Hello everyone, I have been doing my homework in REI I realize “sub2” is a great way to get into my first home with hardly any money or credit. I went into a bit of a career slump last year.
Things are great now and back on track… :help I want to get into my first home this way and I am getting ready to market to pre-forelcosures in the PHX area I have a $$ range I’d like to stick to. Aside from just mailing to these lists and calling FSBO does any one have any suggestions on how else to plan out marketing to these lists.
I know not every one will call and I have to send at least 5-6 seperate mailings to each address I pick out. My question is, What is a good margin to start with if a home owner agrees but has little equity in the house?
Should that matter as long as terms are good and payment is affordable?
Should I not even bother? I would like to help some out in this position and want to have the home to live in as well, so its a win-win…
Any advise would be great, thanks in advance!
:biggrin.I guess as long as they are not upside down on the loan and I can afford the payments, I would be ok?
I think that is more of a refined question…
Thanks!
there are all kinds of factors that go into deciding if to buy a property… what is your exit strategy?
Although I have done hndreds of deals sub2 I wouldnt buy unless I see a ton of equity… Unless I was an investor who wanted passive note income…
Good Luck
Michael
The exit strategies I would consider could be turning around and selling the contract for an assignment fee, whole sale, or would consider optioning the property, but my efforts are currently going to be tied up with first finding something that fits.
My fiancée and I work full time so marketing alone, is going to take up a lot of that free time we have. So we are setting up a schedule to get this done first. (weekends seem to fit best)
I have a buddy ready to sign the deed over due to his divorce, but his house is worth 195K or so and he owes 220K. Already missed one payment and both of them are not making any plans to catch that up. His realtor even advised they might not sell… I know thats not a good deal but good to know that at least people are willing to do this!
You know, just an idea here, but why not have your buddy sign over the deed and then advertise the home for sale as an owner finance deal? Maybe ask 6k down and $1900 per month for example. Then take the money someone puts down, reinstate the loan and put the rest back into marketing for more deals. Make sure your monthly payment is less than what your new buyer is paying, then give him a note and mortgage with 2 year balloon. You could probably get more than the current market value that way too, since theirs no bank involved.
There’s a lot of unknowns in this scenario, but going off what you said it sounds like something you should at least look into.
I guess that would be ok… I mean I dont have to live in the home but can make some passive income that way.
*So it should not matter that he owes more than the house is worth?
My only concern is not finding anyone to take ownership and having the house foreclosed on. What other exit strategies are there other than maybe assigning the contract to someone that can do a short sale for it, or L/O…