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$50,000 Equity in "Subject To" Deal

by Derek Pierce   

I just wanted to tell you about the deal that I got yesterday. A motivated seller has a house in great area in my community.

Value of home: $130,000
Mortgage Balance: $78,000
Monthly Payment: $ 847.00

Seller is $2,800 behind in back payments. I offer to make up the back payments, pay her $1,000 deposit for her new house, pay one month for her new house ($1,000), pay for her moving expenses, and pay $1,200 for the overdue payments for her power and gas bill. She takes my offer. We are closing tomorrow.

So I get a $130,000 house "subject to" with a balance of $78,000. I am out $6,300 up front, but I have a house with $50,000 in equity. The only work that I will have to do is new carpet and paint. My exit strategy will be to retail it just under market value around $120,000 to $125,000. I just wanted to share this with you.

 
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