Quick Question.
I have a question. I have asked this before I think but I forget the answer.
What is the benefit of sub-2ing over drawing up a lease option or contract purchase? That way it would escape all of the problems regarding sellers/lawyers and place into a more conventional category.
Chase
Advantages of Subject to investing
Investor
1. Actual Ownership
2. No financing costs
3. Little or no money down
4. Fast closing
5. You have pour credit and cant buy traditionally
6. Highest and best use of your equity resources
Seller
1. Fast closing
2. No appraisal requirements
3. No lender repair requirements
4. No buyer qualification issues
5. it could mitigate prepayment penalty
6. Rebuilding of sellers credit
7. seller doesn’t have equity to pay traditional costs
Advantages of Subject to reselling via wrap
1. Collecting Down payment
2. Monthly income, (difference between mortgage payment and wrap)
3. Back end equity
4. Being able to sell with owner financing to buyers lenders have turned down…
5. Maximizing of sales price
Disadvantages
1. Possibility of acceleration of due on sale clause
2. Having to quiet a title
3. Having to make mortgage payments while not collecting wrap payments
4. Possibility of Bankruptcy by buyer
Advantages of a Lease/option
1. Non refundable option consideration
2. Eviction process
3. No equitable title on the lease, assuming you have your contracts in order
4. Recoup of asset at the end of term for either a new option consideration and or a higher sales price from buyer or new buyer.
5. Higher than market rents
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Michael Quarles
"Marketing is the key to Successful Investing"[ Edited by IBuyHousesInc on Date 01/22/2006 ]
Quiet a Title definition: A court action to remove a cloud on the title. I.e. Foreclosure
And a lender can accelerate a due on sale on a lease option however they wont know here is a lease option unless the buyer or seller tells them or if memorandum of the option is recorded and you would only record it if the tenant isn’t occupying the property.
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Michael Quarles
"Marketing is the key to Successful Investing"[ Edited by IBuyHousesInc on Date 01/22/2006 ]
michael, i think REIkid was joking on ur miss pelled word BTW what is a quick clame dead?
I hate that when that happens.....
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Or get the Deed in escrow.
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In most cases you can be trustee of your trust. Not advisible. I would not record the CFD unless your states says you have too.
I understand that you should disclose everything to the seller, but do you also mean that you keep your deal open to the lender? So you just ask the seller to deed the property to you/or your LLC?
And how do you handle the insurance policy? Do you just add your name to the old insurance?
Thanks.
Not too sure what John does however I imagine it is right on...
I always have them grant the deed to me and get my own insurance policy....
And the lender gets my check with my name on it...
They get an insurance cert with my name on it as well...
I take the position that if they accelerate the due on sale I will just pay the thing off....
Most of the time I am a far better credit risk then the borrower has ever been... And lenders are not in the business to call loans due...
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Thank you both for your input. Great info.
I remember being in a titty bar (can I use that word here?) in Los Angeles and Mike Tyson, the World Heavy Weight Champion, ran into me… Like, he really ran into me, didn’t say sorry, excuse me or kiss my ass, just ran into me… and I was thinking, what if I said something to him that would piss him off, do you think he would hit me?. I can take a good punch…Then I thought, if he did hit me maybe I could sue him for like 2 million dollars and I would be instantly rich… What would I need to do or say for him to hit me?
Maybe “mike you’re stupid” then I thought no that wouldn’t make me 2 million… Then I thought maybe I could say some racial slur… Then I thought well if he killed me the 2 million wouldn’t do me any good… So there I was run over by Mike Tyson and couldn’t figure out how the heck I could make money and still survive…Would that even be possible?
Needless to say, he didn’t hit me… But the good news is I have enough money now that I don’t need him to.
I still think about that night that I pondered trading the reconfiguring of my face for 2 million dollars… it makes me sad that I didn’t jump on the idea…Not eating for 6 months didn’t seem like a bad tradeoff.
What do you guys think?
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Besides learning a lot of good information, these posts are why I leave TCI running in the background on my computer at work also. IBUY you surely can put a bright spot in the day. Keep up the good work
John...
It would take a lot more than 2 million to like him back....
I do have my self respect to worry about....
10 million..... I am his Bitch for the night....
NO… I change my mind…. Just remembered he was in prison, who knows whom he has slept with….
Well hell, for 10 million do you think I could have him sign a form that he states and guarantees that he is decease free?
Where would I get a form like that?
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Michael,
Where would you get a form like that, from a realtor of course they have to disclose everything.
John $Cash$ Locke
PS: Whose your Bubba....ask Mike.
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Kind of like a personal Transfer Disclosure Statement...
Your right… that would be perfect... he could just check mark boxes telling me if he has this issue or that issue..
Maybe I should ask a few size questions....
Don’t want to get too deep... No pun intended... Before I really know what I have to do to earn 10 million...
Wait I have an idea…..
I could just assign this personal arrangement to an investor more qualified than I am… A real A$$ Hole.
If they’re making 10 million what would I charge as a hinders fee?
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Michael Quarles
"Marketing is the key to Successful Investing"[ Edited by IBuyHousesInc on Date 02/10/2006 ]
Michael,
There you go again giving away money, keep the $10 milllion and find an investor who will still pay you a finders fee, try looking here http://www.glounge.com/ you will find one.
John $Cash$ Locke
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John....What do you look for, Someone with a lot of experience or a newbie?
This is getting way too complicated...
I have decided not to leave my day job after all and just stop dreaming about what could have been...
I am just going to be another want to be…. L
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Okay....
A little story I heard about Mike Quarles and John Ca$h Locke...
They met in San Francisco and left a T***ty bar late one night. Nice night so they decided to walk back to the hotel which was on the other side of the Golden Gate Bridge.
Halfway over the bridge Mike said he needed to pee so he headed over to the side. John, never one to miss an opportunity, joined him. Mike turned to John and said, " John, this water is COLD!!!" John answered," Yeah, DEEP TOO!!"
(thanks to Richard Pryor RIP)
Jim
I am sure we all make more money trying to be comedians than we would actually make being comedians...
Jim....and the fish bite too.... I kind a like it.
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If you continue to hold deed and/or title, you should remain the "first-named insured". In the event of a claim, the first-named insured is the primary beneficiary of policy proceeds. The additional insured holds liability protection and a loss payee garners protection in a property claim. (A mortgagee is inherently both). As for paying for it, I would work that into the contract that they "reimburse" for the insurance costs. I recommend you have an attorney verify and structure the contract to address this properly, however...
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