A VERY Basic Sub To Question
No...it's not about the DOS clause!
Given that current rates are so low, what advantage do I gain using an existing owner's finance?
Is it closing costs? Is it leverage due to seller's distress?
It seems like such a popular strategy. I'm obviously missing some key principle(s).
I'm very close to purchasing John's course.
In search of enlightenment.
Well, using someone elses financing means you don't have to have financing of your own. No downpayment either. You just take over.
The leverage advantage is important and as an investor, traditional non-owner occupied funding will cost you more. In subject to you control a property will a small amount of money and leverage the existing financing (if applicable).
Eric & Rosa
[addsig]
perfecto.
Glad to meet you.
This is what it is all about...
"If people like you they'll listen to you, but if they trust you they'll do business with you."
I teach you how to gain peoples trust, then how to apply your Subject To knowledge to get the deal.
John $Cash$ Locke
"Given that current rates are so low, what advantage do I gain using an existing owner's finance?"
You get to make money....pretty much the bottom line. with sub to.....I really don't care what the rates are to be honest.
Please correct me if I am wrong.... But, don't you also gain the advantage of not having to pay Capital Gain Taxes (40%) since you don't ever really own the property. Just finished John Locke's Training Manual.... Looks Pretty Good <IMG SRC="images/forum/smilies/icon_confused.gif"> [ Edited by NWInvestor on Date 11/21/2003 ]
But you DO own the property if it has been deeded to you. So you would pay on those gains, no? Z
Technically the deed and the note are two different things. That is why you can buy the deed. Therefore when you buy the deed you own the property. However, you still have to take care of the liens otherwise you may lose the property to foreclosure.
perfecto -
Trust me on this one...Subject to is the way to go when acquiring properties. Why would I want to be liable for a loan in my name when I could just take it over Sub2. Granted I am ethically and morally responsible for the loan that the seller trusted me to make the payments on, but technically I am not liable for the mortgage. I usually like to take the low road more so than the high road. And for me Subject to is definitely the low road. I don't need a bullseye marked on my chest with banks, lenders, attorneys or people trying to sue me. Some more food for thought, just how may loans will the bank allow you to make until red flags go up? They may consider you a risky prospect if you have several loans out there. But, with sub2, no new loans, speedy acquistions, no stopping me!!! Good Luck!!
Eric
You may be asking the wrong question. Why would you want to place your name and credit on the line if you don't have to? You will get ample deals where you may have to get a loan latter. Save your debit to income ratios for deals you have to use it. Til then take the less personal risk.
If someone will give your there home tax benifits and all just say thank you.
Sire
I agree with sire,pick and choose when to spend your credit, as well how much would you pay to get non-recourse loans on all your deals?
A simple and basic question I thought.
It certainly resulted in a tremendously enlightening series of replies.
Thank you all.
A reason you might not want the subject to.
One or two days ago an investor in arizona told us how the lender was insisting that he refinance. The disadvantage is that you must be forever prepared for such a letter - and thus while you dont need to commit to a loan now you always need to be in a position to make a new loan if you are caught.
That is a good thought to be aware of bobo2.
However, dont let this caution frighten any of you sub-to investors. Know and learn your state foreclosure laws. Even if the bank does send you a warning letter, they still are only scaring you at this point, and they may have no intentions of calling the note due because it is performing. Even if they do call the DOS, they will still have to go through the entire foreclosure process.
In Illinois, it may take 7-9 months to complete, which is plenty of time for you to sell or refi. In Georgia, you'll have about 30 days. That is why I suugest that you be familiar with your local foreclosure laws, you will know your time frame better and be able to take the banks warning letter with a grain of salt!
Best of Success!
BAMZ
Hi Everybody:
Could anyone please list
the Sources of finding the SUBJECT TO
DEALS?
sayana null
Please buy John $CASH$ Locke's course... It's straigt to the point, simple yet very effective...
The sooner you buy and read the sooner you'll understand
Perfecto,
The advantages are many:
1. No limit to the number of loans you can have
2. Lower interest rates that non-owner occupied
3. No closing costs
4. Many times, no money out of pocket at all
5. Able to close quickly
The negatives are few:
1. Possiblity of DOS issues, remote at best
2. ?
3. ?
Buying sub2 is the neatest thing since lines on paper.
Try it, you will like it.
[addsig]
Hey William,
Good to see you on this board. I dont know how you have time to do everything you do!
The family on this board will definately beneift from your expertise!
BAMZ
(Brock - IL)
[addsig]
Hey Brock,
Thanks for the welcome!
Looking forward to helping any way I can.
Willliam Tingle
WilliamGA[ Edited by WilliamGA on Date 11/25/2003 ]