Subject to ?

General Real Estate Investing
1

Ok so what do you guys think about this plan.

  1. Find a homeowner that is in pre-forclosure stage.
    2 Crunched my #'s and there is equity after paying the loan off.
  2. Negotiate with the homeowner and basically pay him a few grand to deed the property to me and walk away from this foreclosure situation.
  3. I pay the arrearages and pay the monthly mortgage “subject to” and put the house up for sale at market value, sell it pay the loan off and pocket the difference?
2

all good except for #3… you want to pay them thousands of dollars? some just want to walk away and be done with it, never assume anything.

Also, which state are you in? some states have certain rules concerning buying homes in default, so make sure you are acting within the law of your state.

Also, if you plan on retailing the house (selling it and paying off the loan), that there is enough room to fix, hold, pay closing costs at both ends, and realtor commission. Anything above that is your profit.

3

okay i just wanted to see if this process is correct. Ok maybe not thousands but some homeowners wont just walk away for a song. :biggrin Anyhow im from Houston the Great State of Texas.

4

Texas has a new law passed regarding sub2, so make sure to discuss it with a good RE Attorney before signing any deeds.

5

Wow really? Whats this new law? I assume that its for the worst not the better. Do you have any information regarding this new law and when it was passed?

6

Passed in Jan I believe. It requires you to get written lender approval to sell with an existing lien. There are some exceptions or interpretations, but you need to talk to an attorney about it.

7

well i thought the new law was regarding lease options?

8

Lease option is an old law… since then, there has been few laws that passed concerning sub2, owner financing, rehabing, and so on.

Are you a member of the RICH Club? if not, join it… if you are, locate a vendor there “Road 2 Success” and tell Dennis that fadi sent you to him, and ask him about the laws… he cannot spend all his time explaining it, but he can give you some directions in person :slight_smile:

Fadi

9

no problem i will do that. thanks fadi. one last question are there any new laws concerning wholesaling?

10

Not I am aware of no. We still do sub2 deals here, just need to make sure you comply.

11

sweets,

I guess I don’t understand the “subject to” concept. How can the owner give you deed to the property if the bank still holds the mortgage? Are you assuming the loan? Please let me know what I am missing here.

Geoff

12

Geoff,

Glad to meet you,

This link will provide you to some basics of Subject To investing.

http://www.reiclub.com/articles/sub2-beginner-investing

John $Cash$ Locke

13

John,

Thanks for the link. I now believe that I have a good idea of what a sub2 is. As a matter of fact there are a couple of homes in my neighborhood in Clearwater Florida that might be good for a sub2.

Geoff

14

Geoff,

You are welcome.

Yes, there might be some great Subject To deals available in Clearwater, Miami, Ft. Lauderdale, Jacksonville, Orlando, to make it easy, from the tip of Florida to the top of Florida.

John $Cash$ Locke

15

John,

Can you list which LSCs you are using?

Thanks.

16

VicV,

This company does an excellent job:

http://www.usls.biz/

John $Cash$ Locke

17

You are basically getting the deed and leaving the mortgage in the homeowners name and you will make the payments under their name untill you sell.