Trying to get information regarding the term “Subject to” clause. When attempting to buy a house in foreclosure from a buyer who is in default, I have seen and heard of the phrase, “Subject to”. As I understand it, “Subject to” is verbiage that is used in the sales contract meaning that the potential buyer would give to the seller X amount of money and some of that would be used to cure the default. The seller’s lender would not be alerted to the deed of trust being signed over to the buyer so that no red flags are raised. Depending on the circumstances, the buyer would either pay the monthly payments and then seek a buyer for the property either an investor with all cash or a buyer that would go through the traditional purchasing process. My question is this, “Is subject to” still being used as a way to purchase houses in foreclosure? I remember back in the 80’s and 90’s this was prevalent and I heard that now it is a remote possibility that this still works. If it is still used, what are the pitfalls that one should look out for? Are there investors that use this process with success? Any advice would be greatly appreciated.
I think “subj 2” financing is one of the most powerfull strategies available to the investor. Preforeclosure properties and “sub 2” go together like peanut butter & jelly. Just make sure that there is sufficient equity\profit margin in any property you purchase - if not, consider a short sale on your preforeclosure. That being said, if your plan is to acquire and turn over quickly, make sure you have clear title before you close (liens, judgements, HELOC’s, etc). I would strongly consider checking into acquiring William Tingle’s “subj 2” course. Mark.
Mark,
Thanks for your advice. Being new to this forum, I appreciate input given by it’s fine members.
:biggrin
scparsons
If you look to the left of this post under Newsgroup Forums you will see an entry titled ‘Sub2, Lease Options’.