Since we have been on the investing in real estate Subject To topic lately, there have been a couple questions that we have been answering for new investors.

I always think that for every person who asks a question, there are 1000 who are afraid to ask the same question… so hope these answers to real questions from real people help you in your real estate investing journey.

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QUESTION: (from creonline.com)

“I was able to find a cash partner( past client and friend) who also wants to invest. Our plan is to use the “Subject To” strategy to purchase the property and rent the house with the option to buy once we gain control. I’ve been able to get a little advice from my Broker on this strategy, but was wondering if you guys could answer a couple of questions for me.

How do you determine the amount of consideration to offer to the sellers? For example: Most people may offer a few grand above the amount of the existing mortgage, others may offer a percentage of the profit once the property is sold. What’s the best way to determine this?

If the mortgage remains in the name of the owner, wouldn’t that deter the owner from buying another home within that time frame? If so, is there some suggestions that could be offered to the owners to get around this? “

ANSWER: (from theREIbrain posted to creonline.com)

Want to read the rest of the article?

“Hey Rhonda,

First off, what amount of consideration to offer the seller depends on the transaction.

Some transactions the seller will simply let you take over the mortgage and walk away. Some will be a bit less motivated and want moving money… and some will be not very motivated and ask for a bunch of money or share of the profits.

As David says, the only time you will really ever offer consideration is if there is a lot of quick profits in the deal.

Now, remember, you are out there to actually and genuinely help these sellers. If that is truly what you and your business are doing, it will be very easy to determine the amount of consideration to put up. You’ll know when it is the right amount to both provide you with a nice and easy profit and solve the sellers situation as well.

Like David says, it seems like you are talking to some sellers who are not so motivated, which leads to more cash consideration from you.

You need to get out and start churning up 100+ leads a month and picking out the truly motivated sellers. Then you’ll see that these sellers tend to not care about you carrying the note for with it still in your name.

Regarding your second question…

Once again, find the motivated sellers and they just want out. A good percentage of these sellers will not care if you take over their payments on their loan because they just want out from under the loan.

The best way to make the seller feel comfortable with you taking over their mortgage payments and keeping that mortgage in their name is to provide them with some type of credibility package that helps them to trust you and your company.

If you are going into this just as an individual, and not a legitimate company, odds are the sellers will probably be more wary.

So, if you haven’t aleady, form your company and start to gather a page or two of references that show credibility for you and/or your company.

I realize taht you have not done any subject to’s yet and have not testimonials from sellers… just get testimonials from past clients in your business that attest to your integrity and honest. Once you have done a few deals and have some happy sellers under your belt, put their testimonials in the credibility package.

Half of the battle of becoming a successful real estate investor is marketing. Not just newspaper ads, radio, bandit signs, etc. Marketing is how you take a seller from unknown to prospect to client. This includes making the client feel comfortable that you can truly solve their problems.

Anyhow, I know that this went far beyond what you were probably looking for… but it needed to be said because on your current path you are not going to be successful in REI anytime soon. Just re-read this post and pick and choose the ideas that you want to implement this week and go for it. I guarantee that you’ll be much more effective.

Good luck! ”

Trevor Mauch
thereibrain.com

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QUESTION: (from creonline.com)

Good afternoon! Last night I had an appointment with a seller. Their new house is ready and they need to move into it next month. They can’t afford to carry both mortgages, so I did a subject to presentation. Here’s an objection that I need help with. I handled it, but not too well, I don’t think. The seller says, “So, if your company goes out of business or bankrupt in 2 years, we’re left with the house and mortgage? AND you still have the deed?” What is the best response to this objection, one that can help me continue building their confidence in me that I can and will perform (Although I am not guaranteeing that performance, verbal or otherwise. I’m honestly representing my intention, no more, to do all I can to fill the home, keep it up and then get it cashed out as soon as possible- which could be very soon, or not so soon)? Thanks for reading this long question and for your help! Sincerely, Larry S. Riverview, FL

ANSWER: (posted by thereibrain at creonline.com)

Hey Larry,

Just my take from the marketing side of it because that is what my company excels at.

I like to think about everything as a marketing opportunity.

Of course, getting prospects to call you is marketing; however, that is only part of the battle. Marketing is only just beginning once the prospect calls.

So, to help solve this situation you need to put yourself in your prospects shoes.

What would you like to see if you were this seller?

I myself would probably like to see that you are a trusted person, you have integrity, a track record for doing what you say, references who can attest to your (and your company’s) character and trustworthiness, etc.

Think about the last late night infomercial you watched.

What was all over the commercial?

TESTIMONIALS

Testimonials (or social proof) is one of the most powerful persuasion techniques you can use to help the prospect trust you. People like to know that you will perform and that you have a track record for performing.

If you haven’t done any subject to deals, who cares. Work up a couple pages of testimonials from anyone you have worked with or know that can attest to your character, integrity, trustworthiness, etc. Even these will help out.

As you go and get a few subject to deals done, be sure to gather testimonials and put them in your credibility package.

So, one way to overcome these objections is to provide social proof that portrays what others have said about you and your company.

On another note, if you are not working as a company (I assume you are), you are hurting your credibility. Just working as a legitimate business rather than just some schmo out on the streets, helps to give you a ton of credibility right there.

Register with the BBB also and reference that in your credibility package.

Well… that’s just a few ideas right on the top of my head.

Hope that helps.

Trevor Mauch
theREIbrain.com

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Well, I hope that helps a bit.

Both of these posts reference the importance of knowing the marketing and psychology side of real estate investing. Marketing is an ongoing process that doesn’t stop when the prospect calls, but it goes on even long after the transaction has closed.

If you have any specific marketing questions don’t hesitate to let us know!

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