How To Secure Investor
Hi Everybody,
I'm quite sure us newbies keep you pro's on your toes with all of our questions. Thanks for all the great information that you guys share with us.
Here's my question. When I find a sub2 deal with a seller that's in forclosure, once I get the property under contract and I need to bring in an investor to put the money up to do the deal, how does he/she protect their interest in the property and how do I make sure that I get my split once we sell the place?
Thanks ahead of time for your replies.
Cashmoney2
1. With a subject-2 you should need very little money so you may find you never need an investor. You are also not looking for a fast sale in all cases (tenant buyer would be there for a period before the a sale pays off the prior owner's loan).
2. If you are buying subject-2 and putting the home into a trust that helps mask the transfer from the lender then you can use the trust to indicate the relative ownership and protect the investor.
3. Alternatively in almost any deal you could put the investor as the owner (or beneficial owner of the trust) with you holding an option to buy it at a discount. You would exercise your option just prior to any sale or sell the option back so that you are cashed out for your share.
When using a trust, etc check with a lawyer to get the details correct for your state.
John
[addsig]
SUBJECT TO: is when the seller tranfers ownership to the buyer by using a contract called a deed. The seller leaves his/her loan in place. You make the payments to the bank. After purchasing subto you can do what ever you want with the property. I think the most popular is to lease option it out or contract for deed it out at a higer price than you paid.