All Forum Posts by: Nic A.

A "subject to" sale does not require no equity. The Seller could have 10% or 99% equity. The only requirement is that they have an existing mortgage. The buyer offers to take over the mortgage payments and the seller transfers ownership to the Buyer. For example:

Dave owns a house worth $200,000 but owes $150,000. Due to failing health, he can no longer afford the payments. Bob offers to purchase the home as a "subject to". Dave transfers the deed to Bob and Bob takes over the existing mortgage. Dave gets to walk away and Bob gets a house with no down-payment, no REALTOR, no bank, etc.

The downsides? Dave is transferring the deed so that Bob legally owns the property but the mortgage is still in Dave's name. If Bob misses a payment, it can impact Dave's credit rating. If Bob defaults and the property is foreclosed, that foreclosure goes on Dave's record. The downside for Bob is that the bank may learn of the transfer and decide to enforce their "due on sale" clause. This would force Bob to seek traditional financing and pay the original mortgage off. The hope is that he would buy it at a low enough price that this wouldn't be a problem in an emergency.

Again, I hope that helps.

I have a property in San Antonio that I have been wanting to sell for awhile. The tenant is on a one-year lease that expires in a couple of months. 

They have not kept up with the rent and are behind by more than a month, but they have been making payments recently. My property manager doesn't want to evict, even though at one point they were so far behind it seemed obvious to me that we would never collect the past due rent. He suggests waiting until the lease expires before taking any action. 

I've considered just selling to another investor rather rather than dealing with an eviction, fixing up the property and listing it on the MLS. How would I find an investor to sell to? I get these postcards from "cash for houses" buyers, but I assume they'd be looking for very deep discounts. I'm not sure if I can believe the Zillow estimates, but with the current value listed there, I would be sitting on over $100k in equity with about 50% LTV.

@Sachin Relia I invest there but don't work in the 2-4 unit space in San Antonio. I do like the market but my biggest issue has been property taxes. Make sure if you get it below the assessed value that you protest taxes and send them the HUD!