What's the typical deal analysis for Subject To deals

[Sophia Wang]

When doing a subject to deal, what does investor look for in terms of equity spread, or as long as the rental income to monthly payment spread is big enough? 

I have a subject to deal in the making, but the wholesaler is trying to sell it at close market price, at best 6k equity on a 150k home. Good thing is the home has a very low fixed rate 30 year mortgage, and about $400 spread between rent income and monthly payment. Decent neighborhood. 

[Jay Hinrichs]

@Sophia Wang  does 400 cash flow account for all costs including maintenance vacancy PM lease fee's  and are tax's and insurance impounded and accounted for in the mortgage?

I have bought a substantial amount of sub too's and I never played the cash flow game they needed to have at least 25 to 30% equity I could care less if they cash flowed.. I have seen to many go down with thinking they were going to make cash flow only to have those blow up in their face and the cost to sell is greater than the equity... and then default and the original seller is very upset. etc etc.

Now if its 400 a month after accounting for everything and you have a good 6 month to a year of payments in reserve plus another 10k in cash.. then its a pretty safe bet..  Always have to think about the what if.... tenant goes nuts and our stuck paying the payments while you try to evict... this is where many go south.. Bad deal for the seller generally or Risky might be a better term.