Sub 2 is getting bad in NC. I have over 20 properties. Consumer Protection is trying to reunite all of my properties with the original owners. They are saying Sub 2 isn’t legal.
On the 25th of Oct. 07 that my big meeting with them in Raleigh, NC. Any advice from any Investors out there will truly help. Thanks :argue
as far as i know the new NC Bill 725 that deals with the legality of Sub2 purchases hasnt passed yet. is the Cons Prot agency saying that it has passed?? if not im not sure what problem you have. there is a ridiculously long recovery period given to the seller by the bill to allow them to recover a home they sold Sub2
the Bill does mean trouble for not only NC Sub2 investors but any in the rest of the country as well since it may well be adopted in other states as well. i think similar legislation is being discussed in NJ as well. other states have already passed other types of ‘investor-unfriendly’ bills though not specifically dealing with Sub2
in NC the bill has been tabled and brought up a few times already so i fear its only a matter of time but as to your current situation i cant see how you have a problem until the bill passes.
perhaps somebody else here can be of assistance
Could the really pass a bill today that would mess up deals done in the past? I don’t see how new law could apply to old deals. It might nause up new deals but I don’t see that it would affect deals you did prior to the new law.
Ray Ray,
Glad to meet you.
HB 725 was basically replaced by HB 1708, http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1708v2.html which I did not see as being passed by the Senate, so that it does become a law.
How did you take title to the properties this may have a bearing on what is happening?
John $Cash$ Locke
PS: Rich, very good analogy.
Ray Ray,
The reason I asked how you took title to the properties is if you read my Article you will have an understanding of what is going on with the Consumer Protection agency.
http://www.reiclub.com/articles/nc-commission-answers
Taken in part:
"North Carolina has no problem with Subject To investing as long as the following guidelines are adhered to:
The problem with the use of a “Land Trust” as a means of concealing a violation of the “due-on-sale” (DOS) clause is that even where the designated trustee is a real person or entity, the identity of the actual beneficiary is concealed or obscured.
This can constitute a deceptive, misleading or unfair trade practice in violation of Chapter 75, N.C.G.S, and, in the opinion of the Commission legal staff, is a circumstance tending to show the person actually controlling the trust is attempting to act as a real estate broker without a license.
Much the same is true for agreements, such as installment land sale contracts or lease/option or lease/purchase arrangements that are not properly recorded in a timely manner in the chain of title.
No reasonable person or prudent investor would fail to immediately and properly record a document transferring an interest in title due to the risk of loss associated with the failure to timely and properly record.
A person or firm truly dealing on their own account would typically obtain a deed, option or contract, properly notarized and recorded, in order to protect their investment.
Failure to do so is very convincing evidence that there is no real investment and that such person or firm is no more than an agent without a license.
The Subject To transaction is a matter of public record. The deed between the seller and buyer must be recorded in a person’s name or corporate entity."
The above State Statutes have been used to cause creative investors using Land Trusts serious problems in the state of North Carolina when doing Subject To deals. If you used a Land Trust to hold title to the properties, then you are going to need legal representation.
John $Cash$ Locke
John-
As someone that also instructs and invests in the ways of Subject2, I wanted to say Thank You.
It is great to see someone actually taking a positive step and opening up dialogue with the powers that be in a state as opposed to just leaving it up to chance and speculation as to what the RE commish is saying about creative RE investing.
Good for you.
Happy Investing!
Dino Watt
Real Estate Freaking’ Investor
There’s a similar “anti-investor” law on the books here in MD. From what I understand it has more to do with lease-optioning a property back to the owner in foreclosure.
As a relatively new investor I’m very hesitant to get the deed these days without a lawyer/formal closing.