Hi everyone! I would really appreciate some input/advice here before I start my new business plan…
I’ve been successfully doing flips for the past year. I’ve purchased, rehabbed, and sold 18 properties in the last 11 months but am really trying to figure out how to buy and hold properties. It’s easy to pick something up with a hard money loan and put down 20%, however, thats a really easy way to also run out of capital. So it seems as if Subject To investing is my best bet because it requires the least amount of money out of pocket.
Now I’ve read some books, articles, etc but I was wondering is anyone on here actually REALLY DOING LOTS OF SUBJECT TO DEALS? Like at least 5 a year. It seems as if you would just find people with little or not enough equity to sell (using foreclosure radar) who are in default and market to them to sell to you subject to. But does this approach actually work?
My questions for the experienced Subject To investor are:
**Most important question
1.) How are you approaching these people? Is it by mail or are you knocking doors?
2.) What marketing is working for you? I have seen bandit signs, craigslist, and blanket mailings (personalized)
3.) What is a realistic goal for picking up properties this year (as my first year of subject to investing)
I am curious as to how you are finding your deals now. What sort of marketing is working. 18 rehab projects in 11 months shows a serious work ethic and a model that is working at some level.
My reason for asking is I am curious. I also expect you will find the seeds of what you want to know from your current activities. Subject-to deals normally come from situations where a cash out either will not work for the buyer (the seller owes too much) or the seller would be worse off receiving the cash as a lump sum. Find those sorts of sellers and you can do subject-to deals.
Yes, I have done a number in the past. The deals all came from people who had a problem and a subject-to solution worked. Most of the time it was not their top choice. It was the only choice they were left with when the dust settled.
I don’t going looking specifically for sub 2 deals, they just show up as a possible strategy for a prospective deal. When I get a lead I find out the situation, look at my list of potential strategies, and check those that may work and study those, and many times a sub 2 was the best or only way to go. You know the old saying if you have a hammer everything looks like a nail. Some investors have a couple of tools in their toolbox, some have a dozen. The more tools you have the more repairs you can make.
Hey Chris. Why would you want to seek out people with little or no equity? I realize that everyone has different objectives and that this might work for some business models. Are you thinking that these deals might have big monthly cashflow potential?
As Brian mentioned, subj2 is just another tool in your toolbelt. It sounds like you’re a successfull rehabber, and want to switch gears to some long terms holds, without running out of money.
How about looking for private lenders or commercial financing from local banks? I would rather see you buy deals with equity with those sources than to buy deals with little to no equity.