Sub-to Or Land Contract?
Sometimes Sub-To deals scare sellers because they don't understand how they work and the financing stays in their name. would'nt a land contract be about the same thing since your still paying the owner instead of the bank, and still in control of the property? Would appreciate any feedback on this question...
Imagine this example which happened to me on my first deal:
You buy from a seller on contract and you proceed to do a title search thinking that is the right thing to do. Everything is good so you pay the seller UHAUL money and start the rehab.
I start paying the seller and the seller was paying the bank. Little did I know that the seller stopped paying the bank and pocketed the money!
From there the seller decided that she needed to refinance the loan to get rid of the local bank. Luckily I had filed an affidavit and memoradum of agreement or she would have proceeded to cash out refi and bring the loan balance much hire than contract price.
The moral of the story is to NEVER buy on contract or lease option (at least in my opinion). Getting the deed IS imporant. Controlling the property is all great you can't really control it unless you own it! Sub2 is SO MUCH BETTER as it puts you in control.
Once you solve the seller's situation and start getting them out of a mess, they start thinking that they don't need you anymore. Well if you have the property and are making the mortgage payments directly--the seller is no longer involved and they get their closure then.
GOOD LUCK
Thanks Myfrogger, That kinda makes sense. Now I guess I'll have to make tthe seller see it my way!
Appreciate all your help... :-D