Best Sub2 Exit Strategies?

[investinAK]

Here is another Sub2 question....

What are the available exit strategies when buying subject to? (I assume they are nearly limitless, but the key word there is assume.)

Now, what are the best ones?

Which ones yield the best results-on average?

Thanks,
Ryan

[Jim FL]

Here is another Sub2 question....

What are the available exit strategies when buying subject to? (I assume they are nearly limitless, but the key word there is assume.)

Now, what are the best ones?

Which ones yield the best results-on average?

Thanks,
Ryan

Ryan,
You are correct sir, exiting from a sub2 deal, if bought right, can be done any number of ways.
Which one is best?
Frankly, that depends on what you want to accomplish?
Are you looking to cash out FAST, make a nice sizeable payday and move on, or a nice chunk of cash now, cash flow, and LARGE cash later?
or combinations of above.......

As far as what you want to accomplish, you can look at each deal seperately, and decide what that one deal will accomplish for you under various scenarios, or, look at that one deal as a smaller piece in your over-all investing.

Me, I like cashflow, and cash injections here and there, so I sell houses several different ways.
If I buy a house NOW, that has 40% equity in it, perhaps more, than I might be inclined to sell it retail conventional for large cash now, if I need that cash for something else, or see a way to sell within days and make that happen.
However, those are not always happening, so cashflow is important as well, steady income is a nice thing........and this is why we sell some houses on terms.

It also depends on your market.
In mine, I can sell a house with a L/O fairly fast, within DAYS, IF I'm willing to allow people with BAD credit and very little cash in.
If I want more cash, say 5% or above, then I'll hold the house a while if offering a L/O, or owner finance it some way. (seller carried mortgage, wrap, agreement for deed etc.)

If I want to sell a house fast, retail, in most local areas within my overall farm area, I know I'll usually hold it for a month, sometimes more, sometimes less, and be able to sell, IF I sell for slightly below value, and direct buyers to my mortgage broker. (to avoid title seasoning issues, since I am buying and reselling.)

So, which one of the above 'works best'?
For me, all of them, hence the reason I use them all.
Cashflow, and cash are both important, so I think the ultimate investing plan should incorporate ways to build both.......and buying sub2 for WELL BELOW TODAYS VALUE can accomplish that.

HTH,
Jim FL

[Tony Putman]

Jim,
I have just started exploring this forum and have noticed your posts. You have very intelligent and logical posts. I have learned alot in just a couple of days. I want to say thank you for all you are contributing. I am going to learn all I can and then order your course. Thanks again.

Tony :thumbsup:

[Dan Auito]

Way to go Tony. I back up everything Jim sells so there is no time like the present. Fear not. I have you covered! Dan :wink:

[investinAK]

Thanks Jim!

Here is another one to throw at you...

This is what I want to do:

I want to buy houses Sub2. Like you, I want to use all the methods of exits. I really want to be able to help people who have poor credit-who are making an effort to rebuild it-live the American Dream of owning their own home.

When selling to patrons with less than mediocre credit, would it be wiser to use a L/O rather than CFD or seller mortgage? I assume (there is that word again) that it would be wiser to sell on L/O, so as to avoid foreclosure, and simply have to evict the T/B. In a perfect world I wouldn't have to ask this question, as all the T/Bs would never default...YOUR opinion?

Thanks for the great reply Jim!


Ryan

[Jim FL]

Thanks Jim!

Here is another one to throw at you...

This is what I want to do:

I want to buy houses Sub2. Like you, I want to use all the methods of exits. I really want to be able to help people who have poor credit-who are making an effort to rebuild it-live the American Dream of owning their own home.

When selling to patrons with less than mediocre credit, would it be wiser to use a L/O rather than CFD or seller mortgage? I assume (there is that word again) that it would be wiser to sell on L/O, so as to avoid foreclosure, and simply have to evict the T/B. In a perfect world I wouldn't have to ask this question, as all the T/Bs would never default...YOUR opinion?

Thanks for the great reply Jim!


Ryan

Ryan,
With people with BAD credit, what is better, L/O?, CFD? or seller carried mortgage?
That depends on what state you are in.
In Texas, no contract sale for me thanks, their laws concerning them are prohibitive...........imho.

I do think L/O is best for control or easy removal.........however, in some states, a contract sale can also be done with an eviction if the buyer defaults.

You'll get less down with a L/O.......more with a contract or seller financed.

I don't like to carry mortgages unless the buyers have substantial down though, and their credit is a little better,,,,,,,,,meaning I don't very often because if that is the case, the buyers can probably fund elsewhere.

I hate to say it, but the real answer is, 'it depends'.........and your own personal preference.
Your market will dictate what works best, based on a number of factors.

Take care,
Jim FL

[investinAK]

I hate to say it, but the real answer is, 'it depends'.........and your own personal preference.
Your market will dictate what works best, based on a number of factors.


OK, thanks Jim! I guess I will just see what works the best when I get som Sub2 deals going on. I appreciate you taking the time to answer my questions!

Ryan