Subject To questions

[Amit G.]

I am a newbie doing my first BRRRR right now. But there is another property that I am looking at with following details -

Selling price: 119,000 (listed on MLS for over 30 days and no offers)

Mortgage: I believe around 105,000 (got this info from seller's agent)

I went the conventional route offering her the purchase price much less than asking based on my numbers (Thanks BP calculators), which obviously didn't get entertained for the reason that I later found out was that the seller's mortgage is much more than my offer price. And if seller were to sell at price less than the mortgage, they would have to go short sale route.

The other option that came to my mind is the Subject to option that I can discuss with seller. now my questions with this option, considering the selling price we agree on to is 110,000, are -

1. Do I pay the equity (5000) to the seller and ask her to transfer the deed in my name? or is there some other way this is done too?

2. If I get the rehab on that property (around 10,000) and compensate the realtor for connecting us (say around 2000), my total out of pocket cost would be 17,000. That is my money in the deal which is stuck forever, unless I am missing something here.

3. What would be my exit strategies in this case. I was hoping to rent it out for a long term and hold on to it. Is there any other creative way to go about it so I have minimum money of my own in this deal?

[Brian Gibbons]

I never go through an agent w sub2 or wrap purchase.

You need to work one on one with sellers, no agents.

If it is listed, cut a check to title co for agent's commission IF it closes.

NEVER trust agents for payoff of mortgage info, call the bank with the seller to get that info.

NEVER pay directly to seller, pay to title co and have the title co pay seller.

Deed goes to your name.

This deal is THIN. no real equity.  

You profit on the buy.

I would market for something else.

@Amit G.