Sub tos
Can someone clue me in on the process of the buyer purchasing the home after a 2 year option?
Do they close like a normal purchase?
I thought I heard refinance or is that for Land trusts?
Bottom line how does the lessor get his or her equity gained in 2 years?
[addsig]
Hi Tanner,
I’m not sure if I understand your question as you mention a “2 year option”, yet your subject line is “Sub tos”.
When we sell a property that we purchased Subject to (the existing mortgage), we use a Contract of Sale (Contract for Deed/Land Contract) where we put a clause for the new buyer to refinance that property within 24 months. This way we are cashed out in two years, pay off the underlying loan and walk away with our back end profit. When the time comes for our buyer to refinance they just contact a lender and the lender takes over the process. Since we keep track of the monthly payments via a Loan Servicing Company, our lenders can look at a verified house payment history when the buyer refinances.
Best of luck
John (LV)