Hey everyone, I am trying to finish up my first sub-2 deal…actually my first ever REI deal. My question is what forms are used in a sub-2 deal? Quit claim deed? warranty deed? Any suggestions would be very beneficial!
Do not use a quit claim. Use a warranty deed if the seller will. If not then the seller is an attorney or something unusual is happening. You could use a note and deed of trust to wrap the existing financing or just mention in the deed that you are buying the property subject to the existing financing and ad the recording information to the warranty deed. If you want to set up the fancy trust etc you will need the trust documents and deed the property to the trust.
You may want to get POA from the sellers or some kind of letter giving you authority to deal with the mortgage company. A management agreement works well also.
Thanks for the response Ted. So basically I need to sign a warranty deed and then have it recorded and then technically I have the deed, correct? Where does all the documentation regarding me paying the mortage for 24 months and paying the seller in full 24 months from now go? Is that a difference form? Any and all help is greatly appreciated.
Tell me all the info up front and I may be able to help. Your post said nothing about 2 years etc. To help secure the sellers position you may want to create a wrap note and a deed of trust. This would enable the seller to foreclose using a trustee instead of a judge. Provided you are in a trustee state.
If I were you I would never do a “subject to” deal. There are other very safe ways of taking a deal down.
I would be interested in knowing your thoughts on “othe safe ways” to take the deal. ( Just curious)
Use a Memorandom of Agreement and notify all parties of your management company now leasing the property. All bills need to be forwarded to you and checks will come from your management. This is much safer than risking any DOS or Subject 2 problems.