Need Help With Sub 2 Deal ASAP!!!!!!!!!!!

I found a VERY motivated seller. I want to do this deal sub2 and I don’t plan on ever refinancing this myself. I will however help my buyer get financed. Here is the situation:

He must relocate because of his job and his company is some how involved in the sale.
He has it listed (which I did not know about) but also had it listed on craigslist himself, which is where I found it.

He owes $212,000
Asking $185,000
Comps are 180-200

Payments are $1785.00 PITI and HOA $200/ Quarter
He is 2 months behind but says he will catch it up if I am going to buy. Or I can just use the money from closing to catch them up. He let them get behind to go for a short sale.

I said I would cover closing closing cost. His copmany was going to pay $4,000 for closing but he thinks if I pay closing they will pay $4,000 to cover the 27k that he will have to come out of pocket with (which he is willing to do).

My exit: I think I can sell on lease purchase or owner financing for the 212k so I can keep the 27k from closing. But, how can I secure his interest of the 23k or 27k that he is coming out of pocket with so that he, his company, and his attorney will know that I cannot take the money and run?

This is my first subject to so I want to know all the answers to potential questoins, and I need to get my attorney lined up. Should I close in a Land Trust or an LLC? I don’t have an LLC yet but can get one fast.

He understands that the loan will stay in his name until my buyer gets it payed off or refinanced.
What other questions should I be prepared for?

Please help.

Thanks sooo much,

Of course he is motivated. He owes more that what the house is worth. I do not see a deal at that number.
The only way it may work if it is a short sale. It will work only if the lender will allow a discount on the loan amount.
Is your state judicial or non judicial? For a short sale to work what was the reason why he is behind? What is his hardship?

I picked up your post through a google notification. I do sub2s professionally.

You have a deal. I would just write up the deal how you need it to happen.

Tell the seller that in order for you to bring everything current and close at your expense, you must take immediate possession of the house including the title. As soon as you get the new buyer lined up and in place, then take the down payment money and bring the loan current, then record the quit claim deeds from the seller(s) to you (all the title holders and spouses) first, then record the grant/warranty deed, second.

Since no bank is involved you can structure the deal any way you need to.

Have you arranged for getting the power of attorney? How about letters to the bank to change the address of the billing? How is the insurance going to be handled? Are you getting a new policy, or adding your name to the existing policy? Are you going to use a note servicing company to handle payment and provide a verifiable year-end statement of payments?

This is still a deal. Buyer that can’t get financing only care about the payment and the down payment. The only issue is getting a loan based on an appraisal later on. You might have to wait longer than you think to get this buyer into his own loan.

Maybe the buyer will change his mind later, and you can rinse and repeat?

You talk about $27k That’s $27,000? That doesn’t seem like just two payments behind. That seems more like a year, or more, behind… What am I missing. If you actually need to get this much down from a buyer to bring the loan current, I think you’re gonna hit a brick wall.

He is upside down by $27,000 (27k) and he was willing to bring that to the table for me to take over the payments of $1765.00


I was impressed that you got the seller to pay you to buy his property!!! I guess you had to spend most of that bring the property current?

Did the deal go through?

My friend Todd did something similar a week and a half ago, except that the loan was $410k and the market value of the house was only $385k. He gave the seller some pocket change to get the deed, and left the renter in the house.

The interesting thing is Todd offered to sell the house for $460k to the renter. The renter was very interested, and so Todd asked him for a $30,000 down payment in return for seller financing. The renter gave him the money and Todd converted the lease to a Land Contract. The contract goes until the market value catches up to the price, or until Moses comes back, whichever comes first…!

If that wasn’t enough, Todd is getting another $200 /mo in a payment spread. So, buying upside down houses can be profitable, too. Who knew? :shocked[/b]


Noticed your post and IMHO, I would have used a land trust since I just do not believe in taking title then you become obligated for all these costs.
The reason also is if the deal goes south due to the seller having financial problems you can walk away and dissolve the trust since I use non-exclusive options so you do not hinder the seller in any way and do not get hit with practicing RE w/o a license…

With all due respect to Mr Jay you do sound like you are very good at subject 2 transactions
Just be careful in how you structure it.

If you do a Land Trust I would have had him directly vest title to his designated trustee since you doing there could be a chain of title issues.
AS to the exit strategy if you do a land trust which I would suggest no legal advice intended make sure your escrow or attorney in how it closes is land trust friendly and understands the trustee would be selling the property to your end buyer… some do not and can red flag it and may have issues with the title company insuring the title…
You absolutely can use and LLC and should have one for the liability protection it affords. You can always assign your % of beneficial interest to your LLC when you get that entity created so no worries there…

If I can help on the LT side let me know

Good luck on this deal…

Javipa In Blue