Subject - To Pros? How to do? - Posted by Bob K
Posted by Bob K on August 17, 2003 at 21:58:49:
I do primarily rehabs. I have a LOC for deals with a local bank, however, I have 3 other rehabs currently, and another opportunity has just presented itself but its a larger purchase value (around $150k purchase price + rehab costs of about $10k)
Im worried about monthly debt service if I take on the $150k property, but I am wondering if perhaps SUB TO may work in this situation (have never done a sub-to). Here are the specifics:
FMV (after repairs) $190k based on comps - very conservative - at $190k, it would most likely sell very quickly.
$147k payoff on first (about $7k in arrears)
$10k on 2nd (I’ve talked to note holder, I may be able to get him to take $4k.)
Needs roughly $10k in cosmetics - carpet, paint, concrete drive repair.
So, $147k + $4k + $10k + $2k closing costs = $163k on the LOC.
Would SUB TO work in this scenario:
- take house SUB TO giving owner $2500 for moving etc.
- Reinstate for $7k
- Pay $4k to 2nd
- Put the $10k into repairs
So, I’m into the house for roughly $23.5k, sell quick for $185k
185k - 140k on first = $45k
$45k - $23.5k = $21.5k
Is this viable for SUB-TO? Any other ideas?