The INFAMOUS SUB TO Discussion *Not for the Scared Investors*

[Tony Roberts]

Now that I have your attention DONT RUN NOW!  

So I heard about Sub To and I understood it. This makes so much sense!  It makes so much sense that....it isnt a popular topic on Bigger Pockets?  WTF?  Sure a few posts here and there but come on!

So here is the chance for the Sub To Gurus to regale (ITS A WORD I SWEAR) with their big brains.

So here is how I figure it goes.  Seller has a property worth $50K because this is Baltimore, ok?  Here is a creative option I came up with if I understand this whole thing correctly.

I can go in with an offer of $50k using owner financing.  Lets say he wants 10% Interest bringing the total to $55k and to offer another $5k up front to sweeten the deal.  (Am I doing this right?)  I finance the total amount of $55k for 10 years.  $55,000 / 120 months equals $458 monthly.  Great!  Now I just have to find a renter who can put down anything more than $5,000 to cover what I owe the seller in up front money.

Rent the property for $1000 monthly which is $542 cash flow.  After 120 months I've paid back the initial investment of $55,000 and also cleared $542 x 120 months = $65,040.  

Now I get there are concerns like vacancies, legal docs and the dreaded boogie man of the Mortgage being called due immediately.  BUT do I have the general structure right?  Please Sub To Gurus let me know if I am on the right path.  What am I missing?  Any other crucial things to consider?  

Is this thing on?