Don't Do Sub-To...Do THIS Instead!
The video discusses two real estate investment strategies: subject to financing and the Burr strategy. Subject to financing involves taking over someone else's loan and becoming the owner of the asset while the loan remains in the original owner's name. This strategy allows for paying more for a property and does not require good credit or cash. However, it comes with risks, such as relying on the seller to make loan payments and may not work for all distressed properties. On the other hand, the Burr strategy involves buying distressed properties using other people's money, rehabilitating them, and then refinancing them. This strategy allows for generating rental income and building equity in properties. It requires more steps and complexity but offers the advantage of attracting higher-quality tenants. The video highlights that subject to financing may have fewer opportunities compared to traditional Burr deals or buying distressed properties with cash. Trust from the seller is crucial in subject to financing, as they are still responsible for the loan. Additionally, subject to financing may lack equity, making it risky in a market downturn. The speaker in the video prefers the Burr strategy due to its potential for acquiring fixed-up properties with less cost and maintenance issues. They claim that the Burr strategy is not complicated and can be simplified with certain hacks. They suggest partnering with someone with good credit to overcome the initial need for personal credit. The speaker concludes that both strategies have their merits, but the Burr strategy, with its focus on buying distressed properties and creating equity, is a solid foundation for financial success in real estate investing.