Day 45: Meeting with buyer

MEETING:

We had got the cash offer on my first deal. $95,000. I meet with the buyer tomarrow to go over all the paper work and set a closing date. It seems to be going smooth but anything can happen. Worse Case, if the guy backs out of the deal for what-ever reason, there are several other people lined up to see the property. this deal as it stands rigght now will net me over $40,000 profit. That is more than I made all last year!

SETBACK:

i mentioned i secured a lawyer for closings in DE. for my deals. well, it seems thier firm hasnt the slightest idea on closing a creative deal, such as Sub-to (explanation below) . that method of investing is to be my primary focus so I had to pull my ad’s and find another lawyer.

It took awhile but i found someone I think can help me with the closings that understands the concept. we will be meeting this tuesday and go over all the details. if all is good, I’ll be able to re place the ad’s and start looking for my second house.

WHAT IS SUB-TO:

Sub-to is short for Subject to. In the REI field, we are talking about mortgages or pre-existing home loans on a property. what it means is you can purchase a persons house “Subject to Existing mortgage” where you get the deed and the original loan stays in the sellers name. the benifiet is that you do not have to get quilified for every purchase and avoid banks in general. once the deed is in your posession you then can find a buyer and place them in the house to cover the monthy PITI (Principle Interest Tax Insurance) and when the refinance after a period of time and at the price you set, you pay off the original loan and then the rest is yours. the average sub-to deal is worth $20,000 – 50,000.

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