Sub-2, where can I practice this.

I will soon be working with a system that lines up buyer and seller using Sub-2 financing. I will get the deed and sell it to an end buyer for an assignment fee. My question is, is it legal in all 50 states to get a deed to a property sub-2 and if not what states are not allowed.

Secondly I believe sub-2 means that the deed is owned by me then the end buyer “subject to” the existing financing…meaning the payments are my or the end buyers responsibility until that loan is paid off…Am I correct and if not will someone please clarify for me.

Let’s see, you want to buy a property Subject 2, and tell the seller someone else who he has never met, is going to make the payments? Or are going to act as a unlicensed real estate agent putting the two parties together?

If it’s the former, you would be conducting business in an unethical way, and if your end buyer defaults and ruins the original seller’s credit, guess who gets sued? It’s you, who the seller made the original agreement with.

Assigning Sub 2 contracts is bad business in my opinion.

And yes Sub 2 is legal anywhere. But you really need to take a course in understanding this. The concept is simple, but missing the details can cause you a lot of headaches and a lighter wallet.

That is definitely a good opinion, I am not fully involved in this situation as of yet. However I am weighing my options as I am an intelligent indivual. I am in the process of researching this practice and gathering details. I am looking into this opportunity as a one year mentorship program, the premis is to line up end cash buyers with motivated sellers(I may be wrong, but isn’t that the same as wholesaling?) and do an assignment of contract. The turn time on these deals is no more than 48hrs. Now I do appreciate you’re input, but in this context do you still think this is something unethical or underhanded? If so why then can I put a person’s home under contract and assign it to an investor and call that business? I certainly am not trying to be rude or condescending, I am just a little confused by your statement.


Also, I am not in any way telling a seller someone they have never met will be responsible to make their payments, I am finding them a cash buyer under terms that the seller and myself came to. This being said it is obvious you misunderstood my question so I will re-state it in very generalized terms. If a seller agrees to sell their property sub-2,(let’s assume I am not securing an end buyer, just purchasing the house my self) then I would, for all intensive purposes have the right to occupy and sell the property, and will be responsible for that persons mortgage payments. At the time of sale the mortgage would need to be paid off.

Is that accurate or am I looking in the wrong places for this info?

I understand your situation better. What you are wanting to do is wholesale. The assignment of Sub 2 throws the question completely off. There is no reason to Sub 2 - in fact it would be a detriment.

You see, Subject To means you actually get the deed in your name. Otherwise, it’s not Sub 2.

If you get the deed in your name, there would almost always be a seasoning requirement – you would have to hold it from 3 to 12 months before reselling. Plus you would have a few closing and recording costs. And a transfer tax if you live in a state with such.

If wholesaling to retail buyers is what you want to do, forget the Sub 2 aspect.

Hey gerald(TX),

I really appreciate your input on this, I am torn between trying to go it alone and getting a one year hand-holding session in starting my business.This is a very expensive alternative to going it alone and frankly I cannot afford it. I have been trying to locate an investor to finance this endeavor, using an LLC and a 50% rate of return to this investor over a one year period at which time the LLC would dissolve, I am also considering an equity share with the right investor. I have done nothing but research, purchase programs and books and “special offers” and frankly I need to get out there and get my hands dirty so-to-speak. It is quite frustrating. I wholeheartedly wish there was an individual who would work with me, in a niche at a time and split profits while doing so to provide compensation for this service. Know any-one?

I am a dynamic marketing professional as well as a practicing mortgage broker. The leads I come across are on a daily basis and I’m not sure what contract to use or who to wholesale the deal to…I am going to my first local REI club meeting, next Wednesday evening. I do know a couple investors locally but unfortunately they are both inlaws and scheisters at that! I know, because of my lack of knowledge and initial reservations,(stemming from fear of getting into a deal I can’t afford or don’t know how to handle) that I will not get out there and just start unless I feel that I can concentrate on the deals and negotiations with sellers, and not be in constant fear of hurting myself, or someone else financially or otherwise

It is also an absolute must that my business’ primary focus is on helping people and alleviating burden. My integrity and ethical focus need to remain in the forefront of my business model. Believe it or not, as a mortgage broker the company I proudly work for is driven by integrity and profit. Profit, I believe, comes naturally when business is conducted in an ethical manner.

I am not selling anything here, just looking for some solid advice on what to do next…I truly feel that I am at the mercy of this “GURU” and so far I have not seen him displayed on this site anywhere. I will say he is succesful for his sub-2 program.