"Subject To" buying question for John
I have a question for John or anyone who can tell me. I just read an article buy John, "Subject To" buying, october 2. My question is, after the house is deeded over why dont you put it on the market?
Another question is, you say to do owner financing and that you can up the interest rate to make a couple extra bucks a month. Do you agree on the sale price of the house up front or after the 2 years is up and the new buyers are trying to refinance? Cause you say you can make money on the appreciation of the home over the 2 year period. I'm very interested in this way of assuming properties. I think this is the way the guy I work for now acquires his properties.
Oh, and 1 last question, "What if the property has liens, do you pay them after the sale, 2 years down the road?
Hope to here from someone, and John i'm very interested in your classes. A friend of mine is working on buying his fourth home out there in Southern Highlands. He buys them and rents them out. I'm in Vegas 2 or 3 times a year and he's always telling me to check it out out there. 
kevinmh75,
Glad to meet you.
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Q. I have a question for John or anyone who can tell me. I just read an article buy John, "Subject To" buying, october 2. My question is, after the house is deeded over why dont you put it on the market?
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A. The reason I do not put the house on the market and I am assuming you mean list with a Realtor or sell it myself at this time is because, I add two years appreciation to the existing market value.
Typical example, the value of the house when I purchase Subject To is $100K, I know that this house will appreciate 5% per year, so I add $10K to the selling price when I sell it. Appreaciation factors can be less or a lot more so I use my Demographic Marketing System research which factors this increase in for me. Just using this part of my three profit centers gives me an additional $10K.
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Q. Another question is, you say to do owner financing and that you can up the interest rate to make a couple extra bucks a month. Do you agree on the sale price of the house up front or after the 2 years is up and the new buyers are trying to refinance?
A. Yes, when I sell the price already includes the appreciation increase during the 2 year period.
If the loan on the property is 6%, I add 2 to 3 points which gives me a monthly passive income for the two year period which averages about $4,800 which is another profit center.
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Q. Oh, and 1 last question, "What if the property has liens, do you pay them after the sale, 2 years down the road?
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A. If the property has small liens, I caculate this in my offer price for the persons equity. Then I pay the liens off.
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Hope to here from someone, and John i'm very interested in your classes. A friend of mine is working on buying his fourth home out there in Southern Highlands. He buys them and rents them out. I'm in Vegas 2 or 3 times a year and he's always telling me to check it out out there.
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Las Vegas has been very good to me as far as investing goes, but I have purchased properties all across the US using my method and so are my students from sea to shinning sea.
John $Cash$ Locke
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Thanks for the reply John! You answering these questions is getting me motivated. The guy I work with now just doesn't seem to want to let me in on the correct and legal way of picking up these properties. But now I feel more confident. Hopefully I'll be acquiring some of my own in the near future.
Do you suggest starting out with one area of acquiring, meaning to just do "Subject To", homes at first then expand into other ways of buying?
Thanks for the reply John! You answering these questions is getting me motivated. The guy I work with now just doesn't seem to want to let me in on the correct and legal way of picking up these properties. But now I feel more confident. Hopefully I'll be acquiring some of my own in the near future.
Do you suggest starting out with one area of acquiring, meaning to just do "Subject To", homes at first then expand into other ways of buying?
kevinmh75,
If there is one thing I preach it is to stay FOCUSED, if you don't do anything else.
I watch the 'Hip Hop' posts even on this board, it reminds of the daily specials at a restrauant, let's see what should I have today? In the wonderful world of creative real estate investing it does not work that way.
Become proficient at one method of investing until you become successful at it.
Then if you feel the need to wonder off with another method at least you will have the method that you became successful with to fall back on when you fall on your butt with some other method.
'Information Overload' will also prevent you from doing your first deal, this combined with "Hip Hop' is the death toll for ever getting started.
Those that advise just do it, remember they have no liability, so if you mess up your first deal it could be your last deal.
I would not want to go to a Doctor who specializes in the foot to do brain surgery on me. This is why I say choose one method do it and do it well.
John $Cash$ Locke
Hey John, or anyone that knows the answer to this, I talked to an agent today and told him what I had learned about "Subject To" buying and he tells me you can only do this legally if the loan is assumable. Is this true? And whats the right way to acquire a property that has an unassumable loan? Get a loan, or have all the cash?
If in agent, you mean a real estate agent, that's not the best source for comparing knowledge. Most RE agents are not familiar with creative RE purchasing, and several are plain afraid of it. You're giving sellers another option besides paying them.
Subject to investing is not illegal. There is the possibility of the Due On Sale clause being enforced, but the chances are slim. A lender will not likely want to go to the expense and trouble to foreclose on a property that is performing.
If this is the method that you think you want to persue, I suggest buying John Locke's Subject to training manual. You'll have the detailed book, John's website, and John himself to help you along the way.
Good luck
Roger
So John,
Are you saying that you get the down pymt. on the front, then a monthly spread due to the rate hike and then because of the 5% increase for the 2 yrs. appreciation you'll get the difference between your asking price and the original payoff amt. when they re-fi?
Does this sound about right?...
By the way, not going to do the birddogging thing. When I get rid of the foreclosure I'm working on, I'll be able to focus directly on "Sub-to", cause...well, you know, .......That's what we do!
Leonardo De Vinci was asked "why was he so successful?" his anwser was "Because I do one thing and one thing only, ...my art!"
Thanks, Clif