Subject To / Sub2 - Is it really just this?

[Chris Seveney]

I frequently see sub2 deals on FB and other sites and out of curiosity I look at what they are offering.  When I look at the property and the information what I am noticing is the "game plan" is as follows:

1. Find a property that is listed on the MLS.

2. Have that property be in default

3. Get it under agreement for less than asking price and offer to bring the loan current and have them carry that loan.

The way I see it is they are just getting MLS properties under agreement - the last five I looked at had been sitting on the market for more than 150 days (overpriced) because the payoff of the loan would not be satisfied at lower price point.

If this is what sub2 is, then why are people paying tens of thousands of dollars to learn this process? To me it seems like it could be taught in under a day? Its just a version of wholesaling with keeping financing in place? What am I missing (besides in some instances you have a lower interest rate but do not get clean title to a property)?

[Tracy Z. Rewey]

Great post topic...I'm going to pop some popcorn and will be back for the show.

Just to get things rolling. Because it takes "an expert" to explain novation, avoidance of due on sale clauses, ignorance of state foreclosure rescue statues trusts, why you don't need title reports, attorneys or reserves, and don't forget to throw in the Garn–St. Germain Act as the interlude?

For clarity, the above is a bit of sarcasm.

I love a good creative financing transaction when done safely and ethically. There is a video (free on YouTube) by Attorney Jeff Watson titled "How To Do a Subject To And Do It Right" that I highly recommend.