Between these two strategies, options and subject to which of these two is more widely used and why. Keep in mind that I am in California and supposedly the laws are more strict here.
I'm not sure I have any idea which is more common. The guru's talk about Sub 2 a lot more but that's because its a low-down strategy and ever since Robert Allen the guru business has been all about low downs.
The point is not which is more common the point is which fits the deal you are trying to do better. The concentration on strategies (or techniques) first is very misguided to me. Find a motivated seller. The structure of the transaction is built around getting him what he wants in a way you can afford.
An option and sub2 are two totally different techniques used is two totally different circumstances.
It is good to know these techniques but the key here is to find the modivated sellers. Every modivated seller is different and their needs and situations are different.
What you are trying to negotiate with a seller is how much they want in their pocket when they sell you the house. If they are willing to sell for what they owe, then that is a good place to start. Whatever the number is--the whole deal is structured around that.
Now that is all good advice. You try to give the Seller what he wants.
Example : Three days ago. Man buying five Container Houses for his very large extended family. He wants out of the house he has now. So we put him into escrow and agree to give him the amount due on the house plus $5,000. Now that is about $10,000 over the true value of the house. Remember this is LaLa land.
I call the holder of the lst mortgage who is a long ago prior owner who took it back on sale. I offered to pay him off and he gave me a 20% discount .
I then sold the property to a regular buyer at the slightly reduced price. I will get my $5,000 back that I gave the nice man and, even better because of the discount another $8,000.
Everybody is happy, the nice man has five new state of the art houses which will be clustered on a two acre lot in the hills of the North Valley. His extended family will there reside and he can play Pater Familias to the day he dies. I hope he likes noise.
All of this transaction was exposed to all parties at each stage. We put our necks out a bit but we felt the values were there.
I'm not sure I have any idea which is more common. The guru's talk about Sub 2 a lot more but that's because its a low-down strategy and ever since Robert Allen the guru business has been all about low downs.
The point is not which is more common the point is which fits the deal you are trying to do better. The concentration on strategies (or techniques) first is very misguided to me. Find a motivated seller. The structure of the transaction is built around getting him what he wants in a way you can afford.
An option and sub2 are two totally different techniques used is two totally different circumstances.
It is good to know these techniques but the key here is to find the modivated sellers. Every modivated seller is different and their needs and situations are different.
What you are trying to negotiate with a seller is how much they want in their pocket when they sell you the house. If they are willing to sell for what they owe, then that is a good place to start. Whatever the number is--the whole deal is structured around that.
Now that is all good advice. You try to give the Seller what he wants.
Example : Three days ago. Man buying five Container Houses for his very large extended family. He wants out of the house he has now. So we put him into escrow and agree to give him the amount due on the house plus $5,000. Now that is about $10,000 over the true value of the house. Remember this is LaLa land.
I call the holder of the lst mortgage who is a long ago prior owner who took it back on sale. I offered to pay him off and he gave me a 20% discount .
I then sold the property to a regular buyer at the slightly reduced price. I will get my $5,000 back that I gave the nice man and, even better because of the discount another $8,000.
Everybody is happy, the nice man has five new state of the art houses which will be clustered on a two acre lot in the hills of the North Valley. His extended family will there reside and he can play Pater Familias to the day he dies. I hope he likes noise.
All of this transaction was exposed to all parties at each stage. We put our necks out a bit but we felt the values were there.
Cheers Lucius