Subject to real estate investing

7 Replies

Hi I am new to real estate my question is how do you find subject to deals I have no idea where to begin. Thanks 

You start out with finding motivated sellers in your local market or wherever you feel comfortable investing. They can be online like "Craigslist" with key words "Must sale fast", "Very Motivated", Ready to Sell", in the newspaper, FSBO's (For Sale By Owners) ect.. You can also invest in low cost marketing material that attract them to you.

Google Marko Rubel. he's a good source for Sub "2" material. You will find some good reviews about him & some bad, but his free advice is very helpful with getting started. 

Hope this helps!

Once you start marketing for motivated sellers, you will find the possible sub to deals. They're usually the ones where the owner is behind on payments, but not yet in foreclosure. 

Hey man, don't take this the wrong way, but if you don't know where to find Sub2 opportunities, are you ready to actually EXECUTE Sub2 deals? Make sure you get training and a competent team in place (including an attorney) or you can get yourself in trouble.

The reason most new investors start with wholesaling is because it's not too complicated. IMHO, new investors may not want to jump into Sub2's as their very first deals.

If you have the knowledge and the relationships in place to execute - awesome! I think as far as marketing goes, the Sub2 deals just come thru your normal marketing for motivated sellers....

@Dev Horn  

Personally Sub2s are super easy. Probably easier then wholesaling in some occasions. Are there concern and items to be aware of certainly however it is a great way to buy houses and I would rather teach someone Sub2 over wholesaling all day long..

As for how to find them that really depends on your exit strategy. Are you buying for passive use or massive use. Because the list criteria for marketing is completely opposite.

If you're network marketing then the entry questions are important to find the canidates based again on the exit plan.

I'm glad you like 'em.  As for how easy they are, i guess these new investors will have to make that call for themselves.  i wouldn't touch them without an attorney involved, but that's just me.  I don't want to be responsible for anyone else's nightmare, and you can end up in that situation if you don't know what you're doing.  But hey, like I said, if you understand them and think they're easy, awesome!  Go for it.

People that sell sub2 arent looking to sell sub2, you have to sell them on it.  You are looking for a motivated seller, most of the ones I've done have been in foreclosure, they aren't as concerned about their credit as most.  

Sub2 deals aren't that complicated, but you do need to understand what you're doing, you can do a lot of harm to the sellers doing it wrong and some states have some laws in place because people have gotten burned. There are also a lot of issues the gurus dont tell you about like insurance and dealing with banks when your POA gets stale.

Like Michael said, you need to begin with the end in mind. I used to do a lot of sub2's and sell them on L/O's. Got burned pretty bad when the market tanked. Still make sub2 offers, but mainly to keep my money costs down on rehabs.

Anyway, your marketing should be targeted to motivated sellers, preferably ones that aren't credit conscious, then just make offers.  There's some skill there, too, you dont really want to to say "I wanna buy your house subject to", nobody outside of the investing world would have any idea what you are talking about.  Its more like "OK, I can get you out of this mess, but I'm going to need to leave the loan in place to make it make sense on my end...SO, I can pay you $2000, then I'll catch up the back payments and make them monthly, this will actually improve your credit....does that sound fair?"  Plenty of ways to crack that egg, but the better you are at presenting it, the more yeses you'll get.

Most people will not tell the seller that if they do a subject2 that the lender can call the note due which I think is being dishonest with the seller and give everyone a bad name. Be honest be upfront put it in writing for the seller's protection in case your lie to the seller.


Joe Gore

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