All Forum Posts by: Shiela R.

Hi @Joe Norman. Equity is usually scarce with subject to as already mentioned. If there is equity, it is probably not a sub to deal. But could be a L/O. IE A seller who has to move closer to her aging parents but doesn't need her equity in the very new home she just bought. That's more a L/O strategy.

And if there is little equity, you may not want the deed.  There is still due diligence that must be done. And disclosure, clear communication, ethics, etc. as in every deal (obviously;).  However, when a seller is financially distressed you want the seller off the deed.  

You have to be able to determine if the seller has good or bad debt. Your main concern is that a seller with financial issues will continue to have financial woes that could affect the title to the property if the deed is still in their name. IE if a seller gets judgments from creditors they can be attached to the real property they own - the same house with a mortgage you are responsible for.  But if the market is declining or at the bottom and the home is in a decent area? That's when sub to makes sense.  I've had people pay me to take the deed.  This strategy was seen much more when I began investing in the early 2000s.  

Hope that helps!

Hi @Ashlee Andrews.  Great question!  Some good info here. It is frowned upon to work with more than one agent at a time. Agents have to use an exclusive contract to represent you as a buyer.   Now, when they present this is up to them (or rather, their employing broker). And, if one agent gets in a huff about this, find another agent.

Just want to add that for some of my more savvy buyers, I have ever made my exclusive right to buy agreement specific to the address in the additional provisions.  So, I'll ask them to sign the agency agreement when I meet them at the property, specific to the property address.  I do this bc they do their own marketing and I don't think it's fair to charge a commission on a property they found on their own. But, I am covered on my end with a signed agreement.  Maybe a good way to handle the relationship with your agent friend? :)

Hi @Griffin Brand :)  So much to say but basically, this can work for both parties.  It's an excellent way to buy with no money down.  And can help a seller, depending on the situation too. IE, they need to have their payment taken over to buy/rent somewhere else due to divorce/job transfer, etc. but there is little equity for a retail sale since they just bought 10 months ago.

Of course, contact a real estate attorney but I was taught, in addition to the buy and sell contract, to get a signed and notarized authorization to release loan info from the seller. A POA would work too. You are taking over (agreeing to pay) the seller's existing mortgage. You also want to be added as additionally insured.

Hope that helps!  There is much more to it like how to talk to a seller and pitch subto. It's not something you lead with;) Feel free to DM me.

Hi @John Cervera, I love your enthusiasm.  And some good questions.

To answer if these homes will sell, you need to look at what is selling. Essentially, you need to know your market. What are the characteristics of a recent SFH sale? Are they only 3/2/2s? Are the 100 year homes selling but only if they have a complete remodel? Are they simply not selling? Or only selling if they have a primary suite? If they are selling, how long or find the DOM (days on market).

An agent *should* be able to help you with market data, average DOM and what is selling. However, most agents don't know jack about REI unless they are a REI. You should ask them what types of properties they own. Where they own, etc.

You might want to take a beat and seek out your next local REIA meeting. Rub some elbows. See if you can buy an experienced and successful flipper or private money lender (often these people are flippers too) a drink or lunch in exchange for some info. Same with investors. And, yes def get on wholesalers lists.

Finally, once you know the answers to these questions, then you buy at a discount to buffer any unforeseen problems or market conditions.

Hey @Daniel D. I agree, I like things to move quickly.  That being said, there can be nightmares in any deal and at any property.  70/30 rule is solid to evaluate a flip.  Make sure to allocate an "uh-oh" fund of 1-3% depending on price point. And buy at a discount (like 20%). 

Also, I'm sure some lenders will chime in here but if the property is sold too fast with not enough of a significant improvement to justify the price underwriters can get very nervous.  Something to keep in mind for resale.

You could always build up a reserve and invest in a long term hold down the line to get some of the tax benefits.  There are so many ways to invest!  

@Deborah Fischer great job!  I especially like hearing your perspective about over-improving.  I think there is a time and place where this applies but you seemed to have timed it right.  And, it's all about knowing what your market will bear.  Again, great job! :)

@Lauren Hutchinson, welcome to the party that is REI :) My first 25 or so properties were acquired subto or with lease options. Feel free to DM me.

@Aaron Lynch, nice!  Congrats :)

@Richy George, go to your local REIA meetings. Post here on BP and on FB (in targeted groups for REI) with your area and criteria.

Best of luck! :)

@Andy Ramdeen If you can't envision it in your mind, then you need to hire a designer.  Don't be cheap.  This is a super important part of successful investing. And where most make mistakes.  Almost all of the rehabs I do are a DIY homeowner who didn't know what they were doing, and therefor didn't sell or rent for high enough. I come in and make it right.

Also, know your market. IE If homes with quartz slab are selling or renting faster and for more, put in quartz slab.  If formica works, then use formica.