I just made and appointment with a seller and am going to offer him a sub 2 deal. he is two payments behind and I am going to give him 3,000 if he deeds me the property. When do I record the deed? Do i need to fill out a purchase and sale agreement then or should i wait until closing? When do i make up the payments? This is my first sub 2 and i am just confused about when i should do all of these things. Thanks for the help.
I don’t know if you already talked to him about giving him the 3,000 but if you haven’t don’t mentioned anything about it.
recording the deed should be the last thing.(I could be wrong but that’s how we’ve been doing it.
the purchase and sale agreement should be the first thing you do when you meet with the seller.
you make up the payments when you know the deal is a go.
you might want to post some more details on the deal to get a better understanding and better help you.
loan balance 95,000
appraised at 130,000
were going to offer 110,000 through either a Sub 2 or lease option. He said he was looking to get 15k out of the deal
he wants some money down but we have to make up 2k in payments and replace a 2k dollar rug. I’m wondering what i do and when i do it when he excepts either offer
If he acepts the sub 2 when should i close and when should i tell him im going to start making mortgage payments.
If he accepts the lease option is there anything i have to do with the contract? Do i have to get it recorded?
Thanks for the help its greatly appreciated!
YOU need to stay in control. offer either Sub 2 or L/O, not both. you need to hold the cards because you are helping him, not the other way around.
the objective is to get in for the least amount of $. after all, you are paying his arrears. also, on a sub to, you offer the loan balance as the purchase price, plus a note for his part of the equity of $15k, unless you want to pay that to him cash and he walks. however, having said all that, this is not working for me. personally this deal sounds too thin:
IF it sells for $130000
minus balance 95000
= 35000 difference
seller’s walking $ 15000
minus arears 2000
repairs/rug? 2000 if your lucky
holding costs 3000?
potential profit? $13000??? maybe if all goes well…i’d tell him “here’s $1k ($2k max but that is pushing it) for you to get a uhaul and pack it up” or i’d pass.
---------EDITED: if you want to make this work, it will depend on what the pmnt is and what rents are in this area, and the area, schools etc to sell on CFD. you’d have to set the purchase price based on future value at whatever this are is currently appreciating at. Example:
appreciating at 4%, purchase price will be $140,608 in 2 yrs, so u enter into a CFD with your buyer for that price, they pay you $1200 (or more) per mo, they refi in 2 yrs and you collect the difference. it would gain you about $10k more than now and would be worth the risk of carrying it for 2 yrs.
Where do you go to learn L/O and Sub2 deals in North Texas?