Subject to Deal.. Need guidance

this is my first subject to deal. this girl has a 80/20 loan, $217,900 owed.
She purchased in in february and never moved in. Its a gorgeous house in black wood NJ in a developement. I posted an ad for No Qualifying, seller financing. My idea was to use the following:

Purchase sale agreement
warranty deed to trustee
escrow letter
Limited Power of Attorney
CYA Letter
Release of authorization

Now, when i get a buyer and its time to close… Is there ANYTHING else i would need?
This is my first deal that looks like its actually going to go thru, I just want to make sure i dont screw it up.


Glad to meet you.

It sounds like these 80/20 loans are also ARM’s and depending on the appreciation rate in your area unless it is very high, my first reaction would be to say you need is a letter to get out of this deal.

I understand you wanted information on closing doc’s, but my inclination is, since this is your first deal, to make sure you understand just because someone says yes does not always mean you should jump on the deal.

Most creative investors turn down these type of deals unless the appreciation of the house every year is high enough to make any profit in a certain period of time or there is a good amount of equity.

These type of deals can be found on about any street corner today, they may sound good, but do not let your first deal be your last deal.

John $Cash$ Locke

right, i understand that… Thats why i was considering when it comes time to sign the papers, I would let the seller sign them blank and then have my occupant put down a reasonable down payment. and then let the buyer take over the payments of $1600 a month… it is a 10 year arm and the seller just got the house this past february

I havent signed anything yet, I let the seller take the papers home to read over blank.


Just trying to understand how this deal is coming together.

How long will it be before your buyer is required to re-finance and if there is pre-payment penalty have you taken this into consideration?

Having a seller sign a blank contractual agreement, should later on something go amiss you may not want to try and explain to someone in authority that you had your seller sign blank paperwork.

During what period of time until the ARM kicks in, this is in part what is driving the foreclosure rate sky high, so just like your seller purchased the property with easy terms to get in, but not easy to get out, your buyer may be faced with the same thing when the ARM adjusts.

Once those papers are signed you have an obligation to your seller to stand by your decision to purchase their property both morally and ethically, if you are really prepared to do this and have considered all aspects of the deal, then and only then should you follow through.

John $Cash$ Locke

good points… I’m glad i came here first now.
I am gonna get ahold of the seller and find out the mortgage info.
I was gonna just let the buyer take over the payments and let them decide whether they refi or not. But I would let them know it is an arm, and let them know when they can refi considering you just mentioned the prepay penalty. I have a cya letter for both the seller and buyer mentioning about the due on sale clause and whether or not the lender calls the loan due, I wouldnt be held liable.

she has backed out of the deal… good for me.
Once she read the cya letter, she got scared. She wants a garuntee of someone assuming or paying off her loan within a year, and i cant promise that.