If you have decided that you are ready to get involved in subject-to investing but have been having some difficulty located good sources for subject-to deals, then I have a great “secret” for you. Many of my students and colleagues have found that in the current market, the people I am about to tell you about are one of the best sources for subject-to deals around. Here it is:
Look for landlords in trouble.
If you see a “for rent” sign on a property or notice that the same property has been for let for a month or more, then there is a strong likelihood that the landlord behind it is starting to feel the pressure. When the housing market went down, many investors assumed that the rental market would rise. While this was, in fact, true, many landlords still overbought on rental properties, or invested in homes that seemed like really good deals but were located in failing neighborhoods where people opted not to rent.
While these properties are clearly not meant for the rental market, if you have the time and patience to wait on the market recovery, you can often easily convince a landlord to let empty properties go for simply the cost of taking over the payments. However, you must remember that the same things that make that property an unattractive rental will also make it unattractive to many buyers in the near future. You should either plan to hold onto that property or have a strategy to market it in such a way that it appears more attractive than it currently does under the present owner.
Other times, the landlord will have empty properties because the stress of maintaining and marketing rental properties has gotten overwhelming. When this is the case, you can carefully analyze the local market, and frequently determine that the house is a viable rental property for the right landlord – you. Just make sure that you check out all the things that you would consider if you were buying a home, such as crime rate, schools and neighborhood residency rates. If all these things check out and your landlord’s story appears to back this up, then you may have a situation where you can get a great rental property that has just been neglected on the promotional side.
Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate investing. For more information please visit www.CoachingByPeter.com.
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