What If? DOS Is Called!
So I was speaking to a lawyer and he agrees that subto isn't illegal but he asked what happens when the DOS is called, if at all. What rights do I have in that situation? I assume it is up to me to then bring in financing or lose the house. Can the original owner sue me for this happening?
snek11,
First creative investing is a risk vs reward business. So you have to be prepared to take the good with the bad. However, you can protect you personal assets as follows.
Quote:
Q. On 2003-10-16 20:54, snek11 wrote:
So I was speaking to a lawyer and he agrees that subto isn't illegal but he asked what happens when the DOS is called, if at all. What rights do I have in that situation?
A. At least you found an attorney who knows that Sub 2 is not illegal first good thing that can happen.
Q. I assume it is up to me to then bring in financing or lose the house.
A. Yes, you have a moral and ethical responsibilty to protect the seller. However remember that most motivated sellers not all are to the point they where going to lose the property anyway. So with this in mind, you do the best that you can to help the seller at all times.
This is one reason I like short term holding on my Sub To properties in and out of the deal as quickly as possible. Usually around one to two years.
Q. Can the original owner sue me for this happening?
A. When you talked with your attorney you should have asked him this question, but this is why you use a corporation, LLC, etc. to purchase properties or we set up these corporate entities to protect us personally from law suits.
John $Cash$ Locke
Hi Snek11,
If the DOS is called in Ilinois, you still have 7-9 months to come up with new financing. The legal process still has to take its course.
The original owner could sue you for anything. I would make sure to have them sign a "Hold Harmless" agreement at the same time that they give you the deed.
If you are buying Subject-To in Illinois, it may be best to sell the property on L/O rather than on Contract for Deed. If you sell it on Contract for Deed and they dont pay, you have to foreclose, which can take a long time. If you sell on L/O and they dont pay, you simply evict (approx 30 days). And at the same time, you could refinance the propert much easier this way!
Best of Success,
BAMZ
Thanks for the replies everyone. BAMZ, what is contained in the hold harmless document? Is there an official title on this one? BTW, I had a few more Illinois questions, any chance I could e-mail you?
John, thanks once again for quickly answering my question.
Quote:
On 2003-10-16 21:48, BAMZ wrote:
Hi Snek11,
If the DOS is called in Ilinois, you still have 7-9 months to come up with new financing. The legal process still has to take its course.
The original owner could sue you for anything. I would make sure to have them sign a "Hold Harmless" agreement at the same time that they give you the deed.
If you are buying Subject-To in Illinois, it may be best to sell the property on L/O rather than on Contract for Deed. If you sell it on Contract for Deed and they dont pay, you have to foreclose, which can take a long time. If you sell on L/O and they dont pay, you simply evict (approx 30 days). And at the same time, you could refinance the propert much easier this way!
Best of Success,
BAMZ
Snek11,
Sure! Send me a private email any time. I'd be glad to help!
BAMZ
Quote:
On 2003-10-16 20:54, snek11 wrote:
So I was speaking to a lawyer and he agrees that subto isn't illegal but he asked what happens when the DOS is called, if at all. What rights do I have in that situation? 1. Keep sending checks. Don't really start to worry until they start coming back uncashed;
then
2. Get a lawyer. Have him throw everything against the wall, including "waiver through course of dealing" and see if any of it sticks; meanwhile
3. Work out an exit strategy to refinance or sell out of the property and make the problem go away.
LOL get ready for my long private message, you won't be glad after you see it. Thanks, if it takes up too much time I understand!
Quote:
On 2003-10-16 22:30, BAMZ wrote:
Snek11,
Sure! Send me a private email any time. I'd be glad to help!
BAMZ