Should I Or Should I Not?
I have a opportunity to do a sub to and need advice please.
290K FMV
259K Seller price
20K out of my pocket
4500.00 Holding cost for 3 months
4K for closing costs
9K for realtor at 3%
Will try to sell it myself for first month. House is a 4/3/2 Beauitful and in need of no repairs and in a upper mid class neighborhood.
Thoughts please 
Thank you
Also,
They have 2 mortgages totaling 220K and I will be giving them the difference between the 239K and the 220K within 18 months.
is that 259k after the the 20k out of pocket is paid???
Pete
is that 259k after the the 20k out of pocket is paid???
Pete
No. The 259K is total price. 20K now and I would owe them 239K minus the mortgage balance of 220K leaves them 19K due to them within 18 months.
Can anybody give me any advice on this deal please?
Thank you
How are you selling the property? Out-right, L/O, OWC?
I am just curious how you are only holding the property 3-months with a realator involved and then not paying the owners for an additional 18 months.
I am selling the property out right. Average DOM (Days on Market) is 36. The contract states that within 18 months I will pay them the difference of the price we agreed upon 259K and the mortgage payoff minus the 20K I already gave them.
I will clarify my statement by saying I am not a subject to expert at all, but I don't think the numbers work or at the least they are very thin:
$290
-$220 loan balance
-$ 20 downpayment
=====
$ 50
-$ 9 Agent Fee
-$ 4.5 holding costs
-$ 4 closing costs
=====
$32.5
-$ 10 taxes ???
=====
$22.5
-$19 to owner in 18 months
leaves $3.5 K to you if all the expenses are outlined as above and nothing goes wrong. Taxes will probably be a bit less though and you will realize a tax break when you pay the $19K, but the use of that money for 18 months.
I'll throw in my own opinion that this doesn't sound like a sub2 deal to me, where typically your consideration for receiving the deed to their house is that you will take over paying their mortgage (relieving them of payments they can't make, saving their credit, stopping foreclosure, etc.).
Your deal sounds more like plain owner financing: they'll let you pay them 20K now and the balance in 18 months. It seems like they're basically getting their $40K equity over time. How is this a deal for you?
If you were buying it for $220 - 230K, maybe I could see a deal--at least you'd be getting the house at 80% FMV. With your deal, you're getting it for about 10% off FMV. As was mentioned above, seems a little thin.
Just my .02,
Andy
it is not enough profit for me. they aren't motivated enough to meet my needs..............km
I guess your right about Owner Financing more so than Sub To.
I did not factor in the taxes so as it looks on paper right now, it is very thin and that is if nothing goes wrong. 1 more month holding and I'm paying out of my pocket.
Thank you all for your help in this.