How Does This Work?
I have a home that is mortgaged. I also have a wrap around with a Contract for Deed with 24 months to carry out the contract. Price 215000 down 5000 remaining balance 210000. I shopped around to sell the note or Contract because I need cash. I rcvd an offer of 1 time buy out of 180000 or 2 payments of 156000 each...1st payment at closing next payment in 15 years. How can I work this deal? I cannot pay the first mortgage off with the lumpsum.... How can they offer 2 payments when they know about the original mortgage????
Well all I actually did some reading and figured this out. All I needed to do was take the time out and read,....(smh)... Its amazing what I can learn by just going throught the threads on this board and others. Thanks everyone.....for taking the time out to post such valuable information!
Hi Dat,
What did you come up with?
just read the older posts on this forum -- and how did your meeting go?
Good question. [ Edited by charlotteinvestor on Date 07/05/2006 ]
Bill Gatten at NARS I highly recommend.
Da Wiz
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After talking to few people that i know, I was able to pay off the balance. I even got some cash to renovate the property. Everything turned out ok, except my share of profit. Thank you all for the book recommandations.
Do you mind posting the numbers on this deal and illustrating why you did not get a profit. Would be helpful to others and could help you on your next deal.
why did you offer the investors so much of a return. You should get the most return on any you deal you put together.
"Future to mortgagee" means that the future insurance billings are to go to the mortgagee to be paid from escrow. This is moot once you get the correct policy as I have described. The new insurer will handle the billing accordingly (at least they should).
As for the refund, the insurer will refund the premium credit to the existing first-named insured (in rare occasions they will refund it to the escrow account). Technically, the refund is for the unused portion of the premium (in other words, the period BEFORE you bought the property). As to whom this premium credit belongs, that is/should be part of your sub2 contract/agreement...
Hope this helps...
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This article will help you understand the insurance issue(s) with Sub2...
http://www.thecreativeinvestor.com/modules.php?name=Articles&file=article&articleid=472
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Hi Tim - So your last paragraph of this article explains to have a Landlord and homeowner policy.
So... I would be the Landlord (new owner)
who would be the Old owner? the Bank and the Old Owner as Mortgagee and additional insured respecitively. Correct?
Thanks. This subject came up in a group I was in and no one knew how to insure without setting off a red flag. They were saying to just NOT insure at all - live dangerously. This is much better.
No, the "landlord" policy is to replace the "homeowner" policy. The homeowner policy is for owner occupied property (i.e. your house). The landlord policy is for NON-owner occupied property. As stated earlier in the article, having both could jeopardize each in the event of a claim.
The bank is named on the new landlord policy in the same manner as on the old homeowner policy, with the appropriate, correct mortgagee clause...
Hope this helps...
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Best regards,
Tim[ Edited by norrist on Date 07/10/2006 ]
Any input?
Yeah, try REIU (dot) COM. Tell them I sent you.
: )
Quote:
On 2006-07-12 08:53, ttime wrote:
Any input?
Which would be a better option?
Sell Contract For Deed?
Sell an option to purchase?
Both would require a payoff of original Sub-To load at close.
Use either a CFD or Option. I prefer an Option. In some states a CFD only requires an eviction.
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LOK,
Thanks for the response.
Couple of questions though!
1) If I sell on option, what would be my recourse if the buyer stops making payments?
2) Would it be a good idea to try and purchase with an option also?
3) Legally what are the main differences in a purchase contract and an option contract? Am I right on this?
a) Purchase contract would require a deposit/earnest consideration to make it binding. The seller would be able to enforce your performance if necessary, and/or retain the consideration amount.
b) An option to purchase would require a deposit, the seller can not enforce you to purchase but may retain the deposit amount.
Thanks everyone for all of the good info.