Is a subject-to deal possible for a newbie?

[John Harvey]

Hi all, I’m a newbie and I really want to get started in real estate investing this year. I have put my investing plans on the back burner for several years and now I have the time to do it, I just don’t have the W-2 and a steady income that I had years ago. I have read dozens of investing books and studied multiple approaches to investing but I’m having a hard time settling on a strategy. I have some savings to dedicate to this but a conventional loan is pretty much out of the question – I’m self employed and just starting out with that.

My current business plan is to connect up with motivated sellers and buy property subject-to, (primarily because of my lending situation) and then I envision completing some minor repairs and then rent or lease the property out, for a positive cash flow. There are a whole bunch of small steps to this plan that I’ll need to figure out as I go but I’m wondering what other experienced investors’ think of this approach for newbie. Am I realistic to think that I can figure out the steps involved? Is a Subject –to loan assumption really possible?

Thanks for your thoughts….
John

[Sharad M.]

Hi John-

I am not a newbie investor, so take what I say with a grain of salt.

I think the first and foremost thing would be spend some time reading on this forum and talking to other investors and learning more about different strategies. As you learn more about each strategy, you will start feeling more comfortable with one than the other. Not that any one is particularly better than the other, it's what YOU feel most comfortable with.

Always keep a portion of your savings for rainy days, because when it rains, it pours.

Read more on this forum about the 2% and the 50% rule to see if the property you are getting yourself into is really a cash flowing property. I would say that just because you can have a property with little or no money down doesn't mean it a great investing opportunity. The numbers don't lie.

Absolutely. I was clueless about few months ago, I read a lot of books. I speak with as many people as I can, learn from their experiences, good or bad. Don't rush into an investment opportunity because someone tells you this is THE opportunity. There will always be opportunities out there for you when you are ready. I would spend some time figuring out a strategy that fits my long term goal, and then make a plan of action.

Good luck with your investing career.