Thankyou everyone for your replies. All excellent advice.
One of you mentioned the need to do “due diligence” when doing sub-2. I probably already know this, but it dosen’t hurt to ask, especially since I’m about to do my first, and I may be missing some details. What “due diligence” are you refering to?
Due diligence means just checking everything out. Seller says the rate on loan is 4% and after checking it was that rate last year but now it is 5.5 % and is an ARM. Inspection of the property is also a due diligence where you check out all physical aspects of the property. You could check to make sure the schools are what you want who supplies water, elec etc. Try to uncover all the surprises before you close the deal. Hope this answers the question.
Thank you,
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737
512-301-9171 home
512-587-6177 mobile
Thankyou, I realize now that I need to ask more questions about the type of loan these people have.
don’t just ask…
You check…
If you just ask… You’ll get burned…
Ask me how I know…
No need to repeat my mistakes…
David
I agree with both Ted and David. But I would combine them. Ask the questions you want to know, then check to see if they really know what the facts, or are maybe not being so forthcoming with their information. It can help by you finding out the facts of their situation and that can be information that helps close the deal for you if the owners of the property are on the fence if they want to do a Sub2 or not (ex. you find through your research that they have a contractor’s lien that isn’t cleared up…this may be the last straw for them to turn over the property). Hope this example makes sense.
Win-Win Investing to you, Shawn
This leads me to ask, how do you go about getting the facts on the sellers mortgage or mortgages? Should I ask for a copy of their loan statement? Or could I get this info at the county courthouse?
You should request this information from the sellers. Don’t ask them (often they don’t know how much they still owe), instead have them fill out a Release of Information form, authorizing you to call/write the lender directly to get exact information regarding their loan(s). You will want this form notarized. The information you’ll get from the courthouse will show the original purchase price, but won’t give you an idea of the currwent standing of the loan.
Good luck to you, Shawn
Thankyou Shawn, everyone has been so helpful!!!