i understand what “subject to” is. its what a buyer uses for its exit strat. But when i was talking to a investor he said "we only buy “subject-to.”? i thought subject to was a exit strat you put on a contract.
I’ve only “Subject to” is a buying strategy, not really an exit strategy, IMHO.
What the investor was telling you is that he/she only buys homes by finding people headed to foreclosure and negotiatiing a deal to where the owner agrees to walk away and deeds the property over to the investor “Subject to the existing financing” This means the investor will own the deed but the loan is still in the sellers name. The investor agrees to make the payments in exchange for the seller deeding the property over.
so can i still do an assignment of contract deal with this “subject to” situation??
Do you have a house deal lined up? Even if you did, an investor that buys “subject to” gets their properties FREE. The only way you could assign a deal to a “subject to” investor would be a scenario in which you obtained a property yourself “subject to”/FREE and you want to assign this free deal to your investor for a couple of bucks.
The investor would pay your fee then (I would assume) have the property deeded into his name somehow. I’m sure in this scenario an investor would likely pay you because he’s getting a $100K or more property for 2k to 5K and doesn’t have to take out a loan.
If you just have a house that you contracted on for an All Cash price with a seller and you are trying to flip this to a Subject To Investor it won’t fly because this investor is not interested in taking out a new loan or spending really any money. They just take over the payments on homes while leaving the sellers existing financing in place.
bashir has a pretty good grip on it. One other thing I will add is if that Sub2 investor doesn’t pay the Mortgage then its your @rs not his, but if your going to lose your house anyway who cares. Herbster
Not all owners have to be in the foreclosure process in order to buy
“subject to” (also known as “sub2” and “sub-to”).
In fact, I’d prefer them not to be in pre-foreclosure,
as it’s less up-front money out of my pocket to get involved with the deal
(to bring the payments current).
Yes, you can assign a sub2 deal.
Some will tell you not to, while others use it as a viable method
to “flip” a term-structured deal.
Tread carefully and make sure the assignee is very trustworthy.
You’d hate for things to fall apart all because the person you assigned the deal
to failed to perform.
But since so many would be motivated sellers are ‘underwater’ , it seems it would be hard to find these buyers where you would WANT to take over their existing financing. Right?