Auto Sub2 Business - Posted by Jonathan Rexford

Posted by Jonathan Rexford on April 25, 2002 at 13:55:21:


I agree with you totally about the insurance issue about the additional insured. Maybe insuring me and making the seller additional insured…(tough)

The ownership is really a non issue for me. Beacause I can get the title to the mailed to me and use the POA to transfer. I know there are a few people who come to the board have done these type of deals. But just like you its the liability that I am concern with too. I got a call into my agent right now. Maybe he can shed some light. I know with my trucks that my drivers are covered but this is not a commercial policy. Well who’s next!


PS Eric, what part of Florida?

Auto Sub2 Business - Posted by Jonathan Rexford

Posted by Jonathan Rexford on April 25, 2002 at 09:15:06:


I talked to a few people at the CRE convention (thanks David Alexander and Jack) and I found a really nice, car that I would like to take over the payments on. The car has 3 years left on the note. With Bank of America holding ?Title? to the car what would be the proper steps. I know doing a sub2 transaction with a house (done several of those). I have discussed this with several people and have found a couple documents on the Internet but I still have this feeling that ?PROTECTION? is in order. I am not worried that the Lender will want a payoff I am more worried on how I should handle the title transfer once the loan is paid off and having proper insurance to cover myself just in case I am involved in a accident. Let me run this by you all.

Sign an agreement for me to buy the car sub2 BOA financing.

Have Seller place car in personal property trust with my trustee. Have seller assign beneficial interest of trust to me.

Get Power of Attorney that pertains to Vehicle.

Re Register car in Property trust with my trustee.

The insurance thing is where I get lost. I know that I can put additional insured and such?.I think there has to be a better way.

Any comments…heck if we buy houses why not get the car too

Jonathan Rexford

Re: Auto Sub2 Business - Posted by eric-fl

Posted by eric-fl on April 25, 2002 at 10:58:06:

A couple of things about this trouble me. For one, liability. If you wind up causing an accident and killing someone, you’ll want there to be no doubts about your liability coverage. In this situation, I would want my own policy, not to be listed as an additional insured. On a house, this liability is somewhat different. Yes, the house is in a trust, but even if someone gets hurt, sues and wins, about the worst that will happen is that you’ll lose that one house in that one trust. But in a car, there is a “personal responsibility” issue, i.e., you were the one driving it. Just something to think about.

The other is ownership. On cars, there’s a title, that the bank holds until you pay it off, and there’s a registration, which puts it in your name. Yet, I don’t think a registration is like a deed, per se. When buying subject-to, you are transferring the deed, but I’m not sure where the parallel is with a car, since the bank is holding the title either way. What if you sell the car, or pay it off? How will you get or transfer the title? Maybe your POA and a bill of sale will hold up, but then the bank will know you’ve been making payments the whole time. Maybe they charge you a “retroactive refinancing fee”? Remember, possession is 9/10 of the law, and they possess the title, so you’ll probably have some hoop to jump through eventually to get that from them. Just my thoughts.