[Anonymous]

Anonymous

REPOST from the introduce yourself area:

“Lew Hopson here!

I “met” you one Saturday at the U of H Hilton about a month or two ago. I got to the lecture seminar a few hours late and was only able to listen to you patiently and thoroughly answer questions for over two hours.

I learned more there and was more inspired by that two hours of listening than I learned or was inspired by any of the seminars that I have paid for and/or attended for free or for minimal money over the last months to years.

I downloaded “On Steroids” and am in the midst of building my buyer’s list before seriously committing to finding and putting as many single family dwellings as I can find under contract with a view to wholesaling them until I have enough capital to back rehabbing projects.

I have a-number one credit and am determined not to use that credit unless I HAVE to. My wife won’t let me.

I have a request:
Please explain or get me to a source that succinctly explains exactly how I buy subject to (including a deed of trust and a note for the seller mirroring the terms of the original mortgage).
I would like to know just how I would benefit from agreeing to pay the existing mortgage note of a house that the original owner owes too much on(ARV 100k, seller owes (5K).

[Anonymous]

Anonymous

Hi Lew,

Thanks for the compliments about my presentation at the RICH Club in Houston. That group must be starving for “real” information because a lot of people told me it was the best meeting they had been to in years.

Now to address your questions:

In every real estate market, there are different opportunities that really stick out. Instead of trying to work the latest technique or strategy that you’ve heard about, it is better to do two things:

1. listen to the market and find where the opportuities are
2. do the kind of deals that fit in with your needs and your goals.

Here are some examples to illustrate they when and why of different deals:

With a wholesale deal, you control a run down property with an option until you find a buyer. The buyer is usually a rehabber who will fix it up then sell it to a retail buyer.

The market has changed a lot in most areas and there are fewer retail buyers who can get new financing so that means that a lot of rehabbers are either out of business or have drastically slowed down their business. So, wholesaing houses to a rehabber will be tougher than it has been in the past.

On the other hand, landlords realize that the increase in foreclosure will create a whole new crop of tenants and landlords are buying wholesale deals to fix up and keep as rentals. So, as a wholesaler, you’ll have an easier time if you build your list of landlord buyers.

I know investors who are still wholesaling 10 – 20 houses a month – to landlords. And they were selling to rehabbers. So, the wholesale business is not dead, it has just changed and if you want to wholesale, you need to change too.

BEWARE of working with people who have no intention of buying the property but only want to wholesale it again. These kind of deals often fall apart at the last minute.

You do NOT need to use your credit – USE OPTIONS! A contract with a contingency clause is an option.

For a wholesale deal, your contract should set a strike price and a deadline but state that the contract is contingent upon or subject to inspection and approval of the property by your buyer or associate by a certain date.

next post about subject to deals —>>>

[Anonymous]

Anonymous

When you’re first starting out in real estate, it is especially important to not get stuck making payments on a vacant house and not to write checks that you don’t know you can get back quickly.

You can accomplish both of these by just controling a property with an option while you find a buyer who will make the payments and write the check to catch up the back payments.

You don’t ever want to get involved in a subject to deal unless you it will cashflow from day one – ideally at least $200 a month – more is better. And you should never agree to pay the $5k in back payments unless you have a buyer or tenant/buyer lined up who will be putting up the money.

In today’s market, it could take 7 -9 months to find a buyer and you don’t want to make the seller’s problem your problem.

If the mortgage balance is equal to or greater than the current retail value, there’s little change that you can make a good subject to deal.

There are only so many hours in the day and you need to pick the deals you work on that will produce the best return for your investment in time.

Let’s say that the mortgage balance was $100,000 and the house was worth $135,000 — now we’re talking…if it is a fixed rate loan!

Jackie Lange

Here’s how you can do the deal you explained below.