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Updated about 2 years ago on . Most recent reply
![Wesley Thompson's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/2247602/1631213250-avatar-wesleyt40.jpg?twic=v1/output=image/crop=889x889@0x0/cover=128x128&v=2)
First Subject - To and Wholesale Deal
I recently locked up my first subject - to deal which I wholesaled to another buyer. Really excited as creative situations is where I'm looking to build my credentials and skills.
Property Value: $220,000 - $230,000
Loan takeover amount: $168,720 (PITI - $1178), VA loan @ 3.25%
Solar Loan - $48,500 (monthly payment $158), 20-year ammortization @ 1.9%
Cash to seller - $12,500
Assignment fee - $5000
10-year balloon
Located near Augusta, Ga just a few miles from a military base. Found the opportunity in a FB group for RE in the area.
Most Popular Reply
![Wesley Thompson's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/2247602/1631213250-avatar-wesleyt40.jpg?twic=v1/output=image/crop=889x889@0x0/cover=128x128&v=2)
With Subject-to financing, the loan(s) stay in place. The 'buyer' takes over the responsibility of paying the loan(s), which are in the seller's name. So for this deal, the VA loan and the solar loan stay in the seller's name. The buyers make the payments to those loans. The note drafted for the agreement and parties is serviced by a note servicing company. The buyer sends payments to the company, and the company makes the payments. There are several ways it's structured to mitigate risk for the buyer and seller but I'm not going down all those rabbit holes right now. Since this is my first sub-to and wholesale, I was only interested in assigning the contract to a) someone I know & b) has experience with sub-to deals. It's my responsibility to protect myself and the seller. Seeing as how they are military and I am too, I'm not going to allow them to be taken advantage of, and want them to be happy with the deal and the buyer. The buyer plans to use it as an STR and there is enough room for profit for them to make the deal palatable. They're into it for about 10% of the purchase price (sum of both loans) with a very low-interest rate locked in on a 10-year balloon. They'll make back the initial investment within the first year... enjoy an infinite return for the next 9 years while they gain equity and loan paydown. Then they can refi or sell in a decade into a loan in their name.