Can someone please give me a basic functional difference between being on the deed and being on the title as it pertains to Sub2 investing? Thanks!!
My guess is what you are referencing is being on the Deed of Trust. That is the recorded document that secures the promissory note.
Being on the deed would refer to whose has title. That is who has the right to enjoy the benefits, usually occupancy or rental income.
In subject to investing the title by the recording of a deed gives that right to a trustee in trust for a beneficiary. When you control that trust by being the benficiary or control by an agreement with other beneficiaries you don’t have to be on title to enjoy the benefits.
So are you referring to a land trust, whereby title is placed in the trust for the benefit of the those labeled “beneficiaries”? I live in Louisiana. Does that necessarily mean that I have to place properties in a land trust? Can a homeowner sign a warranty deed to myself or my company and I (or my company) can still enjoy the benefits of sub2 investing? I am a bit confused by the methods, but I have a few leads that I don’t want to burn by going at it all wrong.
Example: FMV = 98k
arrears and rehab = 4k
loan balance = 71k
holding/title work = 2k
Can I have homeowner sign deed over for, say 2k and flip to wholesale buyer or owner finance at 7k down and still receive some passive income here in La. I know it is a bit simplified but is this the basis of how it works?
Max
Louisiana has some quirks when dealing with land trusts but not that they are disallowed.
The idea of buying on leverage(subject to) does allow you to flip to another investor or occupant. The question is how much you can get for the equity that is there. There are couses and articles that give the outline of the steps. Leverage is not the best thing for a novice without good information of pitfalls.
Bud, thanks for the reply. I’m stiiiill not getting the answer I’m looking for, so I’ll ask it a different way and hopefully I can get some clarification.
During a sub2 transaction, a homeowner receives a title on the mortgage when they purchase a home. When the title transfers to an investor (me), do they sign a general warranty deed over to the investor (me) thereby transferring rights (not beneficial interest) to the investor while still being on the mortgage? Is the deed the instrument used to transfer rights between a homeowner and an investor. For argument’s sake, let’s assume a land trust is not applicable in this situation. What’s the answer on this one?
Okay, simple answer.
For real property, stickbuilt homes, a deed and a title are ONE AND THE SAME.
There is no difference. When people talk about deed/title, they are (are should be) referring to a ownership transfer contract like a general warranty deed, special warranty deed, or quit claim deed.
If someone signs over a deed, then they have given up all rights of ownership for that property, whether they have a mortgage/deed of trust lien still on the property or not. Benefical interests is a term concerning land trusts, and I’d suggest that you forget about them for the time being.
If Sub2 investing is what you are interested in, then I’d suggest, if you haven’t already, taking the plunge and purchasing a book or course on the subject to get your started. My recommendation would be anything by John Locke. Unfortunately, John’s book version is no longer sold, but you might be able to pick up a used copy someone. If you are a member of your nearest real estate club/association (you should be), someone there might have an old copy that you could borrow.
Roger
Max,
When you do sub2 investing the seller deeds property over to you and you would be protected if that deed conveyance was accomplished via the NARS Equity Holding trust. The seller keeps the loan in place for however long you work out with the seller. Usually the longer the better.
Subject 2 is the method for taking over the property keeping the existing loan in place and the land trust side just is implemented to protect all parties involved in the deal.
The NARS land trust originated by Bill Gatten is a innovative way to acquire a property and also manage the property will full legal recourse. Go to www.landtrust.net for more complete info on his land trust method.
Good luck to ya…