Subject To Deals in NJ

[Mike Bitette]

I was wondering are there any Subject To investors here that work in New Jersey? If so would you be interested in giving me some more insight on this process and how it works here in NJ?

[Curt Smith]

Hi Mike, I like helping folks close sub-to.  Its the most complicated closing scenario of all the real estate scenarios, with wholesaling a lease option in 2nd place.

There are no state regs in play, sub-to closes the same everywhere.  Some Attorneys, and investors don't move the deed into a trust as the first step (of 10 separate docs the way I do it) in a closing.   I like the trust rought even today with low risk of due-on-sale which I've never heard of today.

Find prospect sellers who are:

- >60 days on market listed for sale.  Something is wrong with >>60 days on market.  Often its no equity and they can't price drop.

- FSBO in craigslist or the many for sale by owner websites: fsbo.com, foresalebyowner.com etc.

- folks with a mortgage originated at the peak, they may still have little equity.

- And folks heading into foreclosure, Notice Of Default, but this seller is the hardest to convert to a sale.  99% go down with the ship!!!   I recomend you don't start here!!!  4 week race, 99% refuse to sell AND move out BEFORE the auction date.  Nearly impossible certainly for a new person.

Your job, as it is for low cash folks, is to skip trace all the LIST / MLS / FSBO folks, unless they have their phone numbers in the ad on craigslist etc. Start a relationship. Some percent maybe 5% will be motivated and need to get rid of their houses.

You must find out the balance on the mortgage (and all other debt or liens on the house), the monthly mortgage payment.  What it would rent for, and how much rehab is needed to move a renter in??  Figure this all out and ask.

Offer;  Hey would it be solution to you if you could move on with your life and not worry about paying this mortgage?

If they say yes, you have a sub-to prospect..

Then say:  Well my boss rarely will do this,,, and this may not be ok with you,  but in some cases like yours we are willing to take over paying on your mortgage, so you can move on.  What we do, is we might fix it up a little bit with our own cash and then rent it to a buyer who needs a little bit of time to fix their credit up and then they will get a new mortgage and buy this place, taking out your mortgage.   We can't commmit on how fast this would happen, but its in our best interests to keep paying on this mortgage.  We make our profit at the end when the tenant buyer gets a new mortgage...   I know this sounds like a lot, and maybe you aren't open to this solution?

(word questions in the negative, its lest stressful for the seller)

PM me if you get a seller to say yes to all of the above, the mortgage balance is at or below As--is value (break even or slight equity, be leary of negative equity deals), and mortgage payment is $300 or more less then rent.  Its a nice house in a nice neighborhood.

Best of luck.