One of the best ways to acquire real estate is to purchase subject to the existing financing. This allows you to acquire the property without having to go to the bank and beg for money.

Also, motivated sellers are more likely to allow you to take over the existing financing because they just want out of the property.

Of course, purchasing subject-to is not the cure all for all deals. Not every seller will want to allow you to take over their loan, nor will purchasing subject-to be the best way to go about it on every deal.

However, knowing how to purchase subject-to is a valuable strategy to have in your toolbox when the right transaction does come along.

I get all kinds of newsletters and email everyday on real estate investing. Most are the same ol’ rehashed garbage, some are pretty darn good.

Anyhow, I signed up for a newsletter from a real investor (turned guru… of course… don’t they all) named David Neese. I have now received all of his “real estate investing course” emails and am pretty happy with the information in them.

For the most part, he doesn’t (or at least didn’t) do any product pitches and doesn’t try to cram the next greatest course down your throat. Most of the info is pretty good and very subjective information.

Head over to: http://www.freerealestateinvestingcourses.com/ to sign up for the newsletter. This is not an affiliate link… I’m not getting anything by referring you to the site… just thought it is a good resource for you.

Now, I signed up for the newsletter about a year ago… so if he has changed it and added a bunch of product pitches since then… I apologize. But as far as I know, its still pretty darn good.

Well… in one of is newsletters he describes how he purchases subject-to. I like the way he wrote it, so here it is…

“I am frequently asked how to put together a sub2 deal, so I put together this “play by play”.

When I purchase subject to, this is how it usually goes………..

1. Seller calls me from one of my lead generators. I prequalify them pretty heavily on the phone. They usually have a good idea of what I will propose before I set up an appointment to go out and see them. By this I mean that I have at least introduced them to the idea of me simply taking over payments on their property. I have a “close” estimate of what “they say” is owed on the property. By “they say” I mean that more times than not, I find that there is more to the story than they tell me up front. Not always, but most of the time.

2. I go out to meet with them. I look at the house to see if it “qualifies”. We sign the sales agreement and we are off to the races. If they don’t know the exact amount owed on the loan,
that’s ok. I will just put “Approximately $XX, XXX” in the space where it says “Loan balances taken subject to”. They should have an old payment coupon around that will give you the balance, if not, no problem. Since I also have them sign an “Authorization To Release Information” on their loan, I can call and get the balance.

3. Once I have the property tied up, I can check and verify all the info they have given me. Loan balances, liens, clear title, and any inspections I choose to do. Since it is locked up I can
take my time with the due diligence and things can progress along at my pace usually.

4. After I am satisfied that all the info is accurate or at least that there is a real deal here, we are ready to close. I have done a few of these so I just print off the trust docs myself and we go anywhere that there is a notary to sign off on them or I can bring my friend who just happens to be a notary.

5. Once the docs are signed, all you have to do is go file the deed at the courthouse and the property is yours. There are a few other details like getting the insurance squared away and so forth that will have to be addressed later, but at this point the house is yours.

This is how I do it. I am sure that there are as many ways to get it done as there are investors doing it. You CAN use an attorney if you like. It might be a good idea for your first one or two.”

Well, sub2 deals are some of the nicest deals because you don’t have to go out and find financing yourself.

I hope this snippet gave you some usable information. Now… I’m sure you still have questions. Shoot them our way and/or post a comment on this blog.

If you do have questions, don’t be afraid to voice them to us or someone else. By standing back quietly and thinking that you’ll be able to “figure it out” on your own, you are actually delaying your success and losing big hunks of money in the process. So, if you have a question, don’t bury your head in the sand… ask it!

Until next time!

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