Deal Help !!!
O.K. not familiar with this type of transaction. I've only delt with "easy" retail flips so I'm hoping for some help...
FMV=175k
5k in missed payments
110k owed on mortgage, no other liens.
Owner just received some sort of summons yesterday regarding the property.
The home in question is my girlfriends next door neighbor who is down on her luck big time and has two little boys. What I'd like to do is take subject to, have her sign deed and give her moving money and 2-3 months paid in local apt building (I don't want to see the kids with no place to live, but on the other hand I'm not playing the sucker and let her stay in the house with no job) Even if I give these perks I'm still making out just fine. She is in love with my offer.
I do not want to lease option. I will sell it as soon as I have control. Can I do this if I take sub to? I'm not worried about the lender calling it due. I have funds available. How do I structure the perks? In the contact, on the side? How do I dictate when she moves from the property? Day of closing?
Is it as simple as filling out contract and having title co draft deed? Do I have her deed me the property ASAP? or at closing?
I guess I'm hoping someone can put this in a bullet/ timeline style response. I've re- read all my REI books and Ron's course but just seem to be getting more confused. I have a feeling I may have to move fast but make as little mistakes as possible.
Hope someone can help
[addsig]
From what I know you just have her sign a quit claim deed, witch I believe bypasses your normal closing. I have yet to do my first deal, this is just what I have gathered from my reserch.
Hope this helps,
James
I'm assuming you have a subject to contract or have read someone's book on the subject. From what you're telling me, it is pretty strait forward.
Whatever is in your contract that doesn't apply or work for you, delete. Whatever terms you agree upon that aren't in the contract, add.
I would get all of the paperwork signed when you sign the contract, especially the deed. This saves many hassles and helps prevent sellers remorse.
There's really no need for the seller to go to an official closing.
And whatever you do, don't pay any money (except perhaps $10 to make it a valid contract), until you search the title and have possession. Since you are offering her moving money, I would encourage her to leave ASAP (the longer she stays the more it will cost you since you are paying the mortgage).
If you're unsure of everything that is required, you may wish to hire an attorney.
You have to consider transfer tax, state, local, and city; title insurance, my state requires the water bill to be paid before title is transferred, and each state, county, and municipality may have other requirements.
Good Luck.
Melissa
Take the time and make sure there are no other liens. With an FMV of $175,000.00-$110,000.00 mortgage -$5,000.00 back payments-$5,000.00 moving/rent=$55,000.00 potential profit. You may want to hire a moving company to insure she moves on time.
Don't know if FL is a title company state or attorney state (as far as who normally does closings), but I'd recommend that you follow the traditional closing process, especially if this is your first deal. You'll have to pay the closing agent fees (other closing costs would apply anyway), but you'll get the deal done without any foul-ups due to inexperience. You'll also be able to get a title search and title insurance.
All that said, you offer is rather simple. The purchase offer should have the full purchase price stated, which will be the loan balance (verify), plus all late payments, penalties, etc. plus any money that you are giving the seller over this amount. Example: $110 mortgage balance, $5K in fees, $5K to seller = $120K purchase price.
Your offer should state that your taking property "subject to the existing mortgage." It should also state that the seller should be out of the house by the closing date.
You don't want a quit claim deed. You want a general warranty deed or your state's version of it.
Roger
Great insight, Thank You !!!!!
[addsig]
Definitely spend the $300-$500 and get an attorney/title co. to handle it. With that much equity at stake, it's just not worth any screw-ups.
JohnCl