Sub2 Profit
Hello all...
A couple of pretty basic (I think)question here concerning sub2 deals...
I understand the concept of, after getting the deed, keeping the existing loan in place and carrying the financing at a higher interest rate to a new buyer, but what if a short term profit is desireable?
If the buyer is ready to pay FMV and there is an amount of equity, how does it work that the sellers loan is paid off, the buyers loan gets attached to the title, and the investor gets the difference?
does this all magically occur in escrow?
Thanks to any who reply...I am anxious to put what I am learning to work.
-John
Quote:
On 2003-08-12 19:17, iline5150 wrote:
Hello all...
A couple of pretty basic (I think)question here concerning sub2 deals...
I understand the concept of, after getting the deed, keeping the existing loan in place and carrying the financing at a higher interest rate to a new buyer, but what if a short term profit is desireable?
If the buyer is ready to pay FMV and there is an amount of equity, how does it work that the sellers loan is paid off, the buyers loan gets attached to the title, and the investor gets the difference?
does this all magically occur in escrow?
Thanks to any who reply...I am anxious to put what I am learning to work.
-John
You have the deed, so when it goes to escrow, the bank, the closing costs, are paid, and you as the deed holder get the balance. That is all spelled out on the HUD1 disclosure form.
[addsig]
To better explain it:
The closing attorney, because the buyers bank will want one (an attorney), will do a title search and find all leins and mortgages on the property. Then, they will take the money from the buyer, pay the bills, and you get what is left. So, it's a good idea to do your due diligents.
Dustin