How Do You Buy A House Assuming Existing Financing?
Help! Advice appreciated. I've bought several properties as investments - always using conventional financing. I was approached by a Realtor I've bought several houses from in Oregon about buying a house from another client of his. There isn't much, if any, equity, but the idea of "taking over" the property through a quit claim deed seems like a good idea to me....she has a good loan on the property (bought for 100% financing). I'm sure this can be done - my concern is the bank calling the note due on the "due on sale clause". What if she quit claim's the property over to me and I start making the payments? Do I need to get separate insurance - to avoid the bank knowing the property changed hands (currently impounded)? What about the 1099 at the end of the year - wouldn't it be sent to the wrong address/owner? ....will someone who has done this before please provide some insight? I think this is a good deal...just not sure how to make sure I don't screw it up.
bsmith92679--(CA)------------
You probably should look for the appropriate forum for this question. You have posted it on a forum devoted to investing in delinquent property tax deeds and tax liens. You should get a better response if you look for a different part of this website.
Good Investing***********Ron Starr***********
Ron:
1) Don't use a quit-claim, use a grant deed (or warranty deed, depending on your state). NEVER take title with only a quit claim.
2) Get letters from her notifying the bank that you are a "property manager", and make sure that they have ALL correspondence sent to you.
3) Keep copies of all these letters, because if the bank changes servicing companies you'll have to send them all in again. Any authorizations will be lost.
4) You're not trying to keep the bank from knowing that the property has changed hands. Believe me, they will find out. Just make sure that you don't rub in in their face. Then, keep the loan current, and if they call it due, REFUSE TO PAY IT OFF and just keep sending in the monthly payments. Once they find out they can't bully you into taking over the loans, they'll shut up.