All Forum Posts by: Doug Pretorius

@Jonathan Liu That depends on how much it would cost to buy the tenant out, or how much rent you'd be losing by leaving them there. As a very general rule of thumb you don't want to be paying more than 75% - repairs of market value for investment properties. That would normally allow you to immediately resell if you had to and at least break even.

@Jonathan Liu That's not a substantial discount. That's full market value when you take costs into account.

@Anne Williams As you've already been encouraged to do, even though this is not an investment property per se, it is still a large investment for you and you should try to get a good deal not just overpay because your agent tells you to.

Appraisals are not the subjective 3rd-party valuation your agent is pretending they are. Appraisals are done by people not computers, and those people do not want to gain the reputation of killing deals by coming in too low.

It sounds like you have already done your own research and determined what you believe to be the property's true value. Make your offer based on that. Not the false hope held out by someone who's making money off of you.

@Andre Williams As @Kelly Iannone asked. Why didn't it sell? In nearly all cases a house not selling on the MLS that needs no repairs is...drumroll...overpriced.

Don't get me wrong. I love overpriced listings. Because sometimes the seller didn't realize it was overpriced and their agent didn't communicate that reality, so they become motivated since they didn't get any offers.

Is that the case here?

@John Smith No you don't need to get a mortgage yourself. Sub2 is when the title is transferred while leaving the mortgage in place as-is. So you are buying the house, but the mortgage will stay in your parents name. A sale-leaseback can be done as a sub2 without issue.

All you need to move forward is a real estate lawyer or title company who understands that you're transferring the deed without paying off the mortgage. With that one exception it is handled exactly the same way as any conventional sale. Then all you have to do is start paying your parents mortgage for them.

@Rob Gillespie I can't help but wonder, if the "wholesaler" has done all of that, what do YOU bring to the table? It seems to me that they already did the deal and you're out of luck.

If I have a great deal with financing and tenant all lined up, you can bet I ain't wholesaling that to nobody! The only way I'm wholesaling something is if it requires financing I don't have, it's logistically too difficult for me to rent or flip, or it's not a good enough deal to meet my requirements.

@John Smith No problem at all. You're basically describing what's called a Sale-Leaseback (if you want to do more research on it) except you're not going to charge your parents any rent.

There shouldn't be any tax implications for your parents since they're not making anything on the sale. Presumably you will have to pay capital gains if you ever sell it.

With that much equity you also won't have a problem if the bank ever decides to call the loan. If you have a job you should easily be able to refinance, or get a HELOC on your primary residence and pay it off.

Credit and DTI have nothing do to with sub2's. That's the whole point, the loan stays in your parent's names.

@Carlos Alexander Don't wait for them to expire when you'll be competing with 10,000 agents and investors. Contact them before they expire like this:

1. Go to zillow
2. Search your area of choice
3. Click "newest"
4. Skip to the last page (I couldn't find a way to sort oldest-newest)

Now you have all the old listings that nobody is bothering with. If you want to call them copy the address into a reverse address search to get a number. Or you can mail them. Or you can go knock on the door and leave a note if they're not home.

@Tony R Fox FSBOs are For Sale By Owner. FRBOs are For Rent By Owner.

@Austin Works I don't think you should compromise your investments requirements. You might want to check if they can put you on an email list for specific neighborhoods. They may not segment their email lists that small, but it's worth asking.