Structuring Subject To Offers For Real Estate Investors

While you should check with your own legal adviser to find out the legalities and exactly how the mechanics of buying houses subject to the existing financing without getting a new loan works, we do have sections for our Real Estate Investor Bronze Members on how to structure offers on these types of deals.

While I will give you a brief overview of the process here, you can see the details of Structuring Subject To Offers (link for our Real Estate Investor Bronze Members) and if you feel I need clarification on anything in there, please do let me know.

So, here is a basic overview of how to structure an offer to buy a house “subject to” the existing financing.

First, determine the price you will be selling the property for once you purchase it.

Second, determine the amount of profit that you want to see by doing this deal.

Third, determine the entire amount of cash you will need to do the deal being sure to include holding costs of all types, fix up money, cash to the seller, et cetera.

Once you have these numbers, here is the big picture–over simplification–of how to structure the deal.

Subtract from the price you are going to sell the property for the profit you need to make on the deal. Also, subtract TWO TIMES all the cash that you will need to complete the deal as well. The amount that remains is the MOST that you can afford to pay for the house agreeing to make payments.

You will definitely want to run this type of analysis on at least a few dozen properties that you are considering buying to get a feel for how this works and review the more detailed explanation of it that I posted for our members and on the free training downloads we provide to our members.

Until my next post,

James

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