How can I afford to do a deal? - Posted by Jim C

Posted by Jim C on December 24, 2000 at 21:03:09:

Can I ask you a couple quick questions? What is the difference between taking a house subject to the existing mortgage and an assumable mortgage?

Is the difference that with a “subject to” the owners name stays on the mortgage until I sell the house. And that an assumable mortgage is in my name?

Or are they exactly the same?

And when can I do a “subject to” deal? Anytime?

If I do just take over their mortgage, when do I agree to pay them? When I sell the house?

Thanks a lot for taking the time to answer my questions. I really appreciate it.

And Happy Holidays!!!

How can I afford to do a deal? - Posted by Jim C

Posted by Jim C on December 24, 2000 at 15:44:22:

I don’t understand how I am supposed to do a deal “no money down”. I understand that I can get a hard money lender, but to do this it seems that I won’t have to find a good deal, but instead I’ll have to find an INCREDIBLE deal!

I will only be able to puchase a house for 65% (at most) of what the house is appraised for when I buy it. Then I will have to pay for closing costs, taxes, holding costs, comissions and whatever else is associated with the buying and selling costs.

How does everone do deals with no money? I don’t have anyone that I could borrow a few thousand dollars from, so I will have to make a purchase without any of my own money.

Any suggestions or helpful hints? This is what is holding me back from getting started.

Thanks a lot!!!

Re: How can I afford to do a deal? - Posted by Jim IL

Posted by Jim IL on December 24, 2000 at 23:15:13:

There are just too many ways to buy property with “No money down” to go through it all here.
So, before I go on much further, let me tell you what I’m sure others here will soon.
And, read everything here on this website that you can.

Trust me when I say that you can buy homes with no CASH from anyone.
I have done it, and continue to do it all the time.
I saw your response to the answer WilliamGA gave you.
Buying a home “Subject to” and “Assuming the mortgage” are somewhat alike, and maybe the same under some cirsumstances.
But, the subject to deal as discussed here does not include you assuming the mortgage.
When you assume, the note goes into your name.
When you buy a home “Subject to”, the loan stays in the sellers name, and title for the home goes to you, or some entity you create.
When you take a home “subject to”, it depends on what you negotiate with the seller as to when they get paid.
Frankly, most of the homes I have bought subject to, (like 95% of them), the seller got nothing but debt relief from me.
In other words, they deeded the home to me, I started making the payments on the loan which stayed in there name, and the seller got NO CASH!

Here are a few different ways in which I have bought homes with NO CASH:

  1. Lease Option (okay, controlled the home, not bought)
  2. Land Contract
  3. Subject to
  4. Seller carried financing.
  5. CASH buy, with someone elses money

And that is just a drop in the bucket.

So, read all you can here, and get some books/courses.
You will see quickly that it can be done.

Jim IL

Re: How can I afford to do a deal? - Posted by WilliamGA

Posted by WilliamGA on December 24, 2000 at 16:35:18:


There are lots of ways to buy a house without cash.

You can buy a home on Lease Option, or you can do it my favorite way which is subject to the existing mortgage. Either way, you need absolutely NO CASH!

I have bought many houses this year using the two ways I just told you about. The key is finding the right SELLER. If you have the right seller, this can be done.

These don’t have to be junk houses or distressed sellers either. I have bought many nice properties from people who were motivated by different reasons.

Look for FSBO ads that indicate a serious need to sell. These might say things like, “Relocating”, or “Make Offer”. Mail cards to expired listings in the MLS. Get a friendly agent to provide you with their MLS book and mail out to listings that are soon to expire that have “hot” terms in the listing such as “motivated seller” or “must sell quickly”. Look at the listing to see if the house is vacant. This is usually how I get houses from the MLS. If the house is vacant, it usually means that someone has already moved and is now making two house payments. Couple this with a listing that is coming up on 6 months and you just may have some motivation there.

As I said Jim, there are many ways to buy without ANYONE’S cash. Not even a hard money lender. Start looking at some of these ways and you will buy some houses.

Have a great Christmas everyone!!