OfflineAnyone who has done a Subject To deal explain it in detail? Walk us newbies through one of your deals.
__________________
"I will NOT BE BROKE! ANYMORE!"
In the name of Allah, the Beneficent,
the Merciful.
22.He is Allah besides Whom there is no God: The Knower of the unseen and the seen; He is the Beneficent, the Merciful.
23. He is Allah besides Whom there is no God: the King, the Holy, the Author of Peace,the Granter of Security, Guardian over all, the Mighty, the Supreme, the Possessor of greatness. Glory be to Allah from that which they set up (with Him)!
24. He is Allah: the Creator, the Maker, the Fashioner: His are the most beautiful names. Whatever is in the heavens and the earth declares His glory: and He is the Mighty, the Wise.
I'm hoping someone will help out Atlcamel, for their understanding and for many others on this site as well. If I had the info. I would help out, but I have yet to do a subject to deal. I'm close, but haven't done it myself.
Thanks to all those seasoned investors out there.
Destrie
Destrie
Failure Is Not An Option
I believe a "subject to" contract can be what ever the buyer and seller agree to. It is about the same as a contingency clause. I have done subject to deals where the subject to clause was, providing the buyer obtains financing by a certain date. I have had other deals subject to, passing a mold inspection and structural inspections. You could agree to a deal where the home seller is to complete a specific repair prior to closing. Hope this helps.
getting the deed subject to the existing financing. You control the property, but the mortgage remains in the seller's name. It is also called a wrap around mortgage. It is recommended that you use a 3rd party to make payments and pay taxes and insurance, so that everything stays on the up and up. You should also have a CYA letter signed by the seller that states that you're not responsible if the lender calls the due on sales clause. Your end buyer should sign a CYA letter as well saying that they understand they're purchasing a house via wrap around mortgage and that it could be called by the lender.
KimmyJ
Press on...
Do you have a bullet list of "Subject To" clauses you use in Contract with the Seller and the same goes for with the buyer?
"I will NOT BE BROKE! ANYMORE!"
In the name of Allah, the Beneficent,
the Merciful.
22.He is Allah besides Whom there is no God: The Knower of the unseen and the seen; He is the Beneficent, the Merciful.
23. He is Allah besides Whom there is no God: the King, the Holy, the Author of Peace,the Granter of Security, Guardian over all, the Mighty, the Supreme, the Possessor of greatness. Glory be to Allah from that which they set up (with Him)!
24. He is Allah: the Creator, the Maker, the Fashioner: His are the most beautiful names. Whatever is in the heavens and the earth declares His glory: and He is the Mighty, the Wise.
are you referring to exit strategies like "subject to inspection" or "subject to financing approval" or are you talking about getting the deed subject to existing mortgage?
KimmyJ
Press on...
Beside those contingencies that you mention that I already know of, what clauses would you use in regards to the existing mortgage? I want to know that I would be filling the contract out right with the correct verbage. Do you follow me now?
KimmyJ
Press on...
"I will NOT BE BROKE! ANYMORE!"
In the name of Allah, the Beneficent,
the Merciful.
22.He is Allah besides Whom there is no God: The Knower of the unseen and the seen; He is the Beneficent, the Merciful.
23. He is Allah besides Whom there is no God: the King, the Holy, the Author of Peace,the Granter of Security, Guardian over all, the Mighty, the Supreme, the Possessor of greatness. Glory be to Allah from that which they set up (with Him)!
24. He is Allah: the Creator, the Maker, the Fashioner: His are the most beautiful names. Whatever is in the heavens and the earth declares His glory: and He is the Mighty, the Wise.
Alana,
Stand your ground!I believe KimmyJ(I love you too KimmyJ)said it the best...No liability?The only way to do a Wrap-Around, Would be the first contract on the property...Stating it.Alana it is always good to read your words!KimmyJ is willing to take a chance.Alana if we had a contract that stated:CONDITION,You may not over-write this contract we have together and I make another contract with someone else with-out You knowing? If the contract gets PULLED...It would be your choice since,You hold primary CONTRACT.
After everything I have said,I'm guessing we are talking about dealing with the contracts the banks use.
Invest in yourself!
What is a CYA letter, and how do I get one if I need to use it for "Subject To". Thanks for all your help, your input is greatly appreciated
Everyone Can Make A Difference!
John A.
Basically what the CYA letter is is a letter stating to the seller that you will not be responsible if the mortgage company calls the Due On Sale Clause.
Destrie
Failure Is Not An Option
What destrie said is correct. If you sell the house on owner financing you will want your buyer to sign a CYA letter for you as well stating that he or she understands that they are purchasing a house subject to existing financing and that you're not responsible if the lender calls the due on sales clause. You will need to have an attorney draft something for you.
KimmyJ
Press on...
are wrap around contracts still legal? Or are we just taking our chances that nobody notices, particularly not the bank?
Michael and Tina
If you choose to purchase houses 'subject to' the existing financing here are a few creative ways to keep the transaction under the radar.
1)You can have the original owners continue to pay the lender. If you choose this option ensure you somehow have access to the account to ensure payments are being made.
2)If you are going to pay the lender yourself, which is most often the case, don't mail a check. Send the payment western union. You can check the receipt status and the lender will receive the payment electronically. Checks sent through the mail are easier to send back.
3)Have the original owners add your name to their existing home insurance.
As with all real estate purchases, subject tos included -- ensure you have an Exit Strategy!
I believe there is a thread somewhere regarding subject tos. I don't know if I read it there or somewhere else but "there is no due on sale jail." Lenders clearly want you to purchase a home with new financing versus you assuming an existing interest rate.
Hope that helps.
Fish
http://www.lvlinvestmentstx.usapropertywholesale.com - Dean's free website
http://www.fishbuyshouses.com - Company website
measures is to have an escrow company take care of the payments. It costs $10/mos. and they ensure that the payments are being made. Use a land trust with the owners last name. This way if the bank checks records and jane smith is the owner, you call the land trust SMITH Trust or JANE SMITH Trust. St. Germaine act allows homeowners to put their property in a trust without triggering the due on sale clause. To the average banker's eye, they're going to think Jane Smith put her house in a trust.
KimmyJ
Press on...