Subject-to

[James Peoples]

Is there anyone in Sacramento, Ca familiar with subject-to and lease option deals? I would like to pick your brain while having bunch.

[Brian Gibbons]

Hi @Matt Devincenzo thx for vote.

Sub2 is viable with the correct documentation. Many attorneys don't do them. Agents generally don't like them for a multitude of reasons.

I like buying on sub 2 and renting out, rent to own, or resell for all cash.

If you are buying on terms from a seller or Landlord, and not living in it, eg renting it, you are not under Dodd Frank.

Remember, Dodd Frank is only for you dealing with Owner Occupants.

Advantages Of Buying "Subject To"

Taking over property "Subject To" has several advantages that are especially nice if you are a beginner or have limited funds and/or limited credit. Mainly, you have the ability to own nice houses without having to come up with a large down payment or having to qualify for a loan, and the closing costs are minimal.

You also have multiple exit strategies. For instance, you could keep the property for yourself as a rental, or you could fix it up and retail it.

You can even pass the no qualifying deal onto your new buyer.

Disadvantages Of Buying "Subject To"

As for the disadvantages of buying "Subject To",you always have the due-on-sale clause issue.

The due-on-sale clause will limit your ability to resell the property without paying off the loan.

This is because many homebuyers will be reluctant to invest money and move into a property when there is a chance that the bank may call the loan due, even if the chance is a slim one.