Need some help with subject-to (ST) deals. I get quite a few leads on properties with little equity that would be good candidates for a ST deal. The main issue I keep running into with them, however, is that they almost all SEEM to have higher monthly payments than I’d be able to get a tenant buyer to pay (i.e. 2 recent examples - $1800/month payment on a $190k house, $2300/month on a $250k house). My question is how do you get a good feel for what monthly payments should be in relation to the market value of the property - or any other way? Is there a good ratio of monthly payment to market value, do you look at rents in the area, can you look at what payments would be for a mortgage with very little down (like a tenant buyer would pay - say 2-5%, 30 year and a higher than average interest rate - say 7-8%)? I don’t want to do a deal and then pay holding costs for months because the monthly payments are too high. How do you folks who are making ST work in your area figure this and know when you have a deal you should pursue and when you should walk away?
Thanks for your help!