"Subject-to" question
Ive been reading over the subject-to articles. If I live in an area that has seen a very large growth in RE values. Am I less likely to find people to go with the whole subject-to idea?
I figure if people can sell there house for 30-50% more then they bought it for they will be less likely to just pass off the mortgage.
Bryan
BryanInMD,
Glad to meet you.
Everywhere in the United States there are a percentage of people willing to sell their house Subject To. These are sellers that need out immediately, because of a variety of reasons.
In my area the houses are appreciating 20%-30% per year, you would think no Subject To deals, wrong they are done every day.
It takes the proper marketing and advertising along with the knowledge to know what to say to the seller to get the deal.
I have worked 'up markets', 'down markets' and 'in between markets', there are always real estate investing deals to be found.
Welcome on board this board, keep asking questinons, this is the way we all learn.
John $Cash$ Locke
Bryan,
I agree with John. The reasons folks want a no-hassle, quick solution to their problems occur in every market. Whether that be relo, divorce, death, job loss, no equity, etc., the type of market has no effect on the motivational factors.
Yes, you would think that kind of appreciation would limit the opportunities. I went through the hottest market the Austin, Texas area has ever seen and was still able to buy Sub2 without any difficulties.
One thing I would strongly suggest is to NOT buy no equity or low equity deals right now; actually ever. I think John may disagree with me on this one, but when buying into a strong seller's market, do realize there will be a pullback at some point.
If you purchase at 90% or 100% and the market drops only 10%, where will you be? 100% leveraged? 110% leveraged?
Don't believe the hype that you'll never have vacancy issues because you can offer terms. What do you think happens when the market drops? You got it, everyone and their mother offers terms. How will you offer value or perceived value above and beyond everyone else if you're highly leveraged? The answer is it will be very difficult.
Just something to consider...
Sincerely,
Tim Randle
http://AustinRealEstateClub.com[ Edited by trandle on Date 11/10/2002 ]
Tim Randle,
Tim, is one of the more successul real estate investors in our great industry. He has a web site devoted to the Austin, Texas area for real estate investors. Take a look at his site if you get the chance. I am personally glad to see Tim offering his talents to the community of investors here at TCI.
I should do an article on exit stratagies for Subject To investors when and if your market takes a dip and you have some low equity deals you feel you should get rid of. There is a way. As in 'any' method of investing you should always 'be prepared' (scouts honor) to exit gracefully and successfully.
Welcome on board this board Tim, looking forward to your posts.
John $Cash$ Locke
John,
Thanks for the kind words, overstated perhaps, but kind.
Yes, I'd welcome an Exit Strategy article as I think that topic is much ignored. Occasionally, one may see reference to an exit strategy, but certainly never to multiple exits on the same deal. Contingencies are essential and not discussed typically.
[addsig]