Sub2 or Finance an investment?

[Rebecca Graziano]

Hello folks!

I got a lead on potential sub2 situation that is an older couple with a house worth about $325k ARV. They have $100k HELOC and have shared with me they are concerned about retirement, just want to move to middle of nowhere, worry about house payments, etc. The house is in original condition from mid 70s.

We are thinking about how to structure potential deal? Sub2 stuck out but they might get spooked since they are traditional, private people - "don't tread on me" navy veteran.

My husband, being a veteran, thinks sub2 is wrong approach and would prefer using financing. We've considered using our additional VA entitlement to acquire the property at their payoff amount. We've also considered private money(from family) to pay off the loan and transfer title and then refi later.

We want to offer them something in return to make it worth their while, since they aren’t in distress yet, but aren’t in good position either. Their only option to retire is to sell the house but they haven’t repaired anything, so they won’t get much money to live on for another 20+ years.

Strategically, there’s a lot of options here. We could move into the house and do a live in flip while keeping our housing cost very low, and rent our current property. We could acquire the house and wholesale it, or we could flip it, or buy and hold.

Any suggestions appreciated:)