First Sub-2 Deal ... Plz Read >>>
I am putting together a sub-2 deal which seems to be good for both the seller and buyer.....I have a few concerns on this since I have not done one of these deals yet....This deal will be for 2 duplexes:
Seller will accept $5000 cash, and I will cont to make the payments for 12 months.
I will then get it refinanced for a 30 yr or so mtg after that.
Questions:
1)What is the benefit here for the Seller?
2)Is this property treated as "mine" as far as taxes and deductions and all that is concerned???
3)Would there be much if any closing costs now since there will be no x-fer of a mtg?
4)When I refi in about 1 yr, I should not have to put much if any downpayment since I would be "seasoned" and already OWN the property, RIGHT?
5)Any other ideas/benefits on this?
Thanks to all 
Any advise on this???
Well, from what I see, you are making an attempt to aquire the duplexes in order to rent them out. Does that sound right? Obtaining them through sub2 is good for you if you can get the seller to go along with it, so a motivated seller is your best chance. What you are offering the seller is to relieve a problem or situation for them. I'm not sure how many unmotivated seller will look onto sub2 transactions. Reason being is that you are borrowing their credit while owning the property. Unless they have a reason to get rid of the property, it may be tough to sell. Let's say you find a seller sub2, you will have recording fees, title search fees, closing fees, and you recieve the deed. In a year, you can refinance and roll your closing costs at that time into your new loan. I personally am not looking into sub2 to become a landlord to tenants. I'd rather buy and sell in a 2 year timeframe. You should pick up John's sub2 manual. I also picked up a few other books on the topic to get another perspective to it. I doubt you could ever regret a purchase covering this topic, unless it costs an arm and leg, lol.
Good luck.
Thanks, here is what they are suggesting now....Sound ok just want some advise:
Instead of the sub-2, do a "lease-option" for 12 months, then I buy the property and refi....This way they still own the property, and if payments were not made for any reason they could take the property back...I assured them I would make the payments....
Is this better/worse or the same as far as I am concerned????
Thanks
[ Edited by westside28 on Date 07/16/2003 ] [ Edited by westside28 on Date 07/16/2003 ]
Well, it sounds to me like you aren't dealing with motivated enough sellers. Since they want to hold title, you aren't purchasing sub2, which would give you immediate control. However, the lease-otion for you is a way to purchase the property if you can get the numbers to work. Just make sure you can sublet the units out with theses duplexes and try to get most of the monthly payment applied as a down payment for later when you get financing. Then you will have to find a lender and go through the credit deal. Lease-option, just another way to purchase properties. Bottom line, whatever you can legally, morally do that makes you money with RE is a sound investment.
Well, it sounds to me like you aren't dealing with motivated enough sellers. Since they want to hold title, you aren't purchasing sub2, which would give you immediate control. However, the lease-otion for you is a way to purchase the property if you can get the numbers to work. Just make sure you can sublet the units out with theses duplexes and try to get most of the monthly payment applied as a down payment for later when you get financing. Then you will have to find a lender and go through the credit deal. Lease-option, just another way to purchase properties. Bottom line, whatever you can legally, morally do that makes you money with RE is a sound investment.