Buy SubTo, Give Cash Back To Seller After Refi
Hello All,
Any advice on how to structure this?
I am hoping to take over the seller's existing mortgage SubTo and then cash-out refi. They need more than their loan amount to sell, but I don't want to use any of my own money. They are willing to wait for the balance.
How can we do this so they don't get paid until I close on the cash-out refinance?
Thanks again everyone,
JohnCl
[ Edited by JohnCl on Date 02/23/2004 ]
I'm not really sure I understand your question. How can you not pay them until you refi? Um.....you TELL them that they will get their money when you refi. What other choices do you have? You have it stated in the contract that they'll get their money when you refi. I'm not sure what else you're really looking for here. I think it's pretty basic. You might want to check with your mortgage broker to make sure that he/she will refi right after you buy because some would have trouble with seasoning of the title.
Ryan J. Schnabel
Ryan,
I am fairly new at this. Only did one SubTo purchase. I gave them a couple of thousand in "UHAUL money" (from my pocket) at closing. Finished Repairs and am in the process of doing the refi.
I see what you are saying. Sounds like I am trying to make something harder than it is. I'm sure I'll need to commit to some sort of timeframe in the offer to purchase. Also, they are bringing a tenant-buyer with 5K ready to sign a lease option. I would like to have them guarantee that also. Just as simple?
JohnCl
John,
You are getting this sub-to, and they are bringing you the buyer? nice.
Why won't they just do the lease/option themselves? or am I missing something?
Best of luck, and congrats
Dave
John,
if you've got A TB coming in with 5k, why not take that money from the TB and give to the property owner. You've just created a no-money down deal for yourself. What I mean by this is that there is no money out of YOUR pocket.
In your contract specify a date by which the property will be refi'd and the owner will have their money. I really believe it is as simple as that. I could be very wrong, but this shouldn't be very difficult to do. Either put it in your contract and print a new one out or write it in as an addendum. I'd say the biggest thing is to just be up front and honest with the owners and create that rapport and you'll be fine. I actually haven't done one deal yet, so you've got me beat.
I'm at the point where I've got the knowledge (or so I tell myself) and now I've gotta go get the deals. Best of luck on this one, let us know how it turns out.
Ryan J. Schnabel