I’m a beginner investor, have did a couple of transactions when it has came to assignments and bird dogging in the last 2 1/2 years, but now i’m looking to get serious. I like to say of myself being a beginner investor…Little Experience, 3 years and counting of Knowledge, sort of like getting a job after college in the field you studied (okay thats scary, how many people you know actually do get a job in the field they studied in school).
My interest is in sub2.
I want to be one that discloses everything that needs to be to the lender so the lender knows before transfer of title. I also figure I can protect myself and the borrower by adding a clause to contract something of nature…contigient upon lender excepting subject to financing…something like that, the seller of the house could sleep at night, not worried about bank calling loan due with their finances in my hands if bank accepts.
I have the money to make payments, but if the D.O.S.C gets exercised, I don’t want to be responsible for the borrower going into foreclosure (plan would be to refinance so the borrower isn’t on the hook, but that is last minute).
Question Is…For people who let the lender know up front…I guess how do you break the news to the lender and do you tell them to update the loan to include your name/company with the original seller on the loan?
Second…(On the we hide transfer from lender side) I know trust are used…but besides that I have heard instead of a trust, you could just get a second insurance policy on the home being that lenders find out of transfer through change of insurance…What is unclear about this, I hope someone can shed some light on is…If a second policy was in place wouldn’t it still go to the lender or is this second policy just in your name/company?..I ask this because to me it seems that just to have two policies in place if you are going to hide transfer would be the best way to go.
Use the Change of Address section of the payment book whenever
you send the payment(s) in. Replace seller’s with yours.
Easy.
First of all, there’s no reason to use a trust to HIDE ownership when
doing sub2 deals. I know there’s folks lurking about claiming the almighty power of using trusts. Thing is, trusts weren’t created for sub2 deals, even though this is the biggest selling point of why THEY use them.
So no NEED to use a trust. If, however, this is what you want to do, then by all means…go for it.
As far as insurance, your seller’s insurance policy no longer covers YOUR newly bought sub2 house. So yes, it is wise to get your own policy.
Most leave the 1st in place and get the 2nd, others simply cancel the seller’s existing policy and then get their own.
Counsel with your insurance agent for yourself for what YOU should do.
New Problem:
As of doing research today, I called a dozen title companies and all will not touch a subject to unless permission to assume from the lender…Question still stands, how to go about getting permission from lender?..By opinions/experience, would a attorney be better off used to close? Would a attorney close a sub2 deal either though a title company wouldn’t?
The best solution here is ask those that have done sub2 deals
in your area. Do you know of anyone?
Also, some states either require either a title company or an attorney
to close real estate transactions.
Which state do you live in?
But then again, sub2s can be closed “at the kitchen table” as well.
I don’t know anybody as of right now. As far as kitchen table closings go, I believe it can be done…I just want to make sure everything is done legally and above board to the best of knowledge…Especially on my first Sub2 Deal
I did my first sub2 deal yesterday. We went over the paperwork at Starbucks, then went next door to the mail store and had the deed notorized. I then got my own insurance policy and took the deed to the courthouse to be recorded.