Do you always need money to do subject to deals?

[Mike Schorah]

I’m spending $350/mo ($200 Mojo, $50 second cell phone, $100 PropStream) right now trying to wholesale. I hear that all the cash buyers ran away and subject to’s and/or creative financing is going to be big in the next couple of years with the interest rates skyrocketing.

Do I really need $5k to do a subject to or creative financing deal?

I’d hate to pull it out of my home equity as I know that these deals are risky. I hear it’s like a newbie flipping a house… the chances of success are like 50%. I’d hate to blow $5k and have to give the house back to the owner.

Is there a way that I’ll be able to take this $350/mo budget I’m spending on wholesaling and use it for subject to’s/creative financing without having to come up with a ton more money? Is there any way to do a subject to or creative financing for $2k?

[Doug Pretorius]

@Mike Schorah You need money for closing at the very least. In most cases you also need to pay the seller moving money. And you usually need money to do repairs. That's why sub2 is not recommended for new investors who don't have cash reserves.

As @John Williams mentioned you can wholesale sub2s. But I don't recommend it. If you want to do it please thoroughly vet your buyers to make sure they have the cash reserves and ability to get new financing if the bank calls the loan due. Otherwise you're just setting sellers up to get screwed.