Offering a Sub 2 deal-1st one

I just offered a seller a chance to sell me his home sub 2. He says he needs 310k to pay it off but needs until feb to move out. I told him I will pay him 311 if he closes before end of year. Now if he accepts then I take to the home to finalize the deal…

  1. purchase agreement
  2. sales contract
  3. disclosure form??(loan/payoff statement, appraisal, hoa info, tax info and ???

Here are my questions

  1. what other forms do I take??
  2. I want to somehow use an LLC I have for this transaction, but how do I sign the docs???with my name or ???
  3. The loan still appears on his credit report right? Can I get it to report to my LLC’s d&b or my personal or is that not possible???

does he know you want to take over making the pmnts?

the loan stays in his name and on his report, remember that you are obligated by ethics and morals to make that pmnt so remember that if it late his credit report will reflect that.

no u can’t put it in your name or your LLC, why would you want to? that is the beauty of Sub2 buying.

you can make the contract contingent on him making the pmnts till he moves out on the specified date, specified in the contract. this makes it good for you because it gives you time to find a buyer without the obligation of making the pmnt for Jan. you need to write into your contract that you have the right to bring buyers in to look at the house. if he does not want to make the pmnt, he has to leave the house or rent it back from you. plain and simple

what is your exit strategy here on a high end home like this?

does he know you want to take over making the pmnts?
-yes we talked about this in detail, he cant afford them anymore

-I guess my question about my name or LLC was more about when we do the purchase agreement and warranty deed, which names are used-

Exit Strategy
-I have a renter/buyer relocating from California, a co-worker who wants to rent it until her home sells, then she wants to purchase it, if she cant MDH and I have the reserves to take it(it is kind of a win/win because we were going to build the exact same one(floor plan) in the same subdivision after we sold our last home

u can place the property in either ur name or the LLC. i think from another post u were in TX? u need a warranty deed when u buy, and when you sell u need a deed of trust if you are doing a wrap.

Thanks for the information…the seller and I meet monday to sign contracts, hes motivated and ready to go!!!

im excited about this journey…


I am not sure if anyone mention this and am not sure of much truth to this, but I always hear:

Some lender’s contract may have a saying where the entire amount of the house would be due if they found out you were doing the SUB-2 :o

Anyone want to elaborate? :-\

DOSC Due On Sale Clause

Yes that is true, they can call a loan due upon title transfer, but then they can call it due if you are late on a pmnt by one day. The odds of getting that DOSC invoked are LOW if the pmnts are made on time. Why would a lender want to call a loan due on a perfectly functional note? Who cares where the money is comming from, as long as it’s getting paid.

I like the sound of a loan being paid on time. ;D I just wanted to be sure everyone knows this is always a possibility, due dilligence, so to say. I haven’t done a Sub-2 yet, but I’m sure to run into one anytime now.

Thank you for elaborating. Man you guys are good!! 8)