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Updated almost 5 years ago on . Most recent reply

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Jason Jaros
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First Time - Should I do a 'subject to' sale?

Jason Jaros
Posted

I'm having some difficulty finding traditional financing for a single-family property. My mother-in-law is selling it to me for what she owes, which is only 32K (ARV is about $130K). Unfortunately, I've been told by 3 lenders now that it's simply not a large enough loan. And all the business loans/credit seem to be stopped currently from those same institutions.

Should I do a subject to sale? The numbers work for cash flow, but the property needs renovation, which I would have to figure out how to pay for myself--pretty certain I can't get a HELOC until after I pay off the subject to loan. I have some money saved up, but I'm a bit short of just buying it cash.

So subject to, or keep shopping around until I find someone who wants to finance it?

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  • OverTheRainbow
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  • OverTheRainbow
Replied
Originally posted by @Jason Jaros:

I'm having some difficulty finding traditional financing for a single-family property. My mother-in-law is selling it to me for what she owes, which is only 32K (ARV is about $130K). Unfortunately, I've been told by 3 lenders now that it's simply not a large enough loan. And all the business loans/credit seem to be stopped currently from those same institutions.

Should I do a subject to sale? The numbers work for cash flow, but the property needs renovation, which I would have to figure out how to pay for myself--pretty certain I can't get a HELOC until after I pay off the subject to loan. I have some money saved up, but I'm a bit short of just buying it cash.

So subject to, or keep shopping around until I find someone who wants to finance it?

So, lots of questions - why is she selling it so far under value? Does she need money from the sale or is she fine taking payments? Lots of banks have stopped doing HELOCs, do you think you can still get one?  Does your mother-in-law understand the risk she is taking doing a Subject To? Do you? Why not do Seller Financing or a Wrap? Do you have Thanksgiving dinner with her every year and want to keep Thanksgiving fun and comfortable?

What is her goal?

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