Subject To' --- I could use a little help with this one

Does anyone have an example of a Subject To' contract? Can you use the agreement in all states? Are there any state specific laws that would limit use?

I'm working on this current deal. The houses are rented out. It's a no money down purchase. Let's use the following figures as an example:
asking price: $55,000

@ 7% for 30 years with a balloon at 5 years for $70,000
the property rents for $750 per month and I agree to pay off the monthly mortgage of $501. I am responsible for taxes and minor repairs. The owner is responsible for making the mortgage payments and ensuring tenants.

I will make about 12,000 for the five years from the monthly cash flow. At this point I can sell or purchase and keep renting the property out.

Does this sound realistic or am I offering too much?
Also are there any closing costs with Subject To' agreements?
It seems very simple... there is not an actual purchase or transfer of title. So what costs would there be besides the pro-rated taxes?

Please send me any info that may help me. I'm looking for suggestions as to how to make the most profit and any generic forms that you can provide illustrating how I would set up a Subject To' document. You can email me @ edickens@yahoo.com">edickens@yahoo.com

PS. I am interested in all properties in any state around PA. If you have any leads, I would appreciate them.

Thanks,
Ervan

Comments(11)

  • emoore28th March, 2003

    Buy a course and get the forms. You can get Cash's for $150.

    The last thing you want to use generic is a set of forms for a sub2 deal.

    Do it right up front before you get started or you will be out of business before you know it.

  • tanya121528th March, 2003

    You can invest in $Cash$ book, the easy way of learning "subject-to" investing and have everything you need.

    Or, you can ask a RE attorney to draft you up a contract to you specific details.

    Tanya

  • edickens8228th March, 2003

    Thank you for your comments. I created this post because I have literally spent thousands of dollars on books.... LOL I'm just tired of buying books. I was hoping that someone could provide me with a generic form just so that I could understand it. In my case, I have to see the document to understand it. I have checked the websites and they have been very breif in explanations. Sheesh! I'm going to spend all my money on books before I even get started.

    Where are the free books?... LOL
    Signed,
    Discouraged Rookie

  • tanya121528th March, 2003

    If you invest in the right books, then it shouldn't be that discouraging.

    I'm e-mailing you some sample forms that I have. It will give you a somewhat generic way of writing up the contract.

    Tanya

  • JohnLocke28th March, 2003

    edickens82,

    Glad to meet you.

    I waited awhile before I responded to your request for FREE paperwork.

    Let see here you have spent thousands on books and still no Gold Ring, however you seem to feel that some FREE forms are going to get you started in creative real estate investing.

    If you get a deal it will probably be your last one because you will not have State Specific forms. These forms are required, because your State Legislators passed laws on what is required to do real estate transactions in your State.

    I have a feeling it is not the forms, more like 'Information Overload' that is stopping you from doing deals, if these thousands you have spent have not got the job done, then re evaluate your investing methods. Because FREE forms are not the answer.

    Welcome on board this board, this is just my opinion, but then I'm a pretty smart fella along with some of the other investors on this board who are willing to help you.

    John $Cash$ Locke

    PS: The deal you are trying to accomplish will get you in trouble faster than a New York second the way you are approaching it. [ Edited by JohnLocke on Date 03/28/2003 ]

  • sappster28th March, 2003

    Edickins,
    I would take johns post as the gospel!!
    What you have on this deal is nothing more than shark bait! And unless you just like talking to Lawyers? Be Careful!
    Remember "Due Diligence"

    Sappster

  • tanya121528th March, 2003

    The sample I sent him, I explained in the e-mail, is an example and nothing more. There were more to the contract than what I sent him. I also explained this to him. Just letting you know, it was in essence FREE, but in no way to be used for a real transaction.

    Tanya

  • JohnLocke28th March, 2003

    tanya1215,

    I think I will stick to sending out my FREE postcard, the worst thing that can happen is a person uses it and they get sellers calling them.

    I know you are only trying to help, by your posts I see this all the time from you.

    I only hope he comes to grasps with the real world when investing in todays market.

    John $Cash$ Locke

  • tanya121528th March, 2003

    Thanks John.

    You do have a very interesting postcard.

    Tanya

  • edickens8228th March, 2003

    I thank you all for your advice. But would you please do me a favor and forward all emails to my correct email address: edickens82@yahoo.com

    I'm sorry, I posted the wrong address.

    Thanks so much,
    Ervan

  • dbuddha28th March, 2003

    What kind of post card Mr. $Cash$? The ones in the Subject to book?

    Please forward me one if it's not the ones in our books!

    Thanks in advance.
    Johnny

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