What are the benefits with investment agreements subject to (SUB-2)?

Investing in residential houses, condos, apartment buildings or whatever you would like to do within real estate, there are several creative payment methods. My favorite turns out to be SUBJECT A as it doesn’t get better. Where else can you buy your dream home and five others, without having to draw on your own credit, assuming you have good credit, and closing all five in a matter of days? So the pros and cons of my favorite method below.

Advantage

1. Speed ​​and time: The number one advantage of being bound by agreements is that they are SO QUICK TO CLOSE. With a traditional home buying process, you should wait 15 to 60 days before you qualify for a mortgage or hard money loan, let alone find the contract that meets your needs and purchasing power. With a theme a, you are simply limited in the time it takes to find a motivated seller with a good investment.

2. No Down Payment – In some cases of finding the best deals, sellers may often pay you to buy your home. That’s right, it’s true when you hear people talking about no-down payment settlements. The way this happens is when the market value and the loan value (LTV) are relatively equal. When that happens, sellers’ homes are “upside down” with little or no equity to cover closing costs. In a typical buyer’s market, sellers HAVE … let me tell you that they HAVE again come with closing assistance, which should at the very least cover their area registration and transfer taxes. When this happens, you get paid and you can even walk away with cash in hand, if you are a good negotiator. Now, just because you can get closing assistance for no-down-payment deals, if a house and area are great, you can take the risk and cover the cost. Yo, never pass up free money if a salesperson can and is willing to help.

3. You have bad credit – WHO CARES? With subject to offers, you get the best of both worlds, the property you want and none of the credit burden. If you’ve had a couple of bad grades, filed for bankruptcy, got divorced, or for some reason you have less excellent credit, it doesn’t matter. Acquiring properties subject to existing financing is excellent for investment properties or your personal residence. Now, with that said, if the cause of your credit problems is that you can’t pay on time or you just forget, we recommend that you seek help with financial planning. That said, your credit will not prevent you from acquiring an investment property.

4. Take Charge of Existing Payments – If you’re lucky and smart, you’ll find great deals from motivated sellers who have secured homes with EXCEPTIONAL interest rates and VERY LOW payments. Once you get those low payments and get a home under lease through closing, you can now take care of your current mortgage payments, but since you are smart, you will never pay them, as your TENANTS will pay the monthly mortgage payments for you. plus a substantial increase to generate POSITIVE monthly cash flow. Unless you are in pain, DO NOT take over payments if, at the very least, you cannot get a tenant / buyer to cover the full amount; otherwise, you will immediately start to lose money.

5. To Assign or Not to Assign: Now since you were smart and secured the deal, you can either buy it yourself and play owner to build generational wealth or you can sell wholesale (or some investors refer this option to the property to another investor) for a quick cash fee. This CASH is yours WITH NO CHAINS attached or owned on the property. The new investor will cover the rest, the closing cost, and more.

Disadvantages

Well, as with most things in life, using the Subject To method also presents some challenges. These are the top 2 challenges, but I can certainly list many more, but you don’t want to spend the weekend reading this article.

1. Integrity, Honesty and Ethics – When you start talking to motivated sellers or buyers / investors, you have one thing to deal with … EARN THEIR TRUST. No matter how motivated the seller is, they are not just buying your good luck, the sellers are confident that you will keep your word, pay the mortgage, and of course buy your home. The downside is that not all investors are trustworthy and they screw it up for people who are true investors and are NOT looking to take advantage of people. Not only that, but some of us need help and training in the honesty department.

2. Ugly Mortgages – ¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿¿ ¿ Oh! For some of us, we don’t discover that mortgages are bad until we spend too much time in the process. Change your number one process, but STAY AWAY from GUNS !!!