Winston-Salem, NC Sub2 Success

[Matt Moger]

I wanted to share my first solo subject to property success. This is the third property that I have purchased using subject to, but the two deals prior I had to bring in some private $ partners.

The lead came from a gentleman I met at church over a year ago. We go to a large church with about 6,000 members, so you may not see the same people every week. Back then he told me about his former residence that he was renting out & I just let him know a little bit about what we do.

Fastforward to March of this year, he sends me a Facebook message & says that he is highly motivated & he just doesn't want the burden of the home when it goes vacant at the end of spring. He knew he wasn't going to make money on it & had some financial things on the horizon & did not want to mess with it. 

This house was built in '94, 2300 sq ft, with a two car garage on half of an acre. It's in a very desirable school district & just inside a county with lower taxes. Conservatively worth $140,000 based on comps & my knowledge of the area. 

He agreed to $115,000 & would accept $5000 on the back end when we are able to sell the property. He knows that could be tomorrow or it could be 10 years, but he is ok with that. He had recently refinanced & his payment including PITI was $745. I gave him $100 earnest $ & we signed a contract in April with my first payment due July 1st.

This place is slightly dated but I planned on selling it as is to a tenant buyer on a rent to own, because that is one of main exit strategies & we've had good success with it.

Through a conversation with my electrician, he decided that he & his wife wanted the house. Their closing on Halloween for a rent to own sales price of $133,000 with $5000 option fee & $1000 per month. 

I took a little less than we were asking because I know they pay on time, they have already made plans for improvements to the property & we are moving closer to those potentially dreadful winter months where things potentially get a little slower. 

The moral of my safe but solid deal is . . . Let people know what you do. We have 6 houses & 2 have come from telling people what I do.