sub2 purchase / closing question

General Real Estate Investing
1

I am purchasing a friend’s pre-forclosure home on a sub2 basis. The home has just completed construction and the one-time construction loan has become the permanent financing through a Texas bank. I am paying two back interest payments on the construction portion and the first payment on the permanent portion. Since I have NEVER done this before, I have a few dumb questions!

  1. Can I just prepare the required documents and file the new deed or is it necessary to go through a title company.
  2. I have read that it would be beneficial to create a trust. I’m in Texas and there is no Land Trust in Texas. A living trust could be created, I’m just no sure it is necessary, especially since time is critical.
  3. Should I have the old owner send a letter to the lender advising that I will now be the property manager and that I have POA?
  4. What about the insurance? Should I purchase a standard property policy (Not Homeowner Policy) in existing owners’ names and another in my name?
  5. How do I change the name at the tax office? or do I?

Thanks for any help!!!

2

Just FYI…ther are a lot of investors doing “LAND TRUST” in Texas.
Try this for some quick info. If you contact this lawyer he also has some updated info on land trust he will send you. If you have a lawyer that stated this, you might consider finding a new one.

http://maxpages.com/law/Page_6

3

There are a number of courses and investors that do subject to in Texas. Brian Dunklin’s article was done several years ago. A land trust is a living trust and like many states there is no specific enabling legislation but is allowable under the Statute of Uses.

4

Thanks to both of you for your replies. Your input is greatly appreciated.