All Forum Posts by: Account Closed

@Jason Harris There is a lot of power in the technique. There are some podcasts I'm told on BP that get into more detail. Since it is a complex transaction you probably want to study it pretty thoroughly. Send me a PM if you have any questions I can answer.

@Joseph Ali Now, for the tricky part. I tried to format this for BP and it is still a work in progress. 

@Joseph Ali Sure, the spreadsheet I am working on doesn't yet have the elegance & visual simplicity that I am striving for but it will do for now. This is part 1 - I'll post the next section immediately following

@James R. Copeland Coast Guard is great stuff. I've been pulled over for safety checks and always been treated politely and professionally. 

Finding the buyers is easy. But, finding the right properties that "cash flow" is a little tougher. I've built a buyer's list. BP gets seasick if I get too detailed in a post but you can always email me. Most people who have a "problem" property don't know what their options are nor do they know who to contact. They think they are just stuck. Finding them is the task. I've made it my mission to be very, very good at finding them.

@James R. Copeland Heh, heh, heh. Yes, it takes a little explaining. First thanks for your service. Where do you serve and in what capacity? My son-in-law is a Naval Capt. 

Second, don't go after pre-foreclosures in Washington State. They are severe about it. I can explain why later. But, now to the task at hand, Subject To is finding people who want to move or need to move: job reassignment, job loss, they want to "move back to their home state", they don't like realtors and people traipsing through their house for showings, they don't like the uncertainty of being on the market, they have gotten military orders for a reassignment, etc. It's filling a niche for moving quickly. 

By taking over their loan and their payment, they can move on with life. I then find business people who have a good income but since they are not W2, banks won't deal with them. I mark the house up to reflect the convenience they receive by being able to get into a house without the hassles of a bank, and they are willing to give a down payment of $10,000 to $25,000 which I get to keep. Pretty cool, eh?

@Casey Wohl Sure. 

Here is a list. I have a spread sheet as well. When you buy a house conventionally, you put 20% down so a $200,000 house means you are into it for $40,000 plus closing costs and carrying costs. 

When I buy a $200,000 house with Subject To, I am into to it $100 down, maybe $5,000 to the seller for "walking money" and some closing costs. I'd much rather rather risk about $7,000 than $40,000 etc.,

@James R. Copeland Hi Jim from Vancouver Washington not Vancouver Canada. Here is a comparison of some types of real estate investing. Hope it helps.

In this Spreadsheet I am comparing:

OPTION: 1 Conventional Financing for "Buy & Hold" for a Rentals

OPTION: 2 using "Subject To" and Reselling to a Tenant Buyer

OPTION: 1 As a Rental, the Kitchen and Bathrooms needed updating requiring about $5,000 of work in order to be ready to be a Rental. From the Renter I would get first month’s, last month’s and deposit. I would have to have a loan from a bank with 20% down or about $45,000 to qualify.

OPTION: 2 Selling it to a Tenant Buyer requires no rehabbing on my part. The Tenant Buyer will do (or not) the rehab to their liking. From the Tenant Buyer I get an Option Payment of $25,000 and a rent payment when they take possession. There is no deposit. Here I simply take over the existing loan and payment & need about $15,000 “Cash on Hand” to cover expenses & reserves etc. I can sell the property for more because he doesn’t have to qualify at a bank and will pay a slight premium.

Let’s see how the numbers work.

@Craig Wilcox "What will you do if you see another 2008 coming?" That's the thing, you won't see it coming. It won't be derivatives on the secondary market with questions about who actually owns the overly inflated note, this time. It is more likely to be a domino effect called "contagion" of some financial event like failures of major banks in Italy and Cyprus or some other odd "black swan". We made it through the Savings and Loan crisis, we made it through the Tech Bubble burst, we made it through 9/11, (boy has that been expensive), we made it through 2008, albeit painfully, and we'll make it through the coming challenges. The key is to not have exposure when that happens. That is one difference between conventional buy & hold vs Subject To. With Subject To, you have less risk and weather the storms.

@Dustin Ruff Phoenix, Mesa, Scottsdale, Tempe etc (Maricopa County) will do just fine for the next couple of years. New high tech jobs are coming in, a study says we need about 15,000 apartment units to meet demand, Crazy California is taxing people out of California into neighboring states (Think Arizona), as boomers retire they start looking for places like Arizona.