Johnboy's post / Advice about 'subject-to' - Posted by Brandon Treat

Posted by Tom – IN on July 25, 2001 at 24:00:37:

It’s real simple. To do subject to, you’ve got to have a motivated seller. Set your marketing up so that the sellers contact you, and a much higher percentage of them will be motivated.
Am working one now where the couple got divorced, the house and loan are in the wife’s name, and she wants to get rid of the house so that she can get married. New husband already had a house in his name. She could care less about the loan.

Johnboy’s post / Advice about ‘subject-to’ - Posted by Brandon Treat

Posted by Brandon Treat on July 24, 2001 at 23:19:42:

Hey Johnboy, or anyone else reading who could answer this, I’m trying to learn as much as I can about creative ways to essentially ‘assume’ mortgages, as actual assumables are basically non-existent now. My situation is pretty common around here, everyone wants to expand their knowledge, but in any case…

In reference to Johnboy?s post @

In a ‘subject-to’ deal, in this one anyway, aren’t most all sellers in this situation who only recently got a new loan, in a hurry to get the last one paid off to improve their active credit risk? Or aren’t most traditional homeowners only going to be comfortable with holding one loan at a time? Or count on the equity from the sale for something, even if it were a small amount? It just seems that situations like these, while I know they do exist, are almost impossible to find…

In my city, and I know everyone will say the exact same thing, but it’s a very hot sellers market even though the properties range from 100-400k. I’ve talked to countless FSBO’s around town and every single owner of a ‘higher class’ home is absolutely put off when I mention a deal that involves anything besides a traditional all cash for them deal.

At this point you may bring up a few statements,

‘Well structure it to where it is an all cash for them deal!’ but that can’t happen, I can’t get a traditional loan, they won’t carry a second, and that’s why I’m wanting to go ‘subject-to’ in the first place.

Or you may say ‘Well go with slightly lower quality homes, perhaps the market in that range is weaker and there will be more motivated sellers’ Tried that too, same thing happens, the sellers either drop their jaws when I mention anything along the lines of seller carrybacks, balk when I talk about creative ways of assuming their loan (since 100 percent of the people I’ve mentioned this to, regardless of price-range have a reason why they need to have their loan absolved) and they tend to get strangely put off when I simply ask about the possibility of lease-optioning their property, as though I had just told them their mother was the ugliest woman in town…

I’ve tried different methods of explaining creative approaches with different people but with the common result of wasting my time.

I guess I’m just wondering… If I am hoping to pull off something like the deal explained in the post prior to this one by Johnboy, is that a one in three hundred seller kind of possibility? Or am I simply in need of more people person skills, or just not explaining enough details?

Wow sorry for the rambling, simply a tad frustrated with seeing so many FSBO’s and houses for sale by local agencies but being unable to do ANYTHING with them due to my lack of knowledge… I?m wanting to pick up effective techniques to potentially profit from these local homes for sale instead of having to resort to looking for junkers in surrounding cities. Of course, I guess I have to ?pay my dues? in those not so attractive areas before I can expect to have the wherewithal to pull off a deal on a 300k property but I?m tired of letting these potential deals slip by.

Brandon Treat

Re: Johnboy’s post / Advice about ‘subject-to’ - Posted by JohnBoy

Posted by JohnBoy on July 25, 2001 at 24:25:11:

The problem is you’re spending to much time looking for houses and looking for FSBO listings when you should be marketing to get the MOTIVATED sellers calling you. Just because you see a FSBO doesn’t mean they must be motivated. Actually, in most cases it’s the opposite. Most FSBO are selling themselves without using a realtor because they don’t want to pay the 6% - 7% commission. If the seller is hung up on trying to save a realtor’s commission then how motivated could they be? Not at all!

In SOME cases there will be sellers trying to sell on there own because they don’t have enough equity in the property to even cover a realtor’s commission. They don’t have the money to come out of pocket to pay any costs. So they try to sell on their own. But trying to find these sellers while having to call on every FSBO listed and to have to keep reading every ad in the papers everyday just to spot a new ad that just came out takes up a lot of time. Reverse all that by getting the ones that are MOTIVATED to call YOU instead!

One thing to remember is that the typical home buyer or seller does not understand any type of creative real estate buying or selling. They typically use a realtor to buy or sell. When that realtor doesn’t sell that home or when that buyer can’t get that loan…that’s where motivation starts to set in. The seller starts getting motivated to sell and the buyer starts getting motivated to buy. In either case they both just want out or in. The seller will just let the property go to get their problem solved and the buyer will gladly pay any price to just get in if you can solve their problem.

Motivated sellers are those that have been trying to sell but haven’t been able to for one reason or another. Or they may be facing foreclosure, or they may be in a divorce situation, or they may have been transferred with their job and need to move on but they don’t want to leave the house empty or deal with renting it out to renters being so far away, or they may have lost their job and can no longer afford the home and need to find something less expensive, or they may have purchased another home and are now stuck with two mortgage payments, or for what ever other reasons they just need to get out from under their mortgage payments.

The buyers just need someone that will sell to them. They can’t get a bank loan or some just “think” they can’t get a bank loan and they only care about two things! How much down and how much per month? If they can afford the payments and have enough to put down in order to let them in, price doesn’t matter to them as much. They just WANT to be able to buy a home!

Your job is to become the “PROBLEM SOLVER!” Instead of thinking in terms of, I’m looking to buy properties, or I want to be an investor, or how do I buy properties with no money, or how do I get financing, etc…

Start thinking in terms of being a “problem solver”. Your job is to find SOLUTIONS to fix someone else’s problems! Your job is to sit down with these people and find out what their problem is. Once you figure out what their real problem is, you now know what they NEED! They all WANT an all cash sale. They WANT full price and WANT someone to just waltz in and buy their home the traditional way. But your job is to find out what they really NEED! Once you find out what their PROBLEM is, then you can determine what their NEED is. Once you know what they really NEED, then your job to get the deal closed is to just come up with the SOLUTION that will get them what they NEED!

You aren’t a real estate investor, you are a PROBLEM SOLVER! You find SOLUTIONS to solve anyone’s PROBLEM! That’s how you make the deals come together!

The best way to find the motivated sellers is to get them to find YOU! You get them to find you by getting the word out that you buy property! Any property, any condition, any price, any time! It doesn’t matter. Just present the property to you and you will figure out a solution to solve the sellers problem to get them what they NEED!

You get a bunch of business cards printed up. Put them out everywhere you go. Hand them out to everyone you meet. Get flyers made up. Post them everywhere you can. Put them in Laundromats, bowling alleys, advertising boards in supermarkets, car washes…put them any where you can put them! Then get some poster signs made up. Post them anywhere you can. Telephone poles. Nail them to a stake in post them on every intersection in town. Let the world know that BRANDON buys houses for CASH! Just give him a call!!!

Eventually people will start calling YOU! Most won’t be motivated, but some will! You want the ones that are motivated. When they call YOU, that’s when you screen them over the phone first and determine their motivation. Then you go visit them and get face to face with them and build a relationship with them. You want them to get comfortable talking to you. They may want to talk about their dog for all you care. Let them! Get comfortable with them. Let them build some trust in talking with you. When ever they talk, you SHUT UP and just LISTEN! Listen to everything they say. The more they talk, the more information they let out. The more info they let out, the more you learn about their PROBLEM. The more you learn about their problem, the more you will be able to find out what they really NEED! Once you got that information you can now figure out a SOLUTION that will SOLVE their PROBLEM by being able to give them what they NEED! Your solution to their problem gets them what they need and you make a profit for your problem solving skills! You’re a PROBLEM SOLVER! You’re the DOCTOR OF SOLUTIONS! DR. BRANDON, the master of problem solving!

Now, get busy and go out there and pick up two deals by the end of the month and then report back with your success story!

You’ll need it for when you get my bill in the mail at the end of the month! :slight_smile: