"Sub-to" exit strategy-L/O or CFD? Why? - Posted by Stacy

Posted by Jim FL on September 15, 2004 at 20:05:27:

Stacy,
I use both methods, as well as a few others to exit from sub2 deals.
What makes that decision?
Frankly, each property, my particular situation at the time, and of course, profit.
I often buy houses sub2, then sell them retail, either cash, conventional, lease option, or agreement for deed (land cotnract).
These are of course purchased for well below market value.

I look at my investing this way.
I will not buy ANY property, no matter the method used to acquire it, unless I can sell IMMEDIATELY for cash, and make a nice profit.
A ‘nice profit’ to me is at least 5 figures.
Does this mean I sell all properties purchased to buyers with funds/funding, making those 5 figures in cash right away?
Nope!
Some I carry paper in one way or another, others I keep as rentals, and some I sell quick.

No need to stick to one exit strategy, and in fact, I’d advise making sure BEFORE YOU BUY that more than one exit is available.
Remember, you make your money when you buy, so don’t buy the hoopla from some mainstream sub2 teachers that taking over payments on houses fully encumbered or close is a good idea.
It ain’t!

Anyway, that’s my two cents, keep the change,
Jim FL

“Sub-to” exit strategy-L/O or CFD? Why? - Posted by Stacy

Posted by Stacy on September 15, 2004 at 16:59:32:

Just want to know for sure,what is the best or preferred method for selling a property aquired via “subject to”, and why you feel it’s the way to go.
Thank you for any and all help.
Stacy

It Depends On Your State Laws - Posted by John Katitus

Posted by John Katitus on September 16, 2004 at 01:02:14:

In Ohio, the recourse for regaining a property sold on Land Contract with less than five years or 20% of the full price paid is almost the same as a rental eviction. You need to find out what it is in your state, maybe by posting here.

A Land Contract is a legal sale as opposed to just a lease. I explain to my buyers that this means they legally own the house and are entitled to all the benefits of ownership including the mortgage interest tax deduction, which is substantial. This makes the Land Contract much better for the buyer than a Lease Option and therefore an easier sale. But first determine how hard it will be to get the property back if they stop paying.