2020 is bringing its own set of unique challenges to the real estate market. What’s the best investment strategy to use to get started and grow your portfolio now?
Factors Impacting Real Estate Investors in 2020
- Temporary price drops in some markets
- Rising number of properties with negative equity
- Properties with tax liens
- Uncertainty over 2020 election
- Lenders and borrowers wary of long term mortgage commitments
- Investors limited on number of deals by cash on hand and outside financing
Overall the economy may be in good shape and the housing market too. Yet, every year there are thousands if not millions of property owners in some form of distress. As an investor, you can help in all of these scenarios using creative financing and deal structuring. Having survived several major downturns and full market cycles over the last 23 years, subject-to deals have proven to be highly valuable and one of the best real estate strategies to make money during these times.
Whether we see the bull run continue through 2020 and things just get more expensive or there is a recession, subject-to deals can be one of your best tools.
The Advantages Of Subject-To Real Estate Deals
- Turn more leads into money making deals
- Buy properties with lower costs, and less time and energy
- No personal cash or credit needed
- Make money on low and negative equity homes
- Avoid the pain of maintenance and rehabbing
- Faster closings
- Highest cash on cash returns
Put simply, a subject-to deal means you are taking over the payments on a property, and are buying subject to any existing debt and liens. You don’t have to pay off their mortgage at closing. You don’t need to qualify for financing.
You can keep these properties to rehab and flip or rent out for cash flow, or you can turn around and lease option or seller finance them to a new end buyer. You can even use their money to take down the deal, earning you an upfront lump sum, ongoing cash flow, and another payment on the back end. You can get paid three ways, without a dime out of your pocket.
