s a real estate investor,
you should be familiar with Why would a seller even consider
alternative, this arrangement? There are many
non-traditional financing reasons. The seller is almost
methods. Every property owner you always in a situation where they
meet will be in a different want to sell the house quickly.
situation and have different They have a problem that needs a
motives for selling. When you are fast solution. It may be due to a
able to choose from a variety of relocation for work, an impending
financing options, then you can foreclosure, or they may have
tailor the purchase to each even inherited another house.
situation, increasing your
profits and reducing your risk. The most common concern sellers
have is whether you'll make the
"Subject to" is an excellent payments as promised. You should
option when the seller is highly have no trouble gaining the
motivated to move their home as seller's trust if you're
quickly as possible. Subject to confident about what you're doing
means that you purchase a and fully accept that you are
property subject to the existing responsible for keeping up the
financing. Ownership of the payments.
property is transferred to you,
but you don't assume the existing Subject-to real estate investing
loan. Rather, you just take over is not without risk. You should
the payment book and start making be aware that many home mortgages
the loan payments yourself each include a "due on sale" (DOS)
month. Once you have control of clause. This means the lender has
the property, you can rehab it, the right to call in the loan
flip the house for a profit, or (that is, demand payment of the
find a tenant. balance in full) upon transfer of
the title. understand the mechanics of
subject to, you'll find it to be
Most experts think that in one of the easiest and least
today's economic climate, lenders complicated financing
are unlikely to exercise the due arrangements you can put
on sale option, especially if the together.
loan payments are made regularly,
on time, and without Although some may question the
interruption. However, this is a ethics or legality of the
contingency you need to consider. arrangement, subject-to is a
If the lender exercises the DOS legal and ethical way to purchase
clause, you'll need to arrange property. In most cases, you'll
for your own financing or find a be helping sellers out of a tight
joint venture partner who has the spot, providing rescue in their
cash to cover the balance. time of need. Everyone gets what
they want in subject to--the
Subject-to investment deals can seller gets rid of the property,
be completed quickly because the lender keeps receiving their
there's no need for qualifying payments with interest, and you
with a lender. And with no stand a good chance of making a
closing costs, a subject to tidy profit.
agreement is less expensive than
a traditional sale. Once you
About the Author:
Author - Mark Walters is a 3rd generation real estate investor and author. He offers a FREE Online Real Estate Investing Video & Audio Series at http://www.CashFlowInstitute.com
Read more articles by:
Mark Walters
Article Source: www.iSnare.com 
