All Forum Posts by: Account Closed

You were approved for 5% interest rate on what type of loan? A conventional mortgage? I'm just curious. It sounds like you will buy the house with a mortgage, use other money to rehab the property, then try to sell it as a flip. Is that right?

@Account Closed

Thanks for the info! I will read about a sandwich lease option also. 

Sandwich option? Is that a wrap where I buy the house sub 2 and sell it to someone else?

@Darrell Shepherd

Thank you for the response and detailed advice. I see that you agree with many others that sub to is not a good strategy for a long term buy and hold. 

I have some some cash available for minor repairs but a major expense like a/c would be going on a credit card. 

There are 2 houses in this neighborhood that I've got my eye on. Both are updated and have been for sale for a long time. I have owned a house in this neighborhood for 9 years, so I feel like I know the area and a little of the history of these properties. They are across the street from my house that I have rented out now. One home just sold in the neighborhood within a few weeks for $114k. The 2 houses that have sat for a long time are priced at $125k and $139k. That is why I'm guessing they are priced to high. I've seen pics of the insides and they look nice and updated. 

I'm gonna keep studying and learning before I make any moves. I want to build a solid reputation for myself. 

@Brian Gibbons

Thank you for the response. It seems like several people agree that sub to is not a good strategy for a long term buy and hold. 

@Davey Wilde

Thank you for your response. I will be checking all potential subject to deals to see if they have a fixed mortgage. I definitely want that. I don't need a changing interest rate eating up my cash flow. I've been studying a lot about subject to deals. I will start learning about lease option also. I own one rental property in this neighborhood already. I'd like to get a few more properties in the same area. As far as owner finance, doesn't the house have to be paid for in order for the owner to owner finance it for me?

Would you ever use the "subject to" method to get a buy and hold property if you had to pay full retail for the house? 

I've watched several of my neighbor's houses sit for 6 months or a year with a for sale sign in the yard. I see other houses selling around them, but theirs never sells. I see their pictures on zillow and the houses seem nice. I think they don't sell because they are priced too high. 

I want to send them a letter or go knock on their door and tell them I'm interested in buying. I want more rental properties. I don't have cash for a 20% down payment to get a mortgage on them. I'm thinking about trying to get some properties "subject to" so I can get them with very little money up front. With these properties that people are selling, I'm thinking that they are in rent ready condition since the people are trying to sell them. I could get in them with very little money upfront and then rent them right away.

Any thoughts or advice is greatly appreciated. 

Thanks for your advice. I own another rental property in this neighborhood. Tenants do pay for all utilities. I already have a property manager. He charges 6% plus one months rent for placement. I did not include the placement fee in my percentage. As far as CAPEX percentage, I will adjust it after I get to inspect the property. I think the roof is only a few years old. We had some hail storms down here in GA a few years ago. I think I remember this place having the roof replaced. I will know for sure once I get to inspect it.

 I have not included numbers for rehab. As far as I know the property is in good shape and doesn't need any work. Both units are currently rented. Thank you for the advice though! I will add a rehab section to the template that I'm making. I might need to add some numbers there after I inspect the property. Also, I don't want to forget about rehab costs when analyzing numbers on the next property.

@James Green

I did try the BP calculator and I think it's a great tool, but I want to learn to analyze numbers without it first so I can know how it works. The calculator does so much for you that I'm not actually learning how to do it. Also, I might not always have access to the calculator. I need to know how to figure the numbers on paper.