sub 2 docs

I have read a lot about sub2. But what docs need to be completed to do the transaction, what needs to be recorded and so on?

Thank you

Perhaps this will help.
I posted something a while ago, perhaps a quick read will clear things up a bit…;action=display;threadid=2491

Down in this thread, I lay out the forms used and what’s what, why etc.

Jim FL


I just read the posting you linked to. That was one of the most helpful things I’ve ever read. Very well done.

Is there any chance I could get you to email or fax me copies of the documents you discussed so I could review them and use as models for my own?

Thanks a lot for the help,


The forms mentioned are simply what I use.
Most courses come with a set, and you can purchase them online in several places.
Of course, I have to tell you, and this is NOT a sales pitch, I also sell my forms online…more of a disclaimer.
I just don’t talk about that or advertise it here at REIclub out of respect for their forum rules.
Especially since they very well might have something like that for sale here too…not to mention Tim, the owner around here is a friend I highly respect.
Check their catalog for forms or a course that includes them, I’m sure the products sold here are top notch.

So, sorry, I cannot just share them, that would not be fair to all the folks who have purchased them from me.
I will help you FREE if you post questions online here on this forum.

Thanks for understanding, and good luck investing, this really is a cool place to learn, with TONS of resources at your finger tips.
No real need to go somewhere else.

Take care and happy investing to you,
Jim FL

Thanks, Jim. I wasn’t aware that you sold them, and I haven’t looked on this site yet. Again, your postings have been especially informative and I appreciate the help.


Hi Jim,

I also read the posting you linked to (thank you very much for that by the way it was very helpful) and it just left me with one question. The way you described setting up the sub2 sale is by first putting the property in a trust, then having this recorded in public record. Then assigning the benificial interest in the trust to the buyer. This is not recorded in the public record. You also mention that at this point the buyer own the trust which owns the house and because the trust is a flow thru entity, per the irs, all the tax benefits of owning the property belong to the sub 2 buyer. My question is does the sub2 buyer also reap the tax benefits of the interest paid on the original mortgage that is still under the original sellers name? The 1098 mortgage interest statement form, the lender sends, will still be in the orignal sellers name and social security number. Can the sub2 buyer still use this form or is the interest paid not deductable by the sub 2 buyer, even though technically they are they ones paying the interest? How do you handle this situation?


Yes, the mortgage interest is yours to use for tax purposes.
Check with a CPA of course, to verify, as I’m not one…that’s my cya, not giving tax advise here.

Anyway, yes, when the 1098 comes, it will arrive in the original barrowers name.
When you file your return, in the section where you enter mortgage interest, the form askes if the lender sent you a 1098, in your name/soc number. You simply check “no”, and then complete the section where it askes for “Who?” was on that form.
He who pays the interest, gets the benefit.

You can also depreciate the property if holding as investment, 1031 exchange it later if wanted, all kinds of neat things.
Buying sub2 really is not rocket science, you are merely buying with someone else’s financing…nothing real flashy there, just a very efficient way to buy…in my humble opinion.

Jim FL