Real Estate Success Stories Series- Jay London

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Subject-2 Saves Owner, Expands Investor's Portfolio

I started buying homes "Subject-To" in November 2011. Since then I have bought 6. My grand exit-strategy is to market them as Owner Financing deals for credit challenged people.

Here is an example of a Subject- To deal I just got last week. Very nice little 2 bedroom in a mid income neighborhood. Seller contacted me off one of my marketing ads and said that he wanted to sell. Of course I did my homework before returning his call.

Home is worth about $50,000 and Seller owes $37,000. The sellers payments are $350 per month.



I told him that all I could give him was what he owed since I will need to replace carpet and paint.

He asked me why he should take such a low offer and not just list with a Realtor, so I broke down the following numbers to him:

$50000 Asking price
$48500 (97%) offer from new buyer
$2910 Realtor commission
$3000 Buyers closing costs (standard to pay buyer closing cost here)
$1000 Sellers closing costs
$1400 Sellers holding costs until buyer offer (4 months if lucky)
$500 cap on home inspector required repairs.
$2000 Carpet and paint
$37000 1st mortgage payoff
$690 to seller at closing (if he doesn't have to make 2 more payments) and everything went textbook.

I then asked him. Is it worth the headache?????????

RESPONSE: He said NO.

I then said wouldn't you sleep better at night knowing that the payment is made and you don't have to mess with the house ever again.

He said YES.

CLOSED!!!!!!!!!!

I'll put new carpet and paint in it and sell it on a Owner Financed 2 year balloon for $57000 with $1000 down at 8% simple interest.

What's next for me? I'm working on a postcard right now with pictures of my daughters on it for direct mailing to home owners. Its gonna be really cool. I'll share it with REIClub.com when I get it done.

Also, my town doesn't have a real estate investment club, so that got me thinking. What if I could put a few of these guys together and just wholesale to them. So I started working on that in my down time. I'll be sure to let you know how it turns out.

Any questions about this deal - feel free to ask!Jay London
londonsellsfast@yahoo.com

Credit: Reiclub

Comments

  1. Optimus Prime14 July 2021 at 19:14

    I think this is a really good article. You make this information interesting and engaging. You give readers a lot to think about and I appreciate that kind of writing. Tokenizing real estate

    ReplyDelete

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