Buying Subject-To deal

[Dan G.]

Hello fellow BP Members.  I went on a walk around my neighborhood and came across a pre-folosure lead. It is a over/under duplex that has a way door that allows to connect all 4 rooms in the house.  The owner is behind about 10k in payments, and is willing to do a subject to deal.  I have no experience with doing subject to deals.  My idea is to house hack the duplex and rent out each of the 4 rooms to college students.  The duplex is close to a nursing school and 2 medical schools. I live very close to the duplex so it would be easier to keep an eye on it and manage it.  I used rentometer and came up a very conservative estimate for the gross rents to be $2600 and expenses of $1885 (includes property managment).   That leaves $715 of cash flow.  This deal would require me to pay off the (owed amount a little under 10k+closing costs).  BP is telling me the Cash on Cash return would be 59%, pro forma cap rate 12.56%, and an income expense ratio of 2.18%.

Do any of you have advice on doing subject-to deals?  Have any of you done subject to deals? Would you mind sharing your deal and how it went down, and perhaps what you would do differently.  What should I watch out for? Is closing on these properties these properties same as any other?  What is the paperwork I need? And anything else you I might have left out.  Im a newer guy to investing doing wholesales, and am interested in building my portfolio.  

I appreciate your expertise and input.