All Forum Posts by: Stacey Paulin

I think it makes sense to do direct marketing with laser focus.  My first go at it was a success in that it got the phone ringing, but my response rate the second time around has been much higher since I've focused my reach to a very specific group of people.  It's nice to have thousands of leads, but you really don't  need many to find great deals.  The hardest part is sorting through them.

Try Pete's Friendly Home Inspection.  We use them and have nothing but good things to say about them.  They service the entire metro area.

Welcome, Omar!

I'm a new investor working hard to get my first few deals under my belt.  Seller financing is a big topic, and there is lots to learn.  

There are many snakes in the grass.  It sounds like you've already run into some.  I think your biggest defense against them is knowing precisely what you want.  Have you outlined your goals?  Do you know what type of properties you're wanting to invest in?  If you have your goals outlined there is nothing anyone can do to throw you off track.  It's easy to be enticed by the many strategies that promise to make you the most money.  Pick one or two that you feel will deliver the results you want and focus all your energy there.

IMO, Bigger Pockets is the only real estate "course" you need.  Bury yourself in the posts here and do searches on the topics you're interested in.  You'll find a wealth of knowledge.  If you have questions that you can't find the answers to, just ask.  There are lots of people here willing to help you.

Good luck and don't get discouraged!

Thanks everyone!

Robert, you've been so helpful.  I feel like I have a better grasp of sub 2 and other seller financing options.  What I worry about is all the details that I DON'T know.  I will PM you.  You've been so very helpful. 

So we met with our agent today to look at some other homes. As expected she knows nothing about owner financing. That's ok...we will teach her, LOL. She's a great agent otherwise. We pitched the idea to her after we saw the last house on our list for today, and she said she would reach out to the seller's agent ASAP. 30 minutes later she called and told me the seller sold the home just two weeks ago. Someone was able to get an FHA 203 loan. Ouch!

Talk about being crushed!!  I know there will be other deals, and now that I'm more familiar with seller financing I won't let an opportunity like that slip through my fingers again.

Brian Gibbons, I know you are one of the resident experts in seller financing.  Thanks for the blog post link, and I'll go watch those videos right now.  

First, pardon me for not responding sooner.  I'm on BP daily and I had no clue that I had responses to this, so thank you guys so much for responding!

I'm not sure if my agent is familiar with sub 2 deals.  We meet with her tomorrow so I will ask her.  She worked so hard for us for four months to get that deal.  I know she wouldn't have a problem getting in contact with the seller, but I don't know what else she could offer us on a deal like this.  I will ask her!

We would likely plan on refinancing the property, and since there is so much deferred maintenance and repairs to be done I'm sure we could gain a lot of equity.

I'm comfortable with the idea of sub 2 but not so much with lease option.  Since this will be a rental I don't know how that would work, but I will research that.

I love your advice about explaining to the seller what the potential benefits are to him with this deal.  I'll have to give my delivery some thought, especially because I know he is motivated.

I think we will give it a try and see the seller bites.  I do have some follow up questions:

What happens to tax and insurance payments?  The insurance will still be in the sellers name.  I can't wrap my head around this.

I've read that when doing a deal like this the seller is asked to sign an authorization form to release mortgage information.  I could use this to find out how much equity he has in the home.  Is this the amount I should offer him up front so that he is made whole at least?  I think this could be a selling point for him.

Thanks again!

Hello BP,

I have a question about a property that I think could make a good subject to deal, but because I'm new to all this I'm not sure so I'm seeking some guidance here from the more experienced investors.

History: We initially found this duplex earlier in the year. We got our financing in order and had our realtor contact the seller's agent. We scheduled a showing and quickly got the home under contract after some negotiating. During inspection we found out the home needed some big ticket items replaced: both AC units, both furnaces, some electrical work, and mold was present in the bathrooms. Cosmetic work also needed to be done to both units. Seller is unable to repair/replace anything. We got bids for all the major system updates and for paint, carpet, etc, and we estimated 15K to get the home in good condition, which we were ready to do. Unfortunately, our lender would not extend us financing on this home due to its condition. We scrambled trying to find financing, and ultimately had to let the property go.

The property has since been taken off the market. We know the seller is motivated and needs to get rid of this property. It has been vacant for some time now. Our plan was to purchase, rehab, and rent out. I don't know what the terms of his loan are, but I do know the asking price we agreed on was 77K. I don't think there is much equity here. We could rent both sides for at least 700/ month. I'm thinking about having our agent approach the seller again to see if he would be interested in selling the property subject to. I've been reading a lot about this strategy. It seems that most people hold onto the property for a very short time because of the due on sale clause.

How can a subject to work if we wanted to keep it and rent it out?

How would a cash out refinance work under these circumstances, if at all?

Would I need to hire a third party servicing company to make monthly payments on the existing loan or would I pay directly to the lender? How would I do that?

Thanks for reading, and thanks in advance for your help.

Yep.  It especially helps me to focus on a target area so that I'm becoming an expert on a particular market.

Hello BP,

I have a question about a property that I think could make a good subject to deal, but because I'm new to all this I'm not sure so I'm seeking some guidance here from the more experienced investors.

History: We initially found this duplex earlier in the year.  We got our financing in order and had our realtor contact the seller's agent.  We scheduled a showing and quickly got the home under contract after some negotiating. During inspection we found out the home needed some big ticket items replaced: both AC units, both furnaces, some electrical work, and mold was present in the bathrooms. Cosmetic work also needed to be done to both units.  Seller is unable to repair/replace anything.  We got bids for all the major system updates and for paint, carpet, etc, and we estimated 15K to get the home in good condition, which we were ready to do. Unfortunately, our lender would not extend us financing on this home due to its condition.  We scrambled trying to find financing, and ultimately had to let the property go.

The property has since been taken off the market.  We know the seller is motivated and needs to get rid of this property.  It has been vacant for some time now.  Our plan was to purchase, rehab, and rent out. I don't know what the terms of his loan are, but I do know the asking price we agreed on was 77K. I don't think there is much equity here. We could rent both sides for at least 700/ month. I'm thinking about having our agent approach the seller again to see if he would be interested in selling the property subject to.  I've been reading a lot about this strategy.  It seems that most people hold onto the property for a very short time because of the due on sale clause.  

How can a subject to work if we wanted to keep it and rent it out? 

How would a cash out refinance work under these circumstances, if at all?

Would I need to hire a third party servicing company to make monthly payments on the existing loan or would I pay directly to the lender? How would I do that?

Thanks for reading, and thanks in advance for your help.

This would be a red flag for me.  Sounds like the realtor has other motives.