Quit Claim Deed
I've talked to some investors in my area that do quit claim deeds for preforeclosure sales. However, my attorney (primarily a BK attorney) has told me that it is too risky. If he files for BK the title is jepardized. His name is still on the title and any creditors could go after the property. What are your experiences? It sure seems easier than Sub 2.
maggyldy,
What seems easier than subject to? I don't see a question here.
If the deed is quit claimed to you then you own the property, and you have just transacted a subject to deal.
Your attorney is incorrect if the seller quit claims the property prior to the BK the buyer owns the property and is on title.
Now as how to make sure you are in a position using various methods such as "homestead exemptions" affordable to cancel out any equity the seller may have and could exempt up to a certain amount of equity from the BK court, this is on a state to state basis.
By the way quit claims are not a good way to transfer property from a seller to a buyer, you should use or get a Warranty Deed or other sate specific device. Ask a title company or attorney which one they will accept.
John $Cash$ Locke
Thanks John. I plan on getting your full course as soon as I can afford it. Maybe then my questions won't be so simplistic. Thanks for your patients!!!
maggyldy,
This is how we learn by asking questions, I see you are trying to gather information or more aptly put searching for the Holy Grail of creative investing, which will not be found by listening to the "I heard from so and so or someone said."
At this point it can be confusing, watch out for "information overload" would be my best advice for you at this time.
John $Cash$ Locke
[addsig]
I agree completely. My problem is cash flow right now, which is why I'm finally trying to fulfill my dreams in REI. Consequently, I can't afford your course at this time. Also, I'm looking at a house close to foreclosure that no one else has sniffed out yet. I feel them right around the corner. FMV 205+, jgmt 150, 2nd lien20k (but hoping to negotiate down). Perfect condition. Guy still doesn't have a job, so minimal chance of some last minute miracles. Except me, of course. I just need to go in there with contract and I can't see how he's going to be able to pass it up as the sheriff's sale approaches (8/5). There's a few other's, but this one is so clean that I can taste it. It would be a great one to start with.....great neighborhood, houses are moving very quickly, completely finished basement, freshly painted, beautiful.
maggyldy,
It is not a requirement that anyone who needs help have my course, I have helped many who don't.
You could but this under contract, put the deal here on TCI in the properties section, but you are limited on time so you will need to move on this on.
Talk to the seller explain you will try and help him, part of helping him is to give you an option on the property, even if you have to partner on this deal it will get you started in the right direction.
John $Cash$ Locke
[addsig]
John, what happens to the second lien? Will they negotiate with me? If it goes to sheriff's sale and sells at 70k, don't they get their 20k? So, why would they deal with me before the sale? By the way, I just got approved on a HELOC for 78k. So, I do have money to work with with that is complete. Thanks for your guidence!!! I can't tell you how much I've learned just being on this site in the past week or so. I'm really looking forward to having a good grasp on this whole thing.
maggyldy,
If you now have a HELOC then consider buying John's course.
John said to get the deal under contract. Agree terms with the seller and have him sign a contract. Control the property before another investor shows up.
If you get John's course and then work the numbers for a subject to deal you have plenty of funds available to do the deal (using the HELOC).
Make sure you have your numbers correct. The other side of a subject to deal is finding the next buyer who will provide you with a lump sum and some cash monthly. So, you need a deal when buying that you know you can turn around and 'sell' to another (retail) buyer.
As presented the numbers appear to work. Time to get busy.
BTW - The idea with the HELOC is to use it as working capital. Get the home and then retail it back out so that you get back all the funds you invested.
John
[addsig]
It sounds like a plan to me. Who do you suggest I go to to help me write up this contracct?....lawyer or broker? And, what about that 2nd lien? No answer there yet.