Help on Sub 2 B4 Monday
I swear, if I do or don't get this deal closed, I am ordering the John Locke manual. My senario:
I called an ad on a 2br/2bt/1c, Needs to sell. I called and the seller said 2 years ago, he had to relocate due to his mother in laws health, he lives about 3 hours away, he had a good renter for the last 2 years but because of both renter and his wife being laid off, they moved to Phoenix.
Their rent was $745/mo with w/d, stove, fridge, and dw and all staying with sale. Approx 8 yrs ago he bought the house for $92k lived there 6 and rented it 2 yrs, its now empty, renter was moving the last of his stuff yesterday. The present payoff on the mort is $79.600, his current pymt is $694.25 PITI, he wants me to make the June pyment and close by the 15th of this month, I told him if he made his son's truck available for one load to the dump with trash left by the renter and trimming of a couple tree's and yard debris and steamed the carpets, I would make the full June payment, other than that just some cleaning, paint and it would be ready to rent, the roof is in good shape and will need reshingled in 2 - 3 yrs, I could have it ready to rent by June 1, hopefully for $800/$775 if pd on time. After we made the verbal agreement on the phone, I asked what he needed from me, he gave his bankers name, said he has been working with him to get the house sold or refinanced because he didn't want the hassle of renting again. So here's the deal he wants me to work it out with the banker to take over his payments of 694.25 with agreement to refinance within the next year, he did not know if it was an assumable or not and if it had a due on sale clause which I don't think they would do being the current loan is at 7.5%, his banker advised him to get 2 appraisals just in the last month 1 came in at 85k and 1 at 88k, with the property clean up and new shigles I think it should easily appraise at 90k maybe better. Have I got a deal here and if I do shoudl I talk to the banker? What do I ask? Do i need to have something signed by seller before I approach anyone? Me and the seller are just sitting here neither of us know really what to do. HELP!!!
Hey dschoenwald,
Why would you contact the lender, you trying to trigger the DOS clause? NO,NO,NO!
unless it's assumable..mortgage
has to be before 1988.(Dec. I think) for you to assume without qualifying.
Have the owner grant you the deed.
Have an escrow/title co. lined up for the closing..
You'll want to put the deed. in a trust and record the trust. You don't want to tip the lender off at this point...
GET JOHNS MANUAL, you will have it in 1-2 days...Skip the presentation for now since you're already working with a seller. Find out what you'll need to do this deal..and you're on your way...why guess around and wonder?
Do it right the first time!
Hope this helps,
Clif
You should tell the seller that it is best not to talk to the banker at this time. Not because of the DOS, frankly I feel that's over analyzed. You could do this subject to or by L/O. But for God's sake tell the man that you are new to the business but impress upon him that you are willing to relieve him of this albatross. Use your newness to your advantage and get the seller to trust you. Then you can take the correct steps to seal the deal. Right now you need an option or P/S agreement to maintain your position. Personally from the sellers point of view you should probably work a sandwich L/O to protect the seller from your newness.
Good Luck,
Shawn(OH)
Thanks you guys,
The seller made it clear he was going to lease it to me and then have me lease it, he knows I am going to rent it out again.
What does it take to set up a trust? And whats the process after that. I am ordering the book right after I post this, but I need to at least go into escrow by the 15th as the payment was due June 1, but advised seller they will wait till the 15th for payment before any action or penalties, this is the payment I promised seller for cleaning carpets, hauling trash etc.
Whats my next first step till I get John's manual?
Darwin
So from what you just said, you are doing a sandwich l/o and not a sub to. If you are leasing it from him then you are not doing a sub to. In a sub to, you will be taking ownership of the house by having them deed the house over to you. Big difference.
Tom[ Edited by tbelknap on Date 06/08/2003 ]
dschoenwaldL
sounds to me like you might want to do a little more studying up (spend a little more time on this board) on your proposed acquisition methods before you commit to doing this deal. If you aren't sure what you are doing you might make a big and potentially costly mistake.
dschoenwald,
how did this turn up for you?
did you find locke's sub2 manual helpful?
take care, and good luck!
kevin
Kevin,
Glad to meet you.
http://www.thecreativeinvestor.com/ViewTopic10009-7.html
John $Cash$ Locke