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

---

Why You Need a Lender to Sell Your Home

Home sellers who are prepared to help buyers find financing... Read More

Sell Your Home Without a Realtor and Save Thousand$$$

A typical real estate commission on a $234,000 home (national... Read More

How to Become a Successful Real Estate Developer

Real estate investment and development has never been a more... Read More

The Real Estate Bubble-When Will it Burst?

More and more individuals are realizing that real estate is... Read More

How to Attract Clients in Residential Real Estate

Doesn't it seem like everyone you know has a friend,... Read More

5 Secrets for Surviving a Real Estate Market Downturn

History repeatedly serves to show us that the real estate... Read More

Real Estate Investing with Bad Credit!

By being creative, you can play the game of real... Read More

How Do You Profit From O.P.P.?

In a previous article we introduced you to the concept... Read More

RESPA: The Real Estate Settlement Procedures Act

The Real Estate Settlement Procedures Act (RESPA) is a consumer... Read More

Basic Real Estate Valuation

Given the current interest (dare I say hysteria) associated with... Read More

Chapter One FSBO the Russ Miles thriller/mystery novel

Chapter OneShe reached the phone on its second ring. "This... Read More

Is It Wise to Take My Home Off the Market for the Holidays?

Let's say you've had your home on the market for... Read More

One Stop Shop for Buy to Let

As the buy to let market continues to go from... Read More

Spanish Estate Agents and Inspection Visits

The only way to buy a home in Spain is... Read More

Jacksonville Real Estate Listings

With over 30,000 residents, Jacksonville in central Arkansas is a... 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

Pricing your House to Sell

Most Sellers set their initial asking price at an amount... Read More

The Bubble Effect

Turn on the TV at almost any time day or... Read More

Five Ps of Selling Houses

1. Planning:Know Your Target BuyersThink about your neighborhood and the... Read More

Reinventing Real Estate, Part 1: Online and Empowered Consumers Are Taking Charge and Paying Less

For decades, the real estate world turned in a predictable... Read More

Should you Sell your Home yourself?

Should you sell your home yourself? Yes and no. Yes,... Read More

Selling Your Home ? Alone or with a Broker?

How do you decide whether to sell your home (or... Read More

How To Get Top Dollar For Your Home ? Fast

1. Time is money when selling your homeAfter you've made... Read More

Do You Need to Download a Landlord Inventory On-Line Today?

Do you need to download a Landlord Inventory on-line now?... Read More

What is a Predatory Lender?

Several months ago, the 3,000-member California Association of Mortgage Brokers... Read More

Cashing Out of Preforeclosures - Exit Strategies for Maximum Profit

One of the quickest ways to real estate profits is... Read More

10 Home Purchase Abroad Tips For Success

Are you seeking your little corner of sun drenched heaven... Read More

Relocation Humor: Why I Bought A House

The Rental Experience in South FloridaReaders: This is based on... Read More

Investing In Commercial Property

Why commercial property?Compared to residential property investments, commercial property offers... Read More

4 Simple Tests To Find Good Real Estate Investment Properties

You're driving along the road when you spot it. There... Read More

Should You Buy a House or a Condo?

A big debate these days is whether or not to... Read More

Real Estate Marketing, Do You Use Direct Mail?

Prospecting for leads is by far the most difficult part... Read More

Subdividing - But NOT Land!

Many people are familiar with the concept of sub-dividing a... Read More