Selling Subject-to Properties
If you are like a lot of real estate investors
, then you do not actually want to own subject-to properties forever. In an ideal situation, you would take over the loan for a few months, and then sell the property at a profit by selling the house at value rather than simply allowing someone else to take over the loan. This is the ideal situation, but it is not always the one that occurs, as you are probably aware. In fact, many real estate investors who bought large volumes of subject-to properties a few years ago are still stuck with those properties because they did not evaluate them based on the coming market conditions.Once you have purchased a property using a subject-to transaction, you will need to devote some time to selling it (unless you plan to rent it out, which we will overlook for the time being). There are many ways to promote your property, and you can attract many viable buyers if you know how to go about it.
First of all, you need as much exposure as possible. For this reason, working with a real estate agent may be a good idea even if you usually prefer to promote your properties yourself. Thanks to government incentives and the great deals on the market, many people are looking for ways to buy homes even if they cannot obtain a traditional mortgage. It makes a lot of sense in many of these cases to let your realtor sift through these buyers rather than doing so yourself.
In addition, you need to let your colleagues know about the deal that you have just made. After all, just because you do not want to hold onto the property for the next few years or longer does not mean another investor with a different agenda may not be interested. And, to this day, it is easier to work on the sale of a subject-to home with an investor than with a conventional home buyer because the investment aspect still will make more sense to the experienced real estate investor. Of course, you must factor in that you will probably get a better price from the conventional buyer who is planning to live in the property for the next two or three decades rather than from an investor who plans to eventually sell it at a profit.
Remember, just because you own a subject-to property you are not limited to selling it again subject-to (although this can be an attractive financing bonus that expands your market of potential buyers). You can also lease-option it, sell it via a conventional loan or even refinance it if the market in the area will tolerate it. You may elect to renovate it before you sell or even try to flip it for a nominal fee of a few thousand dollars (or even less if you decide to play a bird dog role and simply locate the deal for another buyer). All of these are options that will enable you to generate wealth with your subject-to property even in a tough real estate market.
Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate investing. For more information please visit www.CoachingByPeter.com
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