you find seller willing to sell sub-to… but they want a chunk of their equity and their willing to get it when you sell. Should you just get a purchase agreement signed and give him a second if he wants one and the cash at a escrow-closing?

Would you still try to get the deed and all the other documents before you set up a closing? Or just do it at closing and let the title co. do it? Wouldn’t you have to guide them to get the cya letter, auth. , p. of att. etc at closing?

If you have a private lender whos gonna lend for payments or equity to seller… and he wants a note… would it be a 3rd mortgage or 2nd if seller needs one too?

Who should go second?


Howdy Arie:

You may have a dilemma if both lender and owner want a second mortgage. The one that finances the most should get 2nd position but the other may not want 3rd position under any circumstances especially your lender. If the seller is motivated enough they should take 3rd lien or even a discount for cashing them out and then borrow more from the lender.

Here is another option. Get the seller to deed the property to you and him both. That way he is still on the title and actually in a better position than a lender. You can then give the lender a second mortgage. This will in effect make the seller your partner but make sure you have an agreement that all he is to get is the balance of his equity.

As far as getting the deed goes this is mainly where there is no or very little equity. When there is equity let the title company and attorneys handle the sale.

You question about giving a second and contract does not compute. If he owns the house you can not give a second. The contract should spell out the financing arrangements and include a financing addendum where you agree to the details.

thanks for the reply. what i was really getting at was if they want some equity now and some later. you answered that too though… set up the second or third through escrow co.

I could just do it myself though right? just take it to the courthouse and rec.?

but if i go through escrow co… wouldn’t they still have to get disclosure for due on sales clause… limited power of attorney, purchase and sales agreement and anything else i or they want? Or maybe just get it signed before.

i’m not sure if a title company would do that though… i mean get a disclosure about the due on sales clause? doesn’t sound like something THEY would do… you know?