Just a general question with my first post…
Are people still doing many sub2’s in this market?
Is it harder or easier to find these types of properties?
Any changes in how you do things?
Are you doing anything differently as far as marketing?
Thanks!
hamilton,
Sure, I am still doing subject to deals in this market.
Actually, I haven’t changed the way I invest at all, which is basically to do transactions that make sense, no matter what method we use to buy.
I can also tell you, it seems we are getting more seller calls where sellers will actually come right out and ask if we can take over their payments.
doing less deals in this market, but, making the same money with less work.
Might have something to do with me getting older as well, not just the market…in fact, I’m sure that’s it.
No longer need to do 50 deals to make the profit we want.
Cherry picking deals has become easier, lot’s of motivated folks calling these days.
Just bought two houses last week, subject to, each at about 70% of TODAYS value…sellers were laid off from a local company and needed out now to move on to greener pastures…both from same employer. Flyers on the cars in the lots near the company doing the lay offs got those leads for us.
HTH,
Jim FL
Jim Fl:
Thanks for the answer. Was wondering if sub2 was still viable.
Are you moving more to a hold and rent, or lease option, or outright sale these days?
Thanks again
Jhamiltonj,
I do pretty much a little of everything.
At the moment, we have two wholesale deals under contract, with options. Those are for sale for fast turns. The deals are great, so frankly, if I don’t get what I want, I’ll close myself and hold them as rentals.
We also have four houses for sale with owner finance, which were picked up subject to, and the loan renegotiated to terms that suited my needs.
As well as a small list of properties we are getting from a private lender who took them back, but does not want them…the lender is carrying paper, with pretty good rates, and a 5 year balloon…so, some of those will be sold seller finance, or, lease option, and some kept as rentals…because the profit from the ones we sell will allow me to keep a few of them as free and clear smaller rentals.
I pretty much look at anything, and if the numbers work, get it done one way or the other.
I prefer to mix it up between fast turns to build of capital, and frankly, savings, other purchases, down payments on seller financed deals, etc.
As well as buy some and keep them for cash flow, because that’s what truly provides freedom of lifestyle…constant cash comes in, makes life a whole lot less complicated.
And I’ve always gotten a kick out of making money while I sleep, something not too many other business can do.
The other thing I’ve really been having fun doing lately, is buying businesses, both slow and non-performing ones.
Basically, business where the owners are just tired and want to walk away. I’ve been somewhat astounded over the last few months just how many business owners were receptive to basically allowing their places to be sold subject to. Then it’s a matter of tweaking them so they make money and either keeping them, (some we are, if they can be run by others), and some we sell to mom and pop types who want a hands on must be there to run it, kind of business…then of course, we are more than willing to sell it to them and carry some paper too.
Lot’s of ways to make money in this market, if you pay attention.
good luck to you,
Jim FL
Jim FL:
You said:
We also have four houses for sale with owner finance, which were picked up subject to, and the loan renegotiated to terms that suited my needs.
How were you are to renegotiate with a sub2 lender? I am assuming it wasn’t a short sale.
Also, do you do any short sales?
Thanks for all the input!
JHamiltonJ;
Nope, these were not short sales. Basically, we provided a referal for some help with the home owners, to someone who could renegotiate their loan terms. We like to have a third party do that, and a RE agent or broker works fine most times. This is of course, after we have a contract with the seller’s, agreeing to sell to us, subject to, contingent on the lender agreeing to a work out that suits our needs.
These were basically folks who, even with new loan terms, did not want their houses.
No hardship letters, just forms completed with where they work, w-2’s, etc, and one two of them, nothing sent in other than a letter requesting that the lender lower the interest rate, fix them, and take arrears and apply them to the bank of the loan.
I suppose you could say I do short sales.
Not really in the traditional sense, or what’s talked about in the latest high hype courses etc.
I’ve been buying properties for years, where we negotiated payoff on loans to be smaller, or, purchased the notes at discounts.
Still do that, always will.
Of course, with the larger lenders and servicers, they all have protocal and SOP for obtaining a payoff that is short…BUT, I’ve found that when they are sent a deed placing the property into an entity, along with a letter from the barrower saying they are walking away from the house, most likely filing BK, and don’t care what happens to the house…some lenders will then talk about taking a payoff.
Others, just either steam ahead with foreclosure, or send out deed in leiu packages.
Frankly, with all the folks walking away from houses, it just makes sense to call lenders and see if they’ll work with you or not.
I stumbled on a local porfolio lender who now sends barrowers to me who express an interest in deeding their properties to the lenders, instead of face foreclosure.
With loan term modifications, I gladly take a few here and there subject to, all with the lender knowing full well that I am…since they sent me the lead in the first place.
Bottom line, in this business, especially this market, you never know til you ask.
Take care,
Jim FL
Answers to your questions:
Yes, many many people are doing subject-to’s in this market, ESPECIALLY in this
market. There are abundant opportunities for picking up great properties via
the subject-to method.
It’s much easier to negotiate these deals right now!
Not much changes, just increasing marketing to BUY MORE HOUSES.
Not much difference in what we are doing, just doing more marketing!
We’re still doing sub2 in this market. We’re getting more sellers calling us too and we’re able to cherry pick more of our deals. However, our market has only come down slightly in values. So, consider your market. I wouldn’t be doing too many sub2 deals in Phoenix, Californing, Vegas or Florida - the areas hardest hit by declining values. Not to say that there aren’t opportunities for sub2 there but they will be fewer.
Two marketing strategies that we’re using are: mailing lists of people who have owned their homes for 15+ years (equity) and pre-foreclosures that have owned home 5+ years (before the huge increases in value).
We use a variety of exit strategies, depending on our cash needs. If we need the immediate cash for marketing expenses, living, etc. we will sell the home to a retail buyer. More often than not, we’ll fix up and “sell” on a rent-to-own/lease option.
cortjones