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Sub 2 Pre-qualification

srb profile photo
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  • srb
  • Thursday, August 07, 2003 @ 03:24 PM EDT
  • 4 Comments

Hi all,

I have ordered the sub-2 book by $Cash$ but could not resist jumping the gun !! I was trying to get a list compiled (questions & pertinent numbers) that would pre-qualify a sub-2 from the leads that one may get:

(1) Little, no or better yet, negative equity.
(2) Payments current, or at the most, 2 months behind
(3) Affordable monthly payments - affordable meaning a T/B must be able to pay it and put $150+ in your pocket every month
(4) Decent enough credit of T/B so that they can refinance in 12,18 or 24 months based on their promptness of payments.
(5) Not too many repairs needed
(6) An area that may appreciate decently in value in 12,18 or 24 months
(7) Low enough interest rate on the original mortgage
(8) Clear title (due diligence) - the best being just one mortgage secured by the property

Let me know if I have made some errors and/or omissions.

Thanks,

"B".

Comments(4)

  • JohnLocke
    JohnLocke7th August, 2003

    B

    Let me give you a heads up everyone of your questions is answered in the manual.

    So here is what you need to be doing first, since I ship USPS Priority Mail you should be watching for the postman.

    Once you have the manual it will all start coming together, it cleanseth the "Information Overload" from your mind an gives you a focused approach to creative real estate investing.

    Are you looking out the window yet, please Mr. Postman hurry.

    John $Cash$ Locke[ Edited by JohnLocke on Date 08/07/2003 ]

  • no photo
    pbodys7th August, 2003

    Hey B,

    I don't necessarily agree with numbers 5 and part of 8.
    You would prefer the house to be in (good) shape, only needing a cleaning.

    and as for # 8: say for example
    They have 1 mortgage, if there's a 2nd and the prop. is only say...2 years old (i,e. new construction), the 2nd has eaten up much of the equity that the prop. would have gained.

    Now they want to sell and don't have enough equity for a Realtors commission, (although the Realtors will list it anyways,,waaaay too high, pratically eliminating any chances for a sell), getting more listing points with their agency and tying up the prop. 3 months from someone like us who wants to take over the payments.

    These are the houses that are prime targets for the Sub To deals. Beautiful houses in beautiful neighborhoods with little equity that just needs to be cleaned.

    Hope this helps,
    Clif [ Edited by pbodys on Date 08/07/2003 ]

  • no photo
    srb7th August, 2003

    $Cash$ and pbodys,

    Thanks for your replies. After looking at pbodys' post, something struck me - good, clean houses in good neighbourhoods with mortgage problems are sub-2 candidates.

    Similarly, houses needing repairs that meet the other criteria along with seller financial difficulty and depending on the bank would be good short sale candidates, no?

    In other words, mortgage problems is common to both methods of investing but the condition of the house would determine the actual technique.

    BTW, I realize that a short sale would need cash whereas sub-2 would need atleast 3 months' payments (along with the ability to get a quick loan if DOS is invoked)

    Thanks again,

    "B".

  • no photo
    zarathros7th August, 2003

    There doesn't HAVE to be a problem with the mortgage per say.

    There could be other reasons...

    Job transfer, family member who owns the house died, they need a bigger house because the family is getting bigger (newborn) plus any number of other reasons.


    The point is there is a problem, no matter what it might be, and you have the answer to help them fix that problem.

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