Subject To Real Estate Investing: Why I love Buying Owner Financing Houses (Sub 2)

Subject To Real Estate Investing: Why I love Buying Owner Financing Houses vs getting a long from a bank.

Hey gang this is mike with my real-estate dojo and today’s lessons about why i love subject twos now you guys know that i’m a buy and hold guy and subject tuesd is a great strategy that i can use to monetize and decrease my risk and use other people’s money instead of using my own cash yes i still need some cash for maybe rehab or marketing or things of that nature

But it doesn’t require as much cash as an auction investor i’ve already got a video about what an auction investor is so take a look at that now there’s a lot of reasons why i love subject twos lucky come up sorry guys i’m at the rocky mountains my dogs over there wandering so i want to make sure he’s okay alright so there’s a lot of reasons i like substitutes

Okay number one is that i’m able to step into the sellers shoes and take over their payments and so that’s number one i don’t have to come up with my own cash i could just take over the motivated sellers on the line alone and just step in their shoes and make their payments the second thing that i love about subject twos is that i’m not getting the the in debt

With my own social security or my company’s ien number employer identification number so neither me or my company llc is getting into debt we’re not using our yayan or our social security there for the seller is becoming the lender in the case which which means that this is very important one the any other banking company or you pull your own credit up that debt

Is not gonna come underneath your liabilities which is a great thing number three reasons why i love subject twos is that i negotiate a non-recourse loan and what i mean by that is that if i happen to default which i never do because i do what i promised i wouldn’t be taking over people’s notes but if i happen to default for whatever reason that the seller will

Only come after the property and not after me personally where if you goes with the traditional loan let’s say from a bank of america or wells fargo or whatever lends our institution you have to personally sign a person let me note which means that if you default not does the lender take over the property but – they ruin your credit okay and you’re personally

See also  Investing vs Loan Repayment | 2022 | CA Rachana Ranade

Reliable for where in the case of the subject – i negotiate a non-recourse loan where the lender which has happens to be the motivated seller if i default they only take the collateral and they don’t come after me personally okay because i let them know in the beginning that hey this is the way i could only do it to help them out another great reason why i love

Subject twos is that the amortization now whenever you get a loan let’s say from whatever lender bank of america wells fargo whatever whatever lender it is they used to do a 15 or 30-year amortization which means for the first few years you’re paying out of your monthly payments majority b goes to towards interest and very small amount of goes towards principal

Reduction so every month let’s say if you pay a thousand bucks this much as it’s gone towards principal interest and only this much is going towards principal reduction so it takes about a good six to ten to fifteen years where the amortization is not in the bars favor where every month they make the thousand dollar payments majority of money now is going to a

Principal reduction instead of interest reduction okay so what coming back to the story i love the amortization part because when i take over a seller’s mortgage they might be in the home for i don’t know five years fifteen years i take over their payment they already paid so much of that amortization interest off and not majority of it is into the payments i may

Go towards the principal reduction instead of the interest which was that really benefits for me because i’m not living in the property my renters are in there so every month they pay their reducing that debt balance a lot more for me okay because of the amortization setting right now anyways another powerful reason why i love subject twos is because i’m able to

Leverage my money more okay so let’s say i had 50k in the bank or about a hundred ki five million dollar k whatever it is okay instead of being able to limits to go buy 10 properties cash or be able to go get under debt with them with a lender okay and the bank now allows me to say okay no you could only get six so you could only get seven houses and i’m the mercy

See also  BONDED FINANCE PRICE DROP WHAT I DO NEXT BOND COIN CRYPTO INVESTMENT

At them i don’t have to deal with their bureaucracy bullshitted rules okay i have unlimited access because more i’m able to be creative the more i can set up different structures do owner financing subject to wraps so many different strategies out there so subject to serve a very fantastic way to ascertain property and leverage it out so you could have more money

And the good thing is the debt is not under your name like i talked about the first few benefits you could get a non-recourse loan it’s not under your name okay which is a very very powerful way to invest another really why i love subject oozes i could buy a subject to and then turn around and honor finance it now i’m the lender so let’s say my original loan was

Only like five percent and i turn around owner financed it somebody with somebody that can qualify for a loan for many reasons maybe because they’re good people and that i fell off the horse or maybe you know their self business owners they got 100 k in the bank but the lenders are too ignorant to give them money because they don’t fit into their cookie cutter

So whatever these guys have 10 20 40 50 grand down you know they’re good people they just can’t get a loan and so i get that five percent loan and i turn around and wrap it around and do owner financing and do ten percent for the from the new buyer and i’m getting the spread i’m becoming the bank so whatever my payments were let’s say thousand dollars a month now

I’m selling it to this other guy for 1500 and i’m getting the difference between that after subtracting the you know interests and taxes and all that stuff okay i’m an insurance so subject to you is a very very powerful way because you could become a lender as well in the process that i just explained there’s so many other benefits to it okay if you’re a fixed

In flipper for example instead of going to the auction and you know your home is 100k instead of just buying at 100k and then you have to put 20k into the repairs so you need to have 120 k why not just advertise two or three thousand dollars find a motivated seller and then let them carry the note you just put that rehab money a 20k into the property or whatever

See also  foreign investment

It is have them deed you the property you know you you do the rehab money once you sell the property then you pay them off okay or pay their loan off or whatever you negotiate the loan and the difference for their equity or whatever the you guys came up with so it allows you to save a lot of money as an investor even if you’re a fixing flipper if you’re buying

Hold like a guy like me i am i’m kind of out of breath because the altitude is pretty high but there’s a lot of different benefits of subject to wraps owner financing okay let me start think up any other ones because i’m just freestyling it it’s not like i practice hey isn’t it so beautiful it’s so quiet i hear okay here’s another good one on a substitute whenever

You go get a bank loan man you got to pay all this junk fees like loan the generation to generation fee carrier fee this feed that fee all this junk via the title company and you get to bypass that or from the brokers the loan broker you get to bypass that because you just took in subject to so that original seller paid for all that junk fee and you even had to

Okay and now you’re in control you’re able to have your closing as small as you want you know anywhere from like 750 bucks so you can have as fancy as you want to like two or three thousand but now you’re in control where if you go with traditional lender you’re not in control anymore you know you’re basically you know on a chain because that’s how they structure

It where if you go up this path you’re you’re able to structure being a more in control which is another powerful benefit of subject twos so anyways that that’s a few powerful ideas why i love subject twos if you guys didn’t have any other ideas why you love subject twos that i forgot please list it below and let let’s help the community out anyways guys this is

2016 don’t take no for an answer if you like these videos please like please comment please share see you later gang

Transcribed from video
Subject To Real Estate Investing: Why I love Buying Owner Financing Houses (Sub 2) By MyRealEstate DOJO