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.

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

MORE RESOURCES:

Leading Real Estate Company Announces Over $1 Billion in New ... - MarketWatch

Realtors Say Foreigners Hold Key to Real Estate Revival - FOXNews

Real Estate Market Slumps, Showhomes Soars - MarketWatch

Investment Regimes for Indian Real Estate Sector Explored - MarketWatch

Moody#39;s: Commercial real estate prices rise - CNNMoney.com

Winston amp; Strawn Continues Growth; Adds 19 Litigation, Corporate ... - MarketWatch

Architects see drop in real estate design contracts - Los Angeles Times

Target shareholder revises real estate proposal - The Associated Press

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://news.google.com/news/url?sa=Tct=us/7i-0fd=Rurl=http://www.reuters.com/article/hotStocksNews/idUSTRE4AI5MH20081119cid=1271977767ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNGZ9W8DqUyLhQL3vltfmHN_ksUYHwimg src=http://news.google.com/news?imgefp=XVuA8yiQ2LIJimgurl=www.reuters.com/resources/r/%3Fm%3D02%26d%3D20081119%26t%3D2%26i%3D6876351%26w%3D192%26r%3D2008-11-19T193234Z_01_BTRE4AI1BTF00_RTROPTP_0_TARGET width=80 height=50 alt= border=1brfont size=-2Reuters/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/7-0fd=Rurl=http://www.google.com/hostednews/ap/article/ALeqM5izZJX0Q9xiHBM5Mg3-Ee1B6sI8wQD94I9R8O0cid=1271977767ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNGpHltds2Vwx1HpjWoISTmeiUqfegTarget shareholder revises breal estate/b proposal/abrfont size=-1font color=#6f6f6fThe Associated Pressnbsp;-/font nobr12 hours ago/nobr/fontbrfont size=-1Ackman unveiled a plan last month that involves creating a breal estate/b investment trust that would take ownership of the land Target owns underneath its b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/7-1fd=Rurl=http://www.bizjournals.com/twincities/stories/2008/11/17/daily25.htmlcid=1271977767ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNEbOkCr-mtxHQcuHLhT4NcyWutHtwPershing revises Target land spin-off proposal/a font size=-1 color=#6f6f6fnobrBizjournals.com/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/7-2fd=Rurl=http://www.reuters.com/article/americasDealsNews/idUSTRE4AH7PD20081118cid=1271977767ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNESOpRYyYq5MzcpDe0K-5OqwbpQRQPershing#39;s revised Target proposal out Wednesday/a font size=-1 color=#6f6f6fnobrReuters/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/7-3fd=Rurl=http://blogs.reuters.com/reuters-dealzone/2008/11/19/troubled-retailerackman-5-bln-reit-ipo/cid=1271977767ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNGPlY8ihN6kcB44RZkwvj2d4C0kOwTroubled retailer+Ackman= $5 bln REIT IPO?/a font size=-1 color=#6f6f6fnobrReuters UK/nobr/font/fontbrfont size=-1 class=pa href=http://news.google.com/news/url?sa=Tct=us/7-4fd=Rurl=http://www.guardian.co.uk/business/feedarticle/8044333cid=1271977767ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNE5FVkg9ITT9QkSSjmPHnenrl1-rwnobrguardian.co.uk/nobr/anbsp;- a href=http://news.google.com/news/url?sa=Tct=us/7-5fd=Rurl=http://leapsinvestor.com/market-news/ackman-target-shares-worth-37share-726/cid=1271977767ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNF_QDSu95pSBS77W24IPxcHowj2TAnobrLEAPSInvestor.com/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1271977767hl=ennobrall 131 news articles/nobr/a/font/div/font/td/tr/table

Real Estate Journalists Award NAREE Bivins Fellowships and ... - MarketWatch

Commercial Real Estate Debt Index Plummets - Wall Street Journal

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/9-0fd=Rurl=http://online.wsj.com/article/SB122703851606838297.html%3Fmod%3Dgooglenews_wsjcid=1271977795ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNHUb24_4d-6injIQo8_9hR5ps1Z1QCommercial bReal Estate/b Debt Index Plummets/abrfont size=-1font color=#6f6f6fWall Street Journalnbsp;-/font nobrNov 18, 2008/nobr/fontbrfont size=-1By PRABHA NATARAJAN WASHINGTON -- A commercial breal estate/b debt index plummeted Tuesday after a Credit Suisse research report warned that two loans included b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/9-1fd=Rurl=http://www.reuters.com/article/bondsNews/idUSN1933428520081119cid=1271977795ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNHSiShT-y7laJSNn8nA6nZMuqVrCwUPDATE 1-Economy, TARP conspire against commercial mortgages/a font size=-1 color=#6f6f6fnobrReuters/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/9-2fd=Rurl=http://www.bloomberg.com/apps/news%3Fpid%3D20601087%26sid%3Da7v3wNC8x9WA%26refer%3Dhomecid=1271977795ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNH1r9T5R-iv4R1spQ4JfAk_l4G43AWestin, Promenade Commercial Mortgages Near Default (Update2)/a font size=-1 color=#6f6f6fnobrBloomberg/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/9-3fd=Rurl=http://www.reuters.com/article/marketsNews/idUSN1826572220081118cid=1271977795ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNGHWFpwS27ONpxxbB8-TeoQbawtWgUPDATE 1-Big CMBS loans seen near default, index yields soar/a font size=-1 color=#6f6f6fnobrReuters/nobr/font/fontbrfont size=-1 class=pa href=http://news.google.com/news/url?sa=Tct=us/9-4fd=Rurl=http://online.wsj.com/article/SB122703851606838297.html%3Fmod%3Dspecial_page_campaign2008_mostpopcid=1271977795ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNFnqnEdvMLGicEmyH64PO2aXhx_mwnobrWall Street Journal/nobr/anbsp;- a href=http://news.google.com/news/url?sa=Tct=us/9-5fd=Rurl=http://www.bloomberg.com/apps/news%3Fpid%3D20601087%26sid%3Da0GR3cE_UyEE%26refer%3Dhomecid=1271977795ei=jk8lSb2oBJzI8AT_1b25AQusg=AFQjCNGy1p4HDQhvhv8E4EBsiKvNZJJoDwnobrBloomberg/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1271977795hl=ennobrall 31 news articles/nobr/a/font/div/font/td/tr/table

Real-Estate - Google News

RELATED ARTICLES

Dont Buy Ugly Houses!
Ugly houses can be great investments, but we don't buy them. We understand that there are lots of valid ways to make money investing in real estate.

How to Get the Best Price for Your House
The best price to sell your home is always determined by how you compare against your competition, the house down the street. If your property looks better than the next guy's the customer will buy yours.

Investment Property Part I: How Not to Become a Slumlord
After riding the ups and downs of the stock market roller coaster for a while, an increasing number of investors are looking into property investment as a more stable alternative. With hot markets in many parts of the United States, the time may be ripe for you to get into this potentially lucrative trade.

What to Look Out For When Buying Off Plan
Buying Off PlanIt can be difficult to decide when every deal seems to be not to be missed!There are some key things I look for when buying off plan, whether it's in the UK or abroad it makes no difference.The property must be good value now ie it compares favourably with similar properties today, and is not based on properties going up in value 10% each of next 2-3 years.

Dealing With Difficult Tenants
When managing residential properties one bad tenant can often undo the good work that one hundred excellent ones may have achieved. A bad tenant is a bad tenant regardless of whether they are in the West Riding, Western Australia, Westchester, Wanganui or the Western Isles.

Selling Your Home: The Power of a Great Sales Flyer
Even though its importance is often overlooked, a great sales flyer is one of the most effective tools for selling your house. Whether your home is listed with an agent or not, make sure that you have a dazzling flyer.

Property Types A, B, C And D
One of the biggest problems individuals just starting out have is the type of property they look for, and working outside their immediate area. One of the constants around the country and for every state, is that there are the most desirable areas to live and the least desirable; and then those that fall in between.

The Echo Boomers - The Next Big Consumers
The Echo Boomers or Generation Y currently make up about one third of the US Population. Many of the Echo Boomers are starting to reach an age where they want and need things like, Houses, Cars, Insurance.

Buying a Vacation Home
You'd like to buy a vacation home, but you're not sure where to begin. Perhaps the single most important point to determine up front is why you are buying a vacation home.

Types Of Real Estate - An Investors Choice
There are different types of real estate, and different ways to invest in them. Which way is best is for you to decide, according to your particular needs.

Before You Buy A House - Top 10 Tips
There are serveral things you need to think about and check on before you buy a house. Even looking at so many houses can be confusing.

Setting Goals for Real Estate Success
The power of goal setting has been well documented and communicated so before you skip over this point because you've heard it all before I'd like you to consider how well you are doing it. I'm a firm believer that you don't truly understand something until you are doing it.

Investment Real Estate: An Inexpensive Way To Get Started
If you are considering getting involved in investment real estate, let me offer some of the amazing information available in my wealth-building system, Winning the Mortgage Game. In several parts of my system, I outline a strategy for getting started in investing in real estate, without being a landlord.

Home Hunting and the Internet
So, it's home hunting time. Where do you start? Who do you contact? Well, home hunting has been made much easier with the advent of the Internet.

Be A Realtor With Curb Appeal
Are you a realtor with curb appeal or are you more of a fixer-upper needful of updating?How you present yourself to colleagues, buyers and sellers, from the very first moment, will influence your sales records as well as the confidence and satisfaction your new clients feel. Even if you're a Realtor in demand, with more listings than hours in a week, you may well find areas that you can polish.

Mechanics Lien on Your House
In many places you can buy a house and a contractor can put a lien on it within 90 days of construction or delivery of materials. For example if a contractor fails to pay a subcontractor he/she can place a lien against your real estate.

When is the Best Time to Move?
As Realtors, we are often asked, "When is the best season to move?" This is a tough question, one we cannot answer for you. Most people are asking about price, do they fluctuate throughout the year? NO.

If You are Hiring a Neighborhood Specialist to Sell Your Home, there are Some Things You Absolutely
My husband and I were eating breakfast at the Good Egg the other morning and couldn't help but over hear a fellow talking to his elderly parents about their home. It was fairly obvious that his father had a hard time hearing and the louder he talked the more I was tuning in to what he was saying.

What is Tax-Deferred Exchange?
Under Section 1031 of the Internal Revenue Code, owners of real estate held for investment or use in a trade or business can swap their property tax-free for "like-kind" real estate.Exchanges are made for people wanting to stay invested in real estate, increase their leverage and to avoid paying hefty taxes upon the sale of property.

Notify Them When Youre Moving
One of your first steps, when you're getting ready to move, is to pick up a stack of change-of-address cards from the post office. Yes, old-fashioned go-by-snail post cards! You'll want to notify everyone in your address book and also.