Imagine this scenario (it is very similar to something that an acquaintance of mine dealt with not that long ago):
Bob is a real estate investor. He has been very frugal with his money and has had good results from the real estate properties that he has been investing in for the past decade or so. In fact, he has had such good fortune (thanks to careful planning, analysis and management of his properties, of course) that he is ready to cash out and retire. However, as we all know, the time that we might want to cash out is not necessarily the best time to cash out. So what does Bob do?
He has several options:
1. He can try to sell his properties anyway, but he may have to leave them on the market for months, and they may not sell for years.
2. He can just hold on to the houses and keep on working as an investor, putting off retirement.
3. He can try to come up with a way to make some money off of his properties even though they are not going to sell for anywhere near full value so that he can make some money to start his retirement.
Now, at first Bob may not seem like a particularly likely candidate to sell his properties subject-to. After all, he is not in any danger of losing them. He’s just tired of owning them. However, the emotional pull of wanting to be able to move on into the next phase of your life can be a powerful draw, and in these times real estate investors – even the successful ones – are actually prime candidates for subject-to investing.
Of course, it is not likely that Bob is going to sell you all of his properties for next to nothing, but if you can offer him a good lump sum and take over the payments, there is a pretty good chance that he may move on the option to use that money to go ahead and move on with his life while keeping the rest of his properties intact for the time being. Even better, because Bob is a real estate investor he will likely have a better understanding of and be more amenable to this process than other property owners (though this is not to say he is going to be thrilled to take the loss). This is a great time of opportunity, but it is undeniable that people are not necessarily finding themselves in the positions that they thought they would be in a decade ago. As a real estate investor, increasing your knowledge of how to make subject-to transactions work can go a long way toward enabling you to present them in a persuasive and attractive light regardless of the identity of the seller.
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.
