My First Subto Deal

[Jonathan Jones]

Investment Info:

Mobile home buy & hold investment.

Purchase price: $138,000
Cash invested: $16,500

We purchased this property subject to (Subto) the existing mortgage. We just closed on it. Now we will have to put in some rehab during to severe water damage and general updates. Then we will use for long term rental. It has extra land where we plan add another 1-3 rental units.

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

We are currently trying to acquire properties with consistent cashflow to give more flexibility for other investments that fluctuate more like STR.

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

It was posted in my Subto community and in an area I have some interest in so I contacted the wholesaler there.

How did you finance this deal?

Cash reserves

How did you add value to the deal?

We are about to begin rehab.

What was the outcome?

TBD as of 4/3/24

Lessons learned? Challenges?

1. Confirm everything - the initial rental estimate provided by the wholesaler seems to be an aggressive estimate. I like to use conservative estimations.

2. Even when the buyer, wholesaler, and transaction coordinator are all pulling the same direction, it does not mean the seller or seller's bank will cooperate in a timely manner even when it is in their best interest.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, I used Heather Kiddoo for my transaction coordinator. I recommend her. She worked with my schedule for discussing the deal, and as the process got drug out longer, she continued pushing the parties to make sure everything made it to completion.