Purchase Agreement
I may be putting the cart before the horse here but I have decided to put up or shut up and begin May 9th. I think I can handle a wholesale transaction however a subject to is a bit out of my league. If I am presented with a "subject to" situation can I fill out the purchase agreement "subject to existing Financing". Can I then figure out the next steps (Warranty Deed, Land Trusts etc..) I am a habitual "Analysis Paralysis" guy and I am getting some advertising (bandit signs etc..) out there May 9th come H*ll or High water. Thank you.
Good luck! Need any help just ask or PM me.
Oh yeah the guy was so happy that I helped him he called me up a month later and asked me to have a beer with him. It feels good to help some one and get 60K in equity.
Attached are two real estate investment clubs in Atlanta. Making a few dozen phone calls, posting on their forums, etc. may help you contact investors in an effort to gain advice and a solution to your problem.
Ten percent is not a lot of equity to work with. However an investor can work a deal with you now rather than listing with an agent.
Get a referral for an attorney to represent your interests in Atlanta. They will work it out so they get paid when you sell.
http://www.gareia.org/
http://www.reiatl.com/
Thanks alot so far guys, hopefully I can do something with these properties ASAP,
where i am from if you have a sales price of "0.00" you dont have to pay it. in which case you are taking sub-to so the sales price is zero. am i correct?
Yeah have the same problem in Chicago. We have to pay The County The State and The City when you transfer property. If it is sub-2 we only pay City Taxes.
Real pain in the ass with thin profit margins.
Can you get in trouble for putting 1 dollar?? I put the total price of back taxes, loan balance, uhaul money etc.
Do a search on this topic here--there are endless discussions on it.
Bottom line--no way around it. People try, though.
I lived a couple hours south of Philly where the tax is 3% in DE. I looked and looked for a way.
No, you can not put $1 or $0 as sale price--you have to use your actual purchase price unless you want to get in trouble later on. Not a good way to start investing business.
you are assuming the mortgage...the amount that is taxable is the amount above the amount of whats owed onthe mortgage.
so if you are buying the property for 100k and you are assuming a mortgage with a 90k balance then the consideration is 10k and your tax is $400 (.04*10,000).
Make sure that that the consideration on the transfer tax paperwork is for 10k assuming a scenario with these numbers.
I hear that a few states go by the gross sales price whether loans are assumed or not.
[addsig]
i take properties all the time like this in CT with a trust and i have never once paid transfer tax. Yes, i pay when i sell but i do not pay when i have the property transfered from the original owners to a trust. My attorney draws up all the documents. i believe he writes zero as a sales price because the original owners stay the benificiaries until i sell it. Thats when i pay the transfer tax.[ Edited by ryand on Date 05/24/2005 ]
Ryand do you pay transfer tax when the benificial interest is assigned? or just when you sell
No i dont pay trasnfer tax until i sell. When i deed it into a trust i only record the "Deed to trust" and not the rest of the trust or the benificial interest. so i have a one page deed to trust stating me as benificiary and thats it.
My attorney Just shows the other Attorney who the Benificiary is at closing so the checks get written to me or my business. a lot of times they write them to Ryan As Trustee and i have no problem cashing them. Some people say you need a trust account, but i have not had to deal with any of that. Make sure you hold the rest of the trust and just record that one page.
Good luck,
Ryan
Record what page? just the deed???
Just the Deed to Trust page. NOT the full trust and documents
In most states, a Trust is specifically exempt from the transfer tax, because many people use a Trust for estate purposes. There is no subterfuge involved doing so.
[addsig]
Actually, I am a Trustee and a Benificary. I have the owers sign an "Assignment of Benificial Interest" and i hold the document until closing. I make my LLC the Benificiary and i make myself personally the trustee. This way i have full ownership no matter what.
Take Care, Ryan