Joel's first Sub2 Deal
Yes, yes, yes. I have to admit it. I am still a beginner in some areas of REI. This past year a deal blew by me because I couldn't get the financing lined up fast enough (it was a foreclosure deal). Anyway when $Cash$ came on the TCI scene last year, I was very intrigued by his preferred method of aquiring property.
Well, I got to hand it to you $Cash$, I think this Sub2 deal will be easier than some of my past ones.
Here is the scenario. I am purchasing a property that has a tax value of $65k. Property will appraise for high 60's if not lower 70's Owner wanted 65k. He purchased 5 years ago at $58k and owes $48k. I offered to purchase the property at $58k with me taking over payments and offering an owner 2nd at 8%. He accepted.
I think this deal will be a pretty good one since I would have 15-20% equity in the prop. I also can rent it out at $750/m easy with a Sec 8 Tenant.
I will be able to take the tenant over there Monday and show her the new residence. Now all I need to do is to get it lined up with a loan servicing company, do the inspection and title search and close. Have I left anything out??
Way to go Joel!!!!
I guess "Subject To" does actually work.
Best of luck
John (LV)
Great job Joel! I am just curious...what were the terms & monthly payments on the two notes? I want to emulate success & if you don't mind sharing the details it would help for educational purposes!Thanks & happy investing!! Christina
The first morgage is coming in at 460 PITI and the second we calculated out at 108 per month.
With maitenance, etc we should be clearing 150 Positive each month.
Congratulations Joel.
Sounds like you got a great passive income generator in this one.
joel,
WAY TO GO!!!! CONGRATS!
Let us know how you make out.
Repoman
YEAAA JOEL---WE SAY YEAAAAA JOEL!!!!! (that's my cheer---you can't see me with my cheerleader skirt and pom poms but
You deserve GREAT things for all you do help all us!
Go get 'em!
Hmm gues that $CASH$ could be onto something
All the best to you Joel!
Mel
Joel or anyoone,
What's your liabilty for tenants when you rent out a sub to, or rehab What if the they got hurt on your property (in a sub-to seller's prop)? Who's liable, and will tenants sue?
There are a lot of people out there looking for easy money.
[addsig]
First off, the old owner doesn't own the property anymore. Of course, neither do I. I would put the property into a landtrust.
I find that if you take care of your tenants, they will take care of you as well.
Quote:
On 2003-02-17 13:33, Tanner wrote:
Joel or anyoone,
What's your liabilty for tenants when you rent out a sub to, or rehab What if the they got hurt on your property (in a sub-to seller's prop)? Who's liable, and will tenants sue?
There are a lot of people out there looking for easy money.
<IMG SRC="images/forum/smilies/icon_confused.gif">
Joel,
Did you draw up the land trust yourself? How much did cost you? The PAC EH trusts are expensive!!
Bginvestor
Great Job Joel,
If you need any help with loan servicing or any thing just post it. I love sub-2's also so your success is really our success. keep posting it helps us all....
Great job.!!!!
I had a few comments.
If you decide to go this route then you have eliminated potential benefits, added a benefit or two and made yourself into a full fledged landlord.
If you were to find a tenant/buyer then you get cash when you close, you dont have to do the inspection and paperwork involved with a Sec 8, and you dont have an exit for the future..so your back-end is gone.
The benefit is you get the interest deduction and any future appreciation.
I think I would prefer to have a tenant buyer and make the $$$ on the front and know I have an exit.
I think it works nonetheless but I would rather not be an landlord. With a resident/buyer if they dont work out, you can get another resident buyer in and make $$ again on the front. With a Section 8 you have many possible headaches if the tenant is less than desirable.
I will be reading what happens, good luck!
The thing is, is that I do want to be a landlord and rent the property out. This particular property might not be a hot seller anyway.
And for a quick flip, I would think you would need a fairly new property for that. This one wouldn't really qualify.
But then again, I am looking after a current tenant that wants to move out of a condo and into a house.
Well, I finally closed the deal this monday. Cash helped me get my act together. I used a similar Land Trust that I used when I purchased Bill Bronchick's course a couple years ago. (We have it in our store now)
After all is said and done, I now own this property and all it cost me was $140 in transfer tax.
It is a 3/1 house in an alright neighborhood. Purchased subto with the seller taking a second on the property as a note. Total purchase price 58,000. House is worth 68,000 at least. We will be able to rent it out at $689. This will leave us with a $100 positive cash flow (Props to the CS students).
Thanks always Cash, you opened my eyes to a new way of dealing.[ Edited by joel on Date 04/04/2003 ]
Hi Joel,
I had some questions for you about a similar deal I was trying to do. I tried to send an email but it bounced back. And I can't private messages either.
PS. If anyone has not received a responce from a private message sent to me in the past, please send it to my email address listed below.
Ervan
edickens82@yahoo.com
Joel,
My pleasure to help you on your first Subject To deal. A little hard for anyone to dismiss Subject To deals as a viable investment strategy since the owner of this site is doing them.
By the way, when I looked in the forums I see the little green man next to your name. I asked you before I want a new avatar and a green dollar sign next to my name. To heck with little green men.
John $Cash$ Locke