All Forum Posts by: Zane McLaughlin

Ok I assume you are a wholesaler.

And yes, I would definitely make sure that your cash buyer either knows that the deal is a subject to, or find out if he takes these deals. If you have a good cash buyer that you can send deals to on a regular basis, the last thing you want to do is waste his/her time with looking into a deal to only find out that he couldn't have taken the deal to start with.

In any case, you should broaden your buyers list and find investors that take these deals. I absolutely love deals like these--they're my bread and butter. I'm sure that you could find other investors like me in your area that would love to have these types of deals sent to them. \

And @Jay Hinrichs, I disagree with needing a large amount of money to make these deals work. I have done 3 deals this way this year, with less than $1,000 out of pocket expenses. Having more money at your disposal for a safety net is a great thing to have, but if you can be creative, and think outside the box, you can do a lot with a little. I use these for long term cash flow-making sure to pay the mortgages, while making a little off the top in rent. These aren't only good for quick flips.

I don't have any advice here, but I would like the follow this discussion lol

Hi @Jose Castillo,

Subject-to means subject to the existing loan. This means having the home owner sign the deed of the house over to you, with the promise that you will make their mortgage payment. These deals are usually used for owners that need to get rid of the house because they are facing foreclosure, do not want the mortgage payments any more, or cannot sell the house because they owe to much on the property to be able to sell it traditionally.

You can use this deal as a new investor, but I would highly recommend that you consult an experienced REI that has done many of these in the past to make sure that you aren't getting yourself into hot water without knowing about it.

These types of deals are great for using the no/low money down approach to investing, which is great for investors first starting out, but can get very tricky, very quickly.

You can google more about Subject-to, or watch a few youtube videos to get a better understanding.

Hi @Rodrigo Aguilar

You've come to the right place!

The Biggerpockets community is great, and there is a wealth of knowledge here that can answer just about any question you can think of when it comes to real estate.

A good plan to have when first starting out is to learn, learn, learn. There are people here that have been investing for years, and they are still learning about the Real Estate Market. You should read, forums, books, watch youtube videos, and just spend time looking at houses for sale/rent.

Hi @Damian Gawle,

Good question.

I would use the "grand-fathered-in" rule with this one. I am in the military, and this term gets used a lot, so I'm not sure if everyone else knows the term so I will explain. When a certain way of doing things is changed, chances are there are a few that still have the old way, and this is called "grand-fathered-in". For instance, the Army made a rule that soldiers cannot have tattoos on their forearms, but soldiers that already had forearm tattoos would be grand-fathered-in, and counted as an exception to the rule (meaning they could keep their tattoos), but the rule would apply to others  that didn't already have sleeve tattoos AFTER the rule went into effect. The rule was later changed, and soldiers are again allowed to have sleeve tattoos, but you get my point.

When you advertise the house, and fill the other apartments with tenants, they will know that they got the place since they didn't have pets to begin with since all other pet owners would be detoured by the "no pet" rule.

If the question comes as to why one other tenant has a pet, and they can't, then you can simply tell them "they were grand-fathered-in" ;-)

Hi @Kevin Coleman

If you are house hacking, than you are buying the house, and plan to live in it for a year or more. You can live in one of the flats, and rent the others out.

I am not a lawyer, and am not giving legal advice, but I would say you just need regular home owners insurance. You can upgrade the insurance to commercial later on.

The formula that you want to go with is going to be based on what you are wanting to collect on profits, and what is a good deal for you. You want to establish your bottom dollar, and what you will walk away from a deal if it dips below that.

Lets say you find a house for $60k that needs $10k in repairs, but the house will sell for $75k after repairs 6 months later. This could leave you $5k on the back end, but what will your costs be in the mean time to market the house, and how much will you be spending on the interest (if you have a hard money lender)? But lets say you have the money yourself to buy the house, fix it up, and market it yourself. Is $5k worth it to you for 6months worth of work? I know it wouldn't be for me, but I'm not you.

Do your research, and look at how low you can get the house for, what the appraised value is, what the market value is (check other houses comparable to yours), and then look at how long other houses have sat on the market to get an idea as to how long it will take to sell (include the fix up time as well).

I hope this helps

subject-to's are a good place to start. Also look into "sandwhich lease option" and Owner Financing. This deals will help you get your foot in the door without spending a dime of your own money.

If you would like some more information, you can add me as a colleague and I can answer more of your questions. 

no way! These are people that have inherited, or taken over the property, and are more than likely, very eager to get rid of them. These are probably the best ones to keep on your lists

The strategy that you use will be based on the situation that best suites the situation. Knowing each strategy will be crucial in knowing which one will work for the situation that you are in. For instance, if you have a seller that comes to you and is "open to creative financing," it is your job to gather as many details as possible. Now lets say that seller out right owns the house, lives out of state, and is looking to "make the place an investment." This deal is leaning a lot more towards a "seller financing" deal, since you can negotiate a purchase price and interest rate. Now lets say that the owner is behind on payments, and the house needs some fixing up and they. "Just want this head ache to go away." This kind of deal may lean more towards a subject to deal since there is going to need to be some working with the bank to get them caught back up so that the house doesn't go to foreclosure. These deals have a lot riding on them and to make this good for you, there has to be a large amount of control over the property. Now lets say that the owner has a house with a mortgae but is not behind, but wants to sell, but cant afford a realtor. This kind of deal may be good for a "sandwich-lease-option". You can close this deal by offering a different solution of selling their house. 

Take time and listen to your client, and think about the best solution that not only helps you, but also them as well.