Real Estate Investing: Beware of Subject To Promises

Another real estate writer's mini course, full of promises and fluff, ended with a "lesson" on why you need to buy his book so you can finance multiple properties "subject to." The reason, he said, "because banks won't let you finance more than ten mortgages."

This simply isn't true.

First, banks let you finance as many mortgages as you can pay for. Some banks limit the number of loans made to one person. Experienced real estate investors just move on to another lending institution.

I know one investor who owns more than one hundred single family homes. All have mortgages. He constantly refinances one rental for the down payment to buy the next. Besides living off the cash flow from his rentals, he also refinances a rental occasionally to take his family on a first-class vacation.

Another investor, my friend who owns the carpet company we use for our fixers, owns more than fifty rentals. None were purchased "subject to" the existing loan. Many were purchased "all cash" for quick closings, with mortgages added later.

For beginning real estate investors, looking for an owner willing to sell their property "subject to" the existing loan adds a frustrating component to the search for a profitable property. Today's savvy home sellers just won't sell to a buyer who can't cash them out.

Of course, some investors offer "subject to" and lease-option purchases. But, properties with most of the equity stripped out come with payments too high for rental income to support. These properties make better candidates for owner-occupant home buyers with poor credit who don't mind paying more for a house.

Beware of "subject to" seminars, books, and promotions. This real estate investing method worked last century.

Copyright (c) 2005 Jeanette J. Fisher. All Rights Reserved.

Jeanette Fisher teaches real estate investing and credit college courses. She became a credit expert to help her real estate students buy their dream home and multiple investment properties. Jeanette is the author of "Credit Help! Get the Credit You Need to Buy Real Estate" and other books. For a free report, "Credit Tips for Mortgage Financing," visit the Real Estate Credit Help Center http://recredithelp.com

---

Selling Your Home - A FSBOs Guide to Keeping It Safe

Sellers need to keep their safety in mind when prospecting... Read More

Investing in Residential Real Estate: Achieving Positive Cash Flow

When investing in real estate, it is highly desirable to... Read More

Follow-Up - The Key To Successful Closings

If everyone always did everything they said they'd do, we'd... Read More

Why Are Mortgage Notes Discounted Anyway?

When real estate note brokers purchase partially paid notes, they... Read More

Personal Branding Techniques for Real Estate Agents and Brokers

Branding can be done to any product, or any person.... Read More

Using Transformation Psychology to Sell Investment Properties

Satisfying and lucrative real estate investment depends upon your correct... Read More

Investing in the Baltic Tiger: What Has Estonia Got to Offer?

Estonia's reputation is growing within the property investment market. Rising... Read More

Curb Appeal

First impressions do make a difference when selling your home.... Read More

Making a First Impression When Selling Your Home

So you've decided to take advantage of the booming real... Read More

What Is Home Staging And How Does It Help To Sell My House

Home staging is the concept of preparing a house for... Read More

Real Estate: Buyers Agent, Sellers Agent & Dual Agent (defined and explained)

There is a relatively new and not always well understood... Read More

Selling Property - Valuing Your Property

Selling property privately has many advantages over using an estate... Read More

Mancos Real Estate

Real estate: availability and costIn 2000, the median home value... Read More

Safe, Scenic & Secure Sussex County Delaware

As I write this, there is a considerable concern about... Read More

Finding Structural Problems During Escrow ? Small Rural Home Example

In rural home purchases, the transaction is often subject to... Read More

Do You Have the Correct Home Buyer Mindset to be Buying a Home?

By learning what you need to know and preparing how... Read More

Investing in Real Estate & REITs

Real estate investing runs the gamut in terms of risk... Read More

Residential Income Property Financing: Part 2 of 3

Welcome to the second segment of a three-part series about... Read More

Buying a Vacation Home

You'd like to buy a vacation home, but you're not... Read More

Buying Foreclosures - Knowing Why Helps You Buy

One big potential deal-killer in buying foreclosures is the homeowner.... Read More

San Diego Real Estate

San Diego is home to millions of beautiful apartments, condominiums,... Read More

Golf and Waterfront Living: Live, Play, Relax

With today's planned lifestyle communities, golf and boating enthusiasts have... Read More

Hiring A Contractor - 10 Mistakes To Avoid

A very smart attorney I know paid $7,000 for a... Read More

11 Different Ways to Participate in The New Millennium Real State Boom

Many parts of the country are going through a real... Read More

Where Does Your Real Estate Commission Fee Go - Why is The Commission so HIGH?

Many who have bought and sold properties through Realtors numerous... Read More

Choosing a Realtor

Purchasing a property, either as an investor or as a... Read More

Real Estate Investing - So You Want to be a Landlord!

Is landlording the way to go if you are starting... Read More

Selling Your Home Quickly, Even if You Have No Money For Repairs

Do you need to sell your home quickly? If so,... Read More

A Possible Bargain: Foreclosed Properties

In the superheated San Francisco Bay Area property market, foreclosed... Read More

Questions Investors Should Ask When Buying and Selling Investment Property

If you're a real estate investor, here are several questions... Read More

Selling a House is Easy

The thought of selling a house strikes fear into most... Read More

Real Estate Investing Skill Acquisition

Real estate investing is not in any list of high... Read More

Sellers, Are You Having A Hard Time Selling Your Home?

Sue and Chuck DeFiore have the perfect solution for you... Read More