How To Structure Subject To Deal

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I record everything so I can share with those students just in case, something that they could learn. That’s literally the call the meeting I just had with Sam, the previous guy’s a licensed Realtor fix and flips in Jersey. And he gave me the strategy. He’s thinking on this house, and I’m like, bro, you’re literally thinking about this entirely wrong. And in 20 minutes, I restructured his whole entire deal. And he’s like, holy crap, you just saved me. $280,000 on a free phone call. Wow. So yeah, what do you got going on?

So there is this realtor had brought me a property that’s not listed very well. It was listed at one time and come off. It’s a she said it’s he’s a great guy. He’s a retired veteran. So it’s a VA loan. Okay, but he’s, he’s in it for about 190. The property will probably appraise for he’s into at 190. Does that mean he owes 190 to a bank or is that how much he’s invested total? Gotcha. Okay. Thanks again for this time. Yeah, there is a I’m very new to the sub two.

I’ve just recently come across your stuff and wondered why I’ve been beat my head against the wall with everything else in real estate other than creative financing and sub twos. Yeah, That’s his. That’s his VA loan. Okay, so he has an existing loan and he has an underlying loan that has not been paid off of $190,000. Correct. Okay, so he wants to go to somewhere else in Missouri. He wants to move he owes 190 This is like a layup. Okay. What are you going to do with the property? I would like to Airbnb it if it would be a good Airbnb right there. Okay. Do you know do you know if it is? Or do you need help with that?

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If he’s got a house for 190, you don’t know what the payment is. That’s a problem. Right? She’s she said when she had talked with him before, it was somewhere between six and $700 a month. Okay. And this is that’s old information from when she had it listed for with him before. So, I mean, all this needs to be verified, again to be rock solid, but that’s what she told me. Okay, so it’s pretty simple. He’s got a sub $700 mortgage payment every month. He the real estate agent had it listed. So she couldn’t sell the property. This is a typical sub two transaction. He doesn’t mean he’s in foreclosure. It just means man.

An agent couldn’t help me out. No hedge fund could help me out. No cash buyer could help me out literally, this is a ripe, pickin for a sub to deal. Right. All you have to do Kyle, which is a problem for a lot of people is you got to come up with some money to put in the agents pocket probably 1000 bucks for just bringing the opportunity. You got to pay the seller, probably five grand so he can move somewhere else. And you got to pay for some closing costs. So all in all, you’re going to be about $10,000 into this transaction and most people are going to go I don’t have 10,000 bucks. Okay. Okay, I do. Okay, so here’s a couple of things.

You could either a if you don’t have the $10,000 Guess what you could do, you could assign this and wholesale this opportunity to somebody else who does, right. Right. So you could actually make you could actually make 10 grand on a deal that our agent couldn’t sell. A wholesaler couldn’t figure out a hedge fund wouldn’t buy you could assign that deal to create a finance buyer for 10 grand because all day long I would buy a deal like this other than I don’t want to buy anything in Missouri because that’s not the state I buy in. Right, right. Does Missouri is dope, but that’s just not where I buy. Right?

But you could find another creative finance investor that would buy this deal from you, you could assign it for $10,000 Be off on your merry way. So that’s option one. Option two, is if you don’t have the $10,000, you could then sell or finance this to somebody else and sell it to them for 250 to 60 and have them bring 20 grand as a down payment on this, pay the 10 Grand you need to get into the deal, you take 10 grand of that in your pocket. And now every single month, you get a little bit of cash flow, and you’re not actually the owner, you’re the lender that’s a little bit higher level that people have a hard time understanding.

That’s option two, option three is you could do a lease option, you could find a tenant or somebody in town there, that would be like, Yo, I’ll bring 10 grand to the table to do a lease option on this thing. And you could just turn that into a lease option, right? All three of those options, somebody else is covering your costs, and you are making money. Okay, the fourth option, which I actually use the most is I want to own real estate because you see what’s going on with inflation, you see what’s going on with real estate skyrocketing.