
