Can someone tell me what a sub2 is and how it works. Is it illegal? and can it be done with mobile homes??? Thanks for any info you can furnish
When you buy a property “subject to” you are purchasing it subject to the existing financing. Simply, this means that the loan(s) and any other liens or encumbrances already on the property stay there without any formal assumption on your part. The owner deeds the property to you, and you take the payment book and start sending in the payments just as the former owner did.
You can sub2 virtually anything. Pretty houses, junker houses, mobile homes, cars, anything with a loan on it, you can do it. There will of course be slight variations in the paperwork of course but you get the picture.
No, it is NOT illegal. Against some banks lending “rules” maybe, but not illegal.
The problem with doing it with Mobile Homes is that they don’t have the Title…
Mobile Homes unless they have been converted to a Land home package, ie as a piece of Real Property… then you cant get title…
It’s Better to do a Lease with an Option or pay Cash…
Now if it’s been converted then it’s just like a house.
David Alexander
Gale Terry,
Glad to meet you.
I can assure you that you can do Subject To investing on mobile homes, automobiles, boats, etc.
The difference is in the paperwork. Here is an example, you purchase a mobile home with a Bill of Sale. The seller sells to you with the Bill of Sale, you would show under the lien portion of the Bill of Sale the lender who made the loan. The lender is holding the title at this time.
When the last payment is made you send the payment with the bill of sale to the lender and request that the title be sent to you. You would also get a power of attorney from the seller which allows you to sign the title and renew any personal property taxes or insurance paid yearly on the mobile. If you have sold the mobile to a buyer then you would assign the title to your buyer after receiving the title. You would also sell to your buyer with a Bill of Sale with the terms and conditions of the sale outlined.
In Nevada the Department of Manufactured Housing handles mobile homes and they have a contract that specifically addresses Subject To sales, which is a nothing more than a Bill of Sale.
So depending where you are located check to see who is the proper licensing authority for mobile homes is, albiet the Department of Motor Vehicles or a Department of Manufactured Housing.
It is all the the proper paperwork, but it can be done and is done every day.
John $Cash$ Locke
will…
It ain’t subject to…
There ain’t No title Transferrring…
It is a Contract for the Title… Or more like a Contract for Deed…
Which is just a glorified Option…
David Alexander
Gale…
To clarify…
A few years ago…
Several of us, got on the web and started calling (mistakenly)something you do a technique…
That something you do was called “Subject to”"… It then propagated all over the web… With Tims help it shortened to Sub to… Sub 2… etc…
What Subject to actaully means is that you can buy a House (or anything for that matter) Subject to Anything… in your clauses…
So You sign a contract to buy the house…
And you have written in… Buyer will buy said house… Subject to the Water sprinkler being broken and being fixed… Subject to buyer getting a clear title… Subject to the Buyer’s partners approval… Subject to a final inspection, within 48 hrs… Subject to acceptance and verifiacation of all number… And of course… Subjecto To any Mortgages, liens etc…
And probably whatever else you could think of…
Once the sale is done title does transfer… and when we buy subject to the loans, mortgages etc… the loans stay in their name… You are buying the the house “subject to” those loans… (So, you are buying the house and accepting that those laons are still there) You will have to pay those loans or the house will go into default… and house will get foreclosed on…
David Alexander
David,
The great thing about the Internet is you can find most anything you need to help you better understand creative investing.
This is information from the State of Nevada:
CERTIFICATE OF OWNERSHIP
The Titling department provides services to the general public, both new and used manufactured/mobile home dealers, financial institutions, title/escrow companies, and legal offices. All manufactured/mobile homes and commercial coaches that are sold or shipped into Nevada must be registered and titled with the Division. The “Certificate of Ownership” or title is like a “deed” for site-built home.
The Division issues “titles” and maintains state records of ownership on all manufactured homes, mobile homes and commercial coaches; provides title searches; records liens placed on homes; issues Real Property Notices. The Certificate of Ownership contains information about the manufactured or mobile home.
Structure Identification: The structure information contains the name of the manufacturer of the home; the year it was manufactured; the size of the home; and the serial number.
Owner: The homeowner may be an individual (s), business or Trust. If the home is being financed, the Certificate of Ownership will list the lien holder and the title is sent to the lien holder since they are the legal owners until the mortgage has been satisfied.
Manufactured homes and mobile homes must also be registered with the county assessors office for collection of property taxes.
CAN THE HOME BE REGISTERED TO A TRUST?
Yes. You must complete an Affidavit of Trustee Appointment & Powers form and submit it with your request. The Certificate of Ownership will be issued in the name of the trustee on behalf of the Trust.
Either way you care to have the Certificate of Ownership (like a deed per the State of Nevada) done, it still means that you are the owner and the existing loan stays in place in the form of a lien.
TEXAS
http://www.tdhca.state.tx.us/pdf/mh/forma.pdf
In block 2A: that the transferor and transferee sign I believe this transfers title, as I see no contingencies that must be applied for.
In Block 3: you would show the Mortgage Liens existing on the property, which would be the sellers lien holder.
How I am reading this form; ownership transfers and the existing Mortgage Liens stay in place.
Granted this may not be the way we look at Subject To investing or (I should say Sub 2 on Tim’s behalf) but it sure looks like a duck to me.
John $Cash$ Locke
Put the Mobile home title in a trust and then assigned the ownership of the trust… to the other person…
That indeed would change ownership, because he who owns the trust own the property…
But, that’s not what you said the first time…
You said a contract… err… bill of sale until it’s all paid off…
Me, I’d never be comfortable with that…
So, I was making a clarification… what you were saying before wasnt the same duck… in fact, it was more like a pheasant… You zigged… added the trust stuff… and now it’s a duck… and now it’s bought subject to…
Ownership has transferred… Before it wasnt bought… It was contracted to buy…
Similar, but, not the same…
David Alexander
David,
Well you inticed me get current on mobile home investing if nothing else or at least the appropriate way it should be done.
I have invested in mobile homes using a Bill of Sale and it has worked.
No, it is not Subject To investing in the true sense, but it did get the job done, of course “Subject To” the existing lein being paid off before title transferred. I have never heard of a lender wanting a mobile home back no matter how you structured it so I used a Bill of Sale.
Bottom line it can be done, I was just thinkin you might have shown me the gardern path to get there before I had to spend the time finding it myself.
I guess this is how we all learn isn’t it?
John $Cash$ Locke