ok... "U-Haul" money. So how do you normally come up with the figure? Do you ask the homeowners to give you an estimate of how they think they would need to move out and move in to another place?
My understanding is that the loan stays on them until it is refinanced away. No?
Unless you mean that you are now paying the loan and they were not.
Am I wrong?
Since I use an in house presentation to the buyers, I am able to watch body language, listen to emotional comments made, which in turn helps makes my decision on whether $10 bucks will make the deal or enough for for them to move elsewhere will.
In other words every situation is different, however you must build trust with your seller from the very beginning or you will have a hard time finding out the real reason for them wanting to sell and then how much to offer.
Then key is them convincing you to purchase their property at your price after you have made your analysis of what is fair for all parties.
I feel that the most important aspect of a subjet2 transaction is to Always keep the mortgage payments current and with good funds. The sellers are counting on you to take the financial burden off their backs. They trust you keep the payments current. No matter what, you cannot ever default on someone elses mortgage payments. At the very minimum, they will sue you. Then, things will get worse.
Subject To deals: 500+ Lender Calling Loan Due: 0 Bankruptcy Problem: 0 IRS Placing Lien On Property Deeded To Me: 0 Judge Deeding Property Back To Owner (Tried a few times): 0
He who makes the mortgage payment claims the interest. The old owner is not making the payments so they cannot or let me put it this way should not claim the interest.
Tell you friend to look at LIne on the HUD 1 form that relates to Subject To The Existing Loan, see if she can find it all by herself. She was just guessing at what she related to you and I hope she takes the time to find out how Sub-2 deals are done in a legal and ethical manner by thousands of investors.
I would also point out that the (very well vetted by multiple attorneys) Board of Realtors buy-sell agreement (at least in my area) has a check box in the financing section for "Subject to existing financing", one of four choices (cash, land contract, new mortgage, or subject to exisiting financing).
The presumption is that the lender is going to approve it first, or the offer is invalid.
Maryland Code was amended in 2005 with respect to foreclosure investing. The changes required certain specific disclosures to the defaulting homeowner and forced the foreclosure investor in certain transactions to return 82% of his sale profit to the original seller.
At one time the proposed legislation prohibited lease option or land contract sale of property taken subject to unless the underlying mortgage was first paid in full. Fortunately, this language did not survive to the final reading.
If keeping the foreclosed upon party in the property opens an investor to so much liability then why would you allow them to stay under any circumstance. It seems that requiring them to vacate and re-selling would be a much safer route for the investor. Am I wrong or missing something?
One of the 9 due-on-sale(DOS) exemptions in the Garn-St Germain Act allows the property to be transfered into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property. A Land Trust is simply a variant of an inter vivos(revocable living trust) trusts.
The Land Trust Guru therfore recommend that the "owner" retain a 10% benefical interest in the Land Trust which is relinquished at the disposition of the property for certain nonmonetary considerations. The assignment of the other 90% benefical interest (which never sees the light of day) would be a violation of the DOS if it was discovered by the lender.
get the deed, subj to the short. Sell to a friend or family member with a double close let the previous owner lease it back and you take your margin to the bank and be done with it.
If I understand your question, assumption would seem to be the most str8 forward.
Quote:
On 2008-03-28 11:00, DCL wrote:
Yes the terms are favorable, but assumption should be a strategy. Are you suggesting that should be the first course of action?
Go to the Members Section of this site and do a search, also do a Google search on investors in your area.
You should find what you are looking for.
Good Hunting
axiomonellc,
Glad to meet you.
Once the seller convinces me to buy their house, I give them what I call U-Haul money or moving out money.
John $Cash$ Locke
[addsig]
Thanks for your response...
ok... "U-Haul" money. So how do you normally come up with the figure? Do you ask the homeowners to give you an estimate of how they think they would need to move out and move in to another place?
Thanks again
How does it help their credit?
My understanding is that the loan stays on them until it is refinanced away. No?
Unless you mean that you are now paying the loan and they were not.
Am I wrong?
axiomonellc,
Since I use an in house presentation to the buyers, I am able to watch body language, listen to emotional comments made, which in turn helps makes my decision on whether $10 bucks will make the deal or enough for for them to move elsewhere will.
In other words every situation is different, however you must build trust with your seller from the very beginning or you will have a hard time finding out the real reason for them wanting to sell and then how much to offer.
Then key is them convincing you to purchase their property at your price after you have made your analysis of what is fair for all parties.
John $Cash$ Locke
[addsig]
I feel that the most important aspect of a subjet2 transaction is to Always keep the mortgage payments current and with good funds. The sellers are counting on you to take the financial burden off their backs. They trust you keep the payments current. No matter what, you cannot ever default on someone elses mortgage payments. At the very minimum, they will sue you. Then, things will get worse.
axiomonellc
I like doing $10.00 deals.,
I am not just giving the seller $10.00 for their house, I am actually providing "debt relief" to them.
For example if their mortgage payment is $1500 per month, I am actually saving/giving them $18,000 if you multiply that $1500 over a year.
John (LV)
some investors back home are actually having the seller pay 3 months payments after they move out. Interesting, but it happens.
thelemur,
Glad to meet you.
Subject To deals: 500+ Lender Calling Loan Due: 0 Bankruptcy Problem: 0 IRS Placing Lien On Property Deeded To Me: 0 Judge Deeding Property Back To Owner (Tried a few times): 0
He who makes the mortgage payment claims the interest. The old owner is not making the payments so they cannot or let me put it this way should not claim the interest.
Tell you friend to look at LIne on the HUD 1 form that relates to Subject To The Existing Loan, see if she can find it all by herself. She was just guessing at what she related to you and I hope she takes the time to find out how Sub-2 deals are done in a legal and ethical manner by thousands of investors.
John $Cash$ Locke
I would also point out that the (very well vetted by multiple attorneys) Board of Realtors buy-sell agreement (at least in my area) has a check box in the financing section for "Subject to existing financing", one of four choices (cash, land contract, new mortgage, or subject to exisiting financing).
The presumption is that the lender is going to approve it first, or the offer is invalid.
Chris
NC and TX.
[addsig]
Is anyone able to elaborate on the specifics of the potential NC laws?
What are the details of the MD situation?
[addsig]
Maryland Code was amended in 2005 with respect to foreclosure investing. The changes required certain specific disclosures to the defaulting homeowner and forced the foreclosure investor in certain transactions to return 82% of his sale profit to the original seller.
At one time the proposed legislation prohibited lease option or land contract sale of property taken subject to unless the underlying mortgage was first paid in full. Fortunately, this language did not survive to the final reading.
newkid:
Good distinction between criminal and civil liability!
Just be sure to grab the Deed and have them vacate (which you should do anyway).
[addsig]
If keeping the foreclosed upon party in the property opens an investor to so much liability then why would you allow them to stay under any circumstance. It seems that requiring them to vacate and re-selling would be a much safer route for the investor. Am I wrong or missing something?
jr65
One of the 9 due-on-sale(DOS) exemptions in the Garn-St Germain Act allows the property to be transfered into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property. A Land Trust is simply a variant of an inter vivos(revocable living trust) trusts.
The Land Trust Guru therfore recommend that the "owner" retain a 10% benefical interest in the Land Trust which is relinquished at the disposition of the property for certain nonmonetary considerations. The assignment of the other 90% benefical interest (which never sees the light of day) would be a violation of the DOS if it was discovered by the lender.
How often is the lender requiring full payment after sale?
get the deed, subj to the short. Sell to a friend or family member with a double close let the previous owner lease it back and you take your margin to the bank and be done with it.
Yes the terms are favorable, but assumption should be a strategy. Are you suggesting that should be the first course of action?
If I understand your question, assumption would seem to be the most str8 forward.
Quote:
On 2008-03-28 11:00, DCL wrote:
Yes the terms are favorable, but assumption should be a strategy. Are you suggesting that should be the first course of action?