Things NO ONE Tells You About Subject-To | Real Estate Investing

Things NO ONE Tells You About Subject-To | Real Estate Investing


This video will cover three things that you need to know about subject-to that no one’s telling you. Hey, welcome to my channel if you’re new.
Welcome back if you’re true I’m Dara, real estate investor,
entrepreneur, and consultant out of Atlanta, Georgia and I’m going to jump
right into this video because it’s very important that I get the word out about
this topic here. So, before we get started make sure you subscribe to my channel,
and also be aware that I am not a tax attorney, tax professional, accountant, CPA, or anything or anyone that claims to be. I am just Dara, a real estate investor,
entrepreneur, and consultant out of Atlanta, Georgia. Alright but yeah, so this
is me talking from experience And I just want to share, because subject-to is
one of those subjects– I’m just playing It’s one of those topics that a lot of
investors, when they’re new, hear about it and they’re like, “Oh my gosh, great let’s
do it!” Because it’s no money down It’s sexy, it’s cool. And then a lot of
homeowners hear about it and think, “Scam!” So, I’m here to tell you three things you
need to know about subject-to Whether you’re a homeowner or an investor
interested in pursuing this strategy. First thing is that it’s not a scam. It’s
not a scam; it’s a real, actual way to sell a property or to acquire property
or get rid of a property. So yes, you can sell a property subject to the existing
financing. I’m in Georgia, that’s the only state I’m gonna speak of, but I think a
little birdie told me that a lot of the 50 states in the United States of America,
you can do this strategy too. But speaking only from what I know, what
I’ve done in Georgia, subject-to is an actual, legitimate way to acquire
property. Now, are there people who are scammers out there? Of course. Are there
people who take advantage of others or homeowners who are in vulnerable
situations such as pre foreclosure? Does America start with an A? Right. But just so everybody knows, subject-to is not a scam in its own right; it is a very
legal way to acquire property. Again, I’m not an attorney, don’t claim to be one,
and you should seek the advice of a legal counsel. Now that that’s out the
way, it’s not a scam that was rule number– tip number one, secret number one: it’s
not a scam and can actually be done, let’s get into the real nitty gritty of
this video. So first things first something that nobody ever talks about
when it comes to subject-to is insurance! Now I got a question on one of my videos
about subject-to and the specific deal that I acquired this way, and I was like
“Wait that’s a great question, and you don’t have the answer because nobody
talks about it.” So here I am talking about it. Insurance: who, what, when, where, why, and how? So as you may know, a mortgage is your principal, interest, taxes, and insurance.
So P-I-T-I. P-I-T-I So this last “I” is your insurance. So if you’re taking over
somebody’s mortgage, you’re taking over their mortgage payments, you’re paying
their PITI, you’re also paying insurance. So, the question I got was, “When you take
over subject-to, do you have to get your own insurance policy?” And that’s a great
question my friend, cuz I thought the same thing. I actually went out to some
insurance agents that I know and I’m like, “Hey can you insure this property
for me?” No need, because you’re already paying it, so instead of getting your own
insurance policy, what you should do is have the mortgage holder–the previous
homeowner–add you on to their insurance policy as an additional insured. When it
comes to subject-to, a lot of times you get a lot of backlash, a lot of
negativity, and it’s probably from hearsay or maybe horror stories of
experiences that have gone wrong and the first objection that I think most people
hear, besides being a scam, when it comes to subject-to is, “Oh no, you’re gonna
get caught with the due on sale clause.” Right, now I’m no expert in subject-to
so won’t claim to be, but I do know investors whose sole business model is
on subject-to. So they’ve acquired over 50 properties this way and out of their 50,
zero have been called due on sale. A lot of people lose sleep at night
about this three-word phrase, and the truth of the matter is it’s very unlikely to
be called. Now, I’m not gonna say what causes it or what triggers it; you can
definitely do your own research on that but as far as the payments being made to
the bank, they really just want their payments on time. That’s all. So make sure
you get those payments into them on time it doesn’t matter if it’s coming from
John Doe, the mortgage holder or My Pretty LLC, you know? So just make sure
you pay on time and you really don’t have to worry about the due on sale issue
at all. So this leads me to my next tip being: it doesn’t matter what account is
making those payments as long as those payments are being made. So the bank
isn’t gonna say, “Hmm. John Doe used to pay me every single month, now My Pretty LLC
is paying me. Well who’s My Pretty LLC? Let me go investigate and make sure they
don’t keep paying me on time.” I mean what? I don’t– I don’t really know, but it
doesn’t matter who the money is coming from as long as it’s paid in full–you pay
more, that’s better–and on time. Period. The last and final tip that I want to
share with you guys that nobody else talks about when it comes to subject-to
is good old tax season. Now again, I made that disclaimer in the beginning and I
personally don’t even know much about taxes myself, but this one thing,
you’re gonna need to know. So like I mentioned when you’re paying a mortgage,
you’re paying PITI. That last “I” was insurance, that first “I” is interest. And
if you don’t know, when you pay interest on a mortgage, you can deduct that on
your taxes. So when tax season rolls around, you want to make sure that you
have an agreement along with telling your mortgage holder–the previous seller–
like, “Hey, could you add me to your insurance policy as an additional
insured?” You want to have an agreement with them that “Hey, since I’m making
these payments, which includes the interest, will you allow me to write that
off on my taxes? Will you allow me to add that on my taxes, because you ain’t
getting the benefits of what I’m doing.” You know what I’m saying? I hope that makes sense, just trying to break it down mano-a-mano so everybody can
understand. But yeah so with [interest] you want to have it arranged with the
previous homeowner–the current mortgage holder– that you will be the one to write
off and deduct that interest that’s being paid. So, there it is guys. Now this
is gonna be the one rare video where I do not encourage you to ask me questions
in the comments, because like I said, I’m no way, shape, or form a professional– a
tax professional or an expert. So if you have any further questions or need
clarification, that’s when you call your tax expert, call your real estate
attorney, call your tax attorney, call your CPA or accountant, but don’t call
Dara. But I hope these three tips I shared with you helped. If so, give me
a thumbs up, share this video and subscribe to my channel. Wait! Before you go, read down below in the description box. If you have any other questions
pertaining to real estate wholesaling getting started or getting to that first
deal, go ahead and schedule a one-on-one consultation with me. If you like this
shirt that I’m wearing, let me know and I might mass produce them for all the
pretty little flippers out there. So again, thanks for watching, I will see you
in the next one.

31 thoughts on “Things NO ONE Tells You About Subject-To | Real Estate Investing

  1. I 'm having a difficult time just starting, I used to be a realtor, and leads were much more easier, because people mostly came to you. With wholesaling, it appears to be just the opposite, so what is the best way to get started from your experience?

  2. Good morning Dara!!! I watched your video on business cards a few times over the last few days and I ordered my business cards last night finally get that feeling of commitment starting to take over. Thank you for making it easy to understand. I have about wholesaling regarding people who still have a mortgage on their property. How do you fund that? Do you typically pay mortgage until you find a cash buyer or turn it into a rental to keep the dollars coming in? Forgive the ignorance because you have probably covered this on another video. I want to be prepared for my first deal even if that first deal happens to be a nice house with a healthy mortgage. Have a great day sister!

  3. Dont know why this is in my recommend but you cute 😏

  4. Hey, what's a good email address to send over leads for a possible JV? I do deals primarily in Douglas and Carroll County.

  5. Hi Dara. I hear some investors buying in a land trust for subject to deals. Do you do that also?

  6. Do you provide mentoring?

  7. If you do a subject to. The money to pay somebodies mortgage payment. Is that money that comes out of your own pocket? On your last video the numbers added up to around 300$ dollars a month from renting this house and the mortgage payment was 900$. Sorry I’m just confused wouldn’t that mean you are losing money?

  8. Great video! where can I find a subject-to contract?

  9. OMG get to the point

  10. Hey Dara, I'm an investor-friendly Realtor in Atlanta. Email me, let's chat about some deals [email protected]

  11. Dara, I'm in Atlanta as well, would you consider partnering with me on some projects?

  12. You are so damn fineeee! Damn I want to date you lol

  13. When was your last deal?

  14. shoot im from atlanta im reggie and i just subscribed

  15. Or acquire the property via Subject To (aka: taking over the underlying loan/s) taken into a Land Trust, and also by an LLC or S corporate entity, vs. your own name, preferably in either Nevada or Wyoming (autonomy AND charging order protections) so there isn't a "public recording" of your own name, nor the "asset holdings" disclosed… so it makes it next to impossible for "lawsuit happy" attorneys to then determine what assets you own, it's "within a land trust," and supposedly then next to impossible, to "pierce the corporate veil." I'm not an attorney or lawyer, CPA, etc. either… and learned that from watching Clint Koons videos on YouTube, who IS a RE attorney, in Seattle. And then if you put a "seller financed," or lease option "tenant buyer(s)" in the residence… you DO want to require that they also then get and maintain separate insurance, for that interior space's contents, or more.

    Also if you put the deed / title into a Land Trust, then you can simply get your own separate insurance policy on the home, and put the 'lender' down, as "additionally insured!" Since technically you now "own" the property, irrespective of the lien/s on it, so long as the payments are made, and the debt eventually "paid, in full." (Ron LeGrand, mentions this…)

  16. I watch you all the time and wish I could actually have lunch with you and we could be boss ass friends doing investing

  17. What the most you’ve made on a deal

  18. Sooo pretty

  19. You're really pretty but your video would be stronger if you got to the point quicker!

  20. I'll hit it!

  21. Hi I would like more information on how to wholesale real estate. I am trying to figure out if I should take a course on subject to real estate wholesaling real estate.

  22. I love her voice and her vibe. I can learn up under her all year. Very knowledgeable woman. 🤝🏃

  23. I would so be your friend lol youre funny

  24. I would love to add value to you and to recieve fees back from you on how I take me approach on getting my first deal .. do you have a business email where I can contact you or something in that sort ?

  25. You covered a lot of questions I had!! Thank you! Actually the majority 😂 thanks!

  26. about the “subject to” what if you fix up a place and the owner decides he wants his place back! Can he just take it back or is subject to an actual sale just like “owner financing”

  27. I thought due on sale just meant you gotta pay of the mortgage when you sell.

  28. Thank you dara

  29. Can you wholesale a property from a realtor? Example “realtor brings me a deal before he lists it on the mls”, can I put it under contract and assign it to a cash buyer?

  30. Hi Dara, great video & I love the t-shirt!

  31. Hi Dara, I was wondering if a real estate agent is involved with a Subject to deal, how would we go about managing this? We were only prepared to do a deal with the seller, not the seller and the property manager/realtor. We just called the property manager/realtor to see if we can get an appointment and she said she will get back to us once she reaches out to the owner and tenants. Please help!

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