Sub 2 Profit When Buyer Refis?
I'm new and still learning about Sub2, and I'm confused as to how we make a profit when the buyer refis. We the house is sold, don't we agree on a price at that point, and the money down is a down payment against that?
Most of the time "Subject to" is a better way to buy than it is to sell. At least in my opinion. When acquiring property Subject to existing financing, you give the current owner a small amount (most of the time) for their home, get the deed, then use that asset to make money. Either through resale, L/O etc. My goal is to re-sell the property either outright with new financing, Lease/Option the property until my new buyer has either accumulated enough for a good deposit, or repaired their credit to the point that they can qualify for their own financing, or both, and excercise their option, or use the property as a rental if it can deliver positive cash flow.
Nowhere did I mention anything about selling the property "Subject to". I suppoze that it is sometimes done that way, but that is not in my business plan. I'd be passing My Sellers credit on to Someone I really don't know (My Buyer). I'm just not comfortable with that.
"Sorry about the morality soap-box."
Anyway, you make your money on this property the same as you would any other piece of property. You try to sell it for more than you have into it, and you keep the difference.