Subject To Steps

sharonmp profile photo

Where can you get the steps to doing a subject to

Comments(8)

  • JohnLocke22nd June, 2008

    Sharon,

    Here are the steps...

    http://www.thecreativeinvestor.com/modules.php?name=Articles&file=article&articleid=146

    John $Cash$ Locke
    [addsig]

  • mustbuytosell24th September, 2008

    Quote:
    On 2008-06-22 16:12, sharonmp wrote:
    Where can you get the steps to doing a subject to


    Hi sharonmp, you asked the exact same question I was going to ask. I took control of a property about a year ago using a lease option, and at the time there was $50,000 in equity. It was worth $220K and I Lease optioned it for $170K. The house is now worth about $180K ;(. I was not comfortable making the payments for a couple of months hoping that it will sell/lease when the property has so little equity left in it. The seller agreed to work with me, since we both have something to loose, and I have been marketing the property for the last month. I told the owner that we should consider the possibility of selling the house subject to and he agreed. Now I have an interested buyer, who wants to do subject to and need clarification on how to do it. Everything I have read on Subject to lacks fluidity. In other words, there is not a clear cut procedure...and it helps me to see things in order as a sequence or procedure. My major confustion starts when it comes to re-seling the house using subject to.

    This is what I have for buying subject to, hopefully it is okay that I post it as I can sympathize with you and want to help. Hopefully others will provide more confirmation/clarification on what I provide:
    1. Find the seller and convince them to sell you the house Sub 2.
    2. Get them to fill out a Purchase and Sale Agreement
    (still not sure where to find a reliable contract)
    4. Have them sign a Subject To Addendum, which makes them acknowledge the loan stays in their name, that you make no promises, and that your role as a buyer is intended to make a profit, and not to claim the interest on the loan on their taxes.
    5. If paying more than the loan, have the title company create a note for the wrap mortgage or sencond mortgage.
    5. Have them Seller put the house in a land Trust, with you as Trustee
    3. Have them deed the house to the Trustee (you or your company)
    4. Have them assign all beneficial interest to you.
    5. Have them sign a Limited Power of Attorney
    6. Create and Affidavit of Memorandum concerning the Trust Agreement.
    >>>>This is where most of what I read lacks fluidity, inadequately explaining the process with respect to the roles of the investor and title company<<<<
    7. Have the title company record the Warantee Deed to Trustee, Affidavit Concerning Land Trust, and loan documents; while you the investor keeps the Land Trust Agreement, Assignment of Beneficial Interest, and Limited Power of Attorney in a safe place.
    8. I have read disenting opinions on whether or not to notify the lender with a polite letter. However, if you plan to use a loan servicing company then you will probably want to have the seller mail a letter to the bank, to have them send statments to the Loan Servicing Company, or contact the bank yourself as the Trustee of the property. Thoughts?
    9. Use the limited power of Attorney to change beneficiary on insurance policy.
    10. Re-Sell the property===>This is where I get really confused.

  • rei0425th September, 2008

    no no and no.

    NONE of the land trust is ever recorded. The only thing that ever gets recorded is the DEED TO TRUST. If you quit claim the property you are quit claiming it to "joe as trustee" and the trust is help in escrow. The point of the trust is to hide who the beneficiarys are so why would you ever record it?

    Its pretty simple.

    have them deed the property into a trust, you are ben. and your business as trustee, make up the backpayments if any and start making payment to their mortgage company. you know own the property and they hold the note. Now you can sell at anytime and pay off their note or "refi". Its very simple. Dont over think this process.

    -Brian

  • northwest0121st February, 2009

    hey i was told you do not need to use a tust with your sub two As well you use a warranty deed to put the property in your name or your corporations

    True?

  • JohnLocke21st February, 2009

    northwest01,

    Glad to meet you.

    True...

    John $Cash$ Locke
    [addsig]

  • northwest0121st February, 2009

    JOHN

    Thank you

    Hey how hard are things to get people now facing foreclouser to sell to you on sub 2 ?

    And any thoughts as to what to say to make them sell to you ?

    After all if they do not they are going to be out of home/house any way

  • northwest0122nd February, 2009

    JOHN

    But you can use it to buy foreclousers right ?

    What extra would you do in useing to to get these properties that would cover you backside better?

  • NewKidInTown322nd February, 2009

    In your scenario, if this property is to be used to secure the PML, the PML will be in second place, not first. The existing mortgage is already in first place.

    What do the cash flows look like? You did not tell us what the interest rate is for the existing mortgage.

    Tenant/buyers only pay rent until they exercise their option. How much rent are you planning to charge for the three years of the lease portion of the lease option agreement?

Add Comment

Login To Comment