Seeking input from the SubTo community on a potential deal

[Shannon Strickland]

Seeking input from the SubTo community. My friend is selling her house with an agent and moving because she wants to live in a free-and-clear house she inherited out of state. I would like to buy/control that asset, but I’m struggling to come up with a deal structure. The house is worth 600K and she owes 300K on a mortgage. Wanting to approach this creatively, I wonder if it could be 300K seller financed and 300K SubTo.

[Jack Lander]

Hey Shannon! I am happy to help you structure this, send me a message if you would like. 

I do a lot of subject to deals and actually have a hybrid deal in Tampa FL in escrow right now where the seller had decent equity. 

Took over the 300k subject to, gave the seller 28k at COE, and seller carried 80k of equity with a balloon in 10yrs on the equity. 

You can structure something like this where it could be a win win. 

Questions to ask would be:

How much can you afford as a monthly payment? 

So you will have the mortgage payment (PITI) + whatever monthly payment you agree upon for the equity she will carry

How much money does your friend need to move on and would this work? 

How much of a down payment does she want? 

What happens if you decide to move/ no longer want the house and the market has declined over the next few years so you have no exit? Will it also cashflow as a rental?