I am new to this subject to process. When we take a title subject to does the homeowner get any relocation money? Also when negotiating with a homeowner is the contract signed for the amount due on the mortgage or what you have negitoated with the homeowner?
Though I am nowhere near an expert on Sub2 deals, I would suggest using the search feature on the forum using the words Subject-To. This is how i’ve familiarized myself with different investing techniques and there is PLENTY of material to keep just about anyone busy for a while.
There have been many contributors to the topic of Sub2’s on the forum. One, in particular, has provided great information on the Sub2 technique and he explains it in a way that is easy to follow. Look up all posts from…John $Cash$ Locke. While reading his posts you will find out all the other experts that have contributed to that topic as well.
Hope this helps out a little.
Darin
Thanks I will continue to review the posts.
Relocation money no no. As for the amount “subject to the existing mortgage”
I am new to this subject to process. When we take a title subject to does the homeowner get any relocation money?
If you follow John Locke’s Subject To technique, any money given the seller is whatever is needed to vacate the property. He calls it “U-Haul money”
Also when negotiating with a homeowner is the contract signed for the amount due on the mortgage or what you have negitoated with the homeowner?
Depends upon how good your negotiating skills are. Your goal is to purchase Subject To the existing loan balance at the time of settlement with nothing extra for the seller’s equity. If there is a lot of equity in the property, and if the seller wants something extra for his equity, then you might agree to write the purchase price as “The existing mortgage balance plus $xxx in cash, total not to exceed $yyy”
Relocation money. Depends on the equity structure of the property itself. I mean if you find a seller that has a 100K property and owes 30K do you think they will just allow you to take over for 10 bucks and the balance of the note…who knows…that would be a good deal for sure. But if you are able to buy the home for 70K and take the 30K sub2 the seller is owed 40K. You could structure a no money down (10 bucks) and give the seller the 40K when it is sold or what ever you work out. Or the seller may want some cash for his 40K. You could structure a deal if you are able to make the deal work.
But don’t get stuck on the fact that they seller doesn’t have the need for moving money.
As to the mortgage balance/price, when an amount is needed on documents just put “current mortgage balance, approximately $179,000 (or whatever).” Be sure you tell the courthouse it is a “little or no consideration transfer” so you won’ t need to pay deed tax. A few may not buy that, but most do, esp. if you tell thme it’s being done for estate planning.
If the current mortgage balance is $179K and you are taking the deed subject to the existing mortgage, isn’t the consideration given $179K?
How can you claim this is a “no consideration” transfer? Would you please clarify?
I would like to know when you say it is being “done for estate planning”, how do you handle the “Statute of fraud” rules and regulations, regarding the transfer, should the recorders office find out that is was not being done for this purpose?
John $Cash$ Locke
what about transferring title to your own LLC?