#entrepreneur This week, post 4
What is Subject to?
In a previous post we realized that Sandwich Lease Option
Can work well with a property owner who wants to sell that has no mortgage or low mortgage and insists on getting a market price without giving a discount and does not want to pay a realtor or a non-mortgage or low mortgage asset who has not thought about the sale option looking for renters but also tired of running after the money and being a landlord and he Don't know another way.
Subject to this is usually a customer with a higher motivation to sell for the reason that his expenses are much higher because he also pays a high mortgage.
By this method I propose to the property owner to leave the mortgage in his name to transfer ownership of my name and pay all his expenses only! Up to 3-4 years in this situation I am responsible for the property and it receives monthly payments directly into the mortgage account and at the end of the period it will receive the market price! Here I take ownership but I can return it at any moment and zero investment.
Why would a property owner agree to such a thing?
A property owner who has a high mortgage and has no equity or the equity is very low and needs to sell a stuck property, a broker cannot sell it because he cannot pay it, an investor and a buyer who takes a mortgage will want a discount that he cannot provide and then he is stuck with high expenses each month, if He will not be able to pay not only lose his property but his credit will be destroyed for at least 7 years, he will not be able to get loans, not buy property, homeowners will not want to rent him a property because everyone has access to databases and some property owner would want a tenant who could not pay and if He has no family to help, he becomes homeless.
Such transactions require a high degree of credibility because if we take his expenses it is very easy to break an agreement and get him into trouble at any point because the property went by my name but the mortgage remains named and the bank does not know him.
Beyond that, owning the bank's name can call for repayment of the mortgage and then if I do not have investor financing, I will have to cancel the agreement with the property owner to repay it and reimburse the option fee paid by the tenant who entered the Brent Tuon House.
But broadly speaking to many investors who are also using this method as part of their strategy it is not happening
And if so by the margin and why?
Because the bank is not a house sale the last thing the bank wants is to keep a house and find that the value has dropped and they can only sell at Short Sale, and I have come across some homeowners who say the bank cut their mortgage in half and reached a renewed settlement and gave up the foreclosure process when the banks failed to repay the The money their scoring loan goes down so it makes no sense to ask for a mortgage repayment when everything continues to be paid, but you have to keep that in mind in the background.
When buying a home at zero investment there is a certain risk and in my opinion lower than Flip there are countless risks to make the deal a loss if there is no high margin of profit from the beginning. And so it is risk management that everyone should consider what is right for them and whether they sleep well at night with the decisions they make.
In the next post, we will learn how an investor who bought a property overhauled Flip can earn more money in Lease Upsin than Rentel and how an undisclosed investor can leverage the same money he has to buy multiple assets.