1st Subject To

Comments(7)

• 
  myfrogger7th July, 2004

  First of all, what is fair market value for the property?
  
  I would recomending preparing paperwork for your seller to transfer the property into your trust. Get a power of attorney, authorization to release information for all mortgages, cya letter, among a few other things.
  
  I'm not sure if this is specific enough here but you are very vague on what you are wanting.

• 
  miraclehomes7th July, 2004

  I'm trying to figure out if this is a subject to deal or a lease option deal? Why are you giving the seller 25k? Could you give a few more details and be a bit more specific?

• 
  wannabe217th July, 2004

  I assume you are buying this subject to and providing 25K cash for equity, then you intend to sell on a L/O. Correct, or no?
  
  Is it a good deal at $151K? What is the full market value of the townhouse? Will your market support a $1350 lease payment?
  
  25K is a lot to come out of pocket. Can you get any kind of seller financing on all or part of that? Can you give seller 5K now with a note for the remaining 20K (you negotiate the terms)? The idea is to come out of pocket as little as possible and to get that investment back as soon as possible.
  
  If you QC or sell to LLC you may have to pay excise taxes again for the sale. You're better off deeding into a title holding trust (do record the deed to get your name off title), naming your LLC as the beneficiary of the trust, and someone not too closely related but trustworthy as your trustee (you deed to the trustee, as they hold the title in trust on behalf of the beneficiary).

• 
  jcmoney14th July, 2004

  Well the area will support $ 1350 a month lease and the mortgage that I'M Assuming is an interest only product. It will create a $811 cash flow per month( 811x12=$$9732) a year. Plus appreciation of 12-15% making at least a totalof 25k when I sell.
  I beleive i can have the seller sign a warrantee deed and the record the property in my or someone I trust name. just not sure if this the best way to protect myself.

• 
  MicahM14th July, 2004

  I think you're giving the seller way too much. How much would they have to pay an agent, or for points and closing costs? How long would it take to sell, maybe 2-3 months, in which time they would be making payments?
  
  Add this all up. You could knock about 15k off.

• 
  active_re_investor15th July, 2004

  JCMoney,
  
  I think you need to go back to square one concerning subject-to investing. You should be providing the seller next to nothing in for their equity. If they really expect 25,000 cash then they are not that motivated and you need to spend your time somewhere else.
  
  it might be a great place. You are leaving most of the profits in the seller's pocket. If they can wait for such a buyer, great for them. That buyer should not be you.
  
  John
  [addsig]

• 
  arborlis15th July, 2004

  I agree with John. The numbers are wrong for you and right for the seller. It doesn't require a lot of creativity to give all your money away. Be patient and that elusive bargain will appear. And you'll have the cash available to make a great profit.