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Beware any real estate strategy that violates a simple rule of grammar "never end a sentence with a preposition." The reason we politely say only "We will purchase your property Subject To" (and not finish the phrase) is that what follows is not a particularly helpful sales pitch. "Your loan." "Your credit." "Your financial future." Subject To deals are about convincing a seller of property to deed an investor the property with the investor taking as little risk as possible. When buying any real estate, an investor requires capital. If you buy the property for cash, then you require no financing. When you get a loan to pay for the property in your name, you have purchased the property with your own credit. Subject To allows you to buy property, neither using your own cash nor your own credit. It is the topic of most zero-down programs that are sold on late-night TV (Lease Option is another). While buying a property, Subject To is vastly superior to Lease Option. WHATS IN IT FOR ME (INVESTOR)
2) Little financial risk involved, as experienced Subject To investors convince the seller that they will not let the underlying loan go into foreclosure. However, the investor is only legally obligated to keep loan current if the agreements that the investor provides say so. 3) Houses generally have some equity in them. Further, the Subject To buying guidelines normally suggest going after newer houses to keep repair costs down to a minimum. WHATS IN IT FOR ME (SELLER)
2) Allow their credit to build with positive payment history, now that the investor "will be paying" the loan 3) Save closing costs from an outright Sale 4) Buyer right now, as opposed to waiting Subject To is one of the most widely discussed and sought after purchase strategies. The Gurus who teach it can be summarized as follows: If someone is willing to give you their house for nothing, then take it. But if you don't plan on keeping the note current, then be prepared for two things the gurus don't teach: 1) Not having a conscience 2) Litigation If you have questions and would like more dedicated and one-on-one/small group education, we can set up live in-person or on-the-job learning sessions - upon request or at a regularly scheduled time. Related Articles -BASIC EDUCATION OVERVIEW - Basic Investing ARV - After Repair Value Birddogging Contract for Deed Dealing with Contractors Estimating Profits Evictions - A Primer Executory Contract Foreclosure Overview Foreclosure Types Overview Hard Money Loans - a/k/a Asset Based Lending* Lease Options Leverage MAO - Maximum Allowable Offer Multi-Family Investing Basics as Presented by David Lindahl on March 4, 2006 No-Money Down Real Estate Investing Options Part-Time v Full-time Passive Investing For Beginners Pre-Foreclosure Profit Calculation Remodeling for Beginners Rent vs Buy Is Really Rent vs Sell Seller Financing as Investor Buying Tool Skiptracing Subject To Wholesaling Return to Listing Return to Investor Education |
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