Selling & Buying "Subject to"

[Ruby Ruiz]

Lately I have gotten more and more familiar with purchasing properties "Subject to," and I like it. This strategy has been able to help homeowners get out of situations and mortgages they can no longer afford. The best part, the transaction is quick and 100% legitimate. I recently started working with a new broker, and come to find out he has closed over 150 Sub2's for himself to keep in the last few years. The more I learn, the more I understand why a person would want to sell and buy this way:

1.) Convenance outweighs equity from time to time. Especially when they are going into foreclosure and fear their credit being damaged. Ive met with sellers who cant go on market because they cannot afford the commissions or don't have enough equity to cover the cash offers flip investors submit. This form of selling becomes attractive to them.  

2.) Fast close. Unlike the traditional 30-45 days that it takes to qualify and close a home through a bank, closing Sub 2 does not involve any banks or title companies. We close with attorneys who draw up all documentation, trusts, and act as escrow. Typically this takes anywhere from 7-10 days dependent on the circumstances. 

3.) Win win scenario. The seller gets to remove the burned of the monthly note while the investor takes a whatever equity is on the home, turns around and can cashflow if numbers work. 

Sub 2 was not in my vocabulary 3 years ago when I started in Real Estate, now Sub 2 or buying subject to its existing financing is a common term I use daily! Gotta love Real Estate, you never stop learning! 

Have you done any Sub2 deals if so what is your experience?