Another subject to question - give example of a good deal
Can someone give an example scenario that would be a good candidate for doing sub to? Especially as relating to the purchase price. If the seller owes nearly or very close to what the property is worth, how do you make money? If the owed amount is close to the ARV, then its probably a better short sale candidate, right? I think the general idea ive seen discussed here and in articles is that you take the deed on a subto, then rent the place if it will cashflow.
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Randal,
"Subject-to" is just a method of financing a deal. The numbers on the deal should be EXACTLY like any other deal.
There was a GURU during the boom years that would advocate paying retail for property if you could get it sub-2. The idea was then to "sell" it for an amount over the retail price with a higher payment. That was a ridiculous idea and I would guess that most of the people that followed that ridiculous theory are flipping burgers about now! Obviously, those houses would be upside down now and most were probably foreclosed upon long ago!
Paying retail is NOT a good idea regardless of which method you use to finance it!
Please don't misunderstand what I'm saying. I've bought properties Sub-2 and think it's a valid method of financing the property, but I only bought them at a HUGE discount!
Mike