Subject to deal

[Adam DeShone]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $160,000
Cash invested: $15,000

Acquired off-market from a mailer in 2023, this single-family home underwent a full flip in 2021 before becoming our property. The previous owner, who used it as his primary residence, no longer wanted to be a homeowner. We negotiated a sub-to deal giving us a 2.8% interest rate. Currently, the property generates $1,900 in monthly rent, while the monthly PITI stands at $800. The market value is $220,000.

What made you interested in investing in this type of deal?

Pace Morby has done a great job teaching about the ability to sub-to deals. Following his content opened up a whole new realm of opportunity when buying properties.

How did you find this deal and how did you negotiate it?

This property was found with a mailer sent in 2022. The owner reached out intrigued, but did not want to sell. I followed back up with him 8 months later, and he decided he then wanted to. We were able to negotiate sub-to by explaining, if you want your price, we need these terms.

How did you finance this deal?

This was a subject to deal. The $15,000 to pay the difference of mortgage and purchase price was out of my business partner's and my own pockets.

What was the outcome?

We now own a highly desirable home with roughly $80,000 of equity, a low fixed interest rate, and huge cash flow.