Closing Today... 1st Subject To Deal - Posted by Mike (IN)

Real Estate Investing
#1

Posted by Fran CA on September 12, 2001 at 10:35:53:

Hi Mike,

Thank you for correcting me. I will file that bit of information for later use. I knew that you should have it recorded somewhere that he paid you money.

Thank you for the additional information.

To Your Success!

Fran

#2

Closing Today… 1st Subject To Deal - Posted by Mike (IN)

Posted by Mike (IN) on September 12, 2001 at 09:07:46:

All of the homes I have acquired over the past year and a half (15 or so) have all been acquired using lease/options or mortgages. Homever, I have my 1st Subjet To deal today at 3:30.

I am taking the property subject to exisiting financing and using a Land Trust to take title with my S-Corp as the beneficial interest. I have Bronchick’s Land Trust & Cash Cow materials and want to be sure I am using all of the necessary forms. Please review my closing docs for me.

  1. Trust Agreement
  2. Warranty Deed
  3. Assignment of Beneficial Interest
  4. Seller Disclosure Form
  5. Due on Sale Acknowledgement form
  6. (2) Authorization to Release Loan Info (1st & 2nd)

** Do I need to use any type of Purchase Contract? I feel like I am missing something. Also, the owner is paying me $4,000 to take the property. Does this need to be aknowledged somewhere in the paperwork?

Please Advise
Mike

Please advise

#3

Re: Closing Today… 1st Subject To Deal - Posted by david garcia SC

Posted by david garcia SC on January 25, 2002 at 21:40:26:

I’m also new doing the subject to’s. I took the course through graystone mortgage. I’m willing to share my documents with you if you do the same with me.

#4

Your Missing… - Posted by David Alexander

Posted by David Alexander on September 12, 2001 at 19:18:23:

Power of Attorney for the property.

Insurance, you need to either change the policy or cancel the policy and add a new one.

We always have the insurance company set it up so that it reads of course as xyz mortgage company beneficiaries as they appear, with the trustee controlling the policy.

Also, we have them address in the name of the homeowner C/O smith family trust to our address.

Also immediately change the address and phone number to contact.

David Alexander

#5

Shame on you for violating the DOS - Posted by Bud Branstetter

Posted by Bud Branstetter on September 12, 2001 at 13:45:50:

Get a letter signed by them to the insurance company adding the trust as an insured and changing it to a rental property. Also a signed letter to the lender stating that xyz is now the bill paying service and to send the statements c/o them to that address.

Is’t it better this way than L/O?

#6

Re: Closing Today… 1st Subject To Deal - Posted by Fran CA

Posted by Fran CA on September 12, 2001 at 10:19:50:

Hi Mike,

Congrats on your first subject to deal. It looks like you have all the correct documents. Yes, you need to have a purchase contract and I would just add an addendum for the money that you received from the seller. How did you manage that? :slight_smile:

To your success!

Fran

#7

Re: Your Missing… - Posted by Mike (IN)

Posted by Mike (IN) on September 13, 2001 at 08:16:59:

Thanks David!

I did get the power of Atty (Thanks to you & Bronchick).

Also, I will be sending the notices to the insurance and mortgage company to make the necesarry changes.

I appreciate your help!
Mike

#8

Bad idea . . . - Posted by William Bronchick

Posted by William Bronchick on September 12, 2001 at 17:45:15:

I really don’t like the idea of sending a letter that you are a bill paying service, since this is not true. You don’t want someone coming back later with a fraud case against the seller. The other edge of the sword is that if you truly ARE a collector, you are subject to Fair Debt Collection Practices regulations, not to mention RESPA loan servicing rules.

#9

Re: Shame on you for violating the DOS - Posted by Mike (IN)

Posted by Mike (IN) on September 12, 2001 at 14:05:50:

Thanks for your response…I appreciate your input!!

I am also an insurance agent and have a commercial policy for all of my properties. I was planning on having the seller sign a cancellation form to cancel the existing policy and changing the mailing address for the refund to my address. I will then add the property to my policy naming the mortgage interests and the trust as loss payees.

Mike

#10

update… - Posted by Mike (IN)

Posted by Mike (IN) on September 12, 2001 at 10:27:13:

I received an email from Bronchick. He said that I should acknowledge the $4,000 on the Assignment of Beneficial Interest form…showing the Assignor paid Assignee rather than the other way around.

He also said I should get a limited power of atty from the seller as a backup, in case I need to re-create incorrect paperork later.

Thanks for all of your responses!
Mike

#11

Re: Shame on you for violating the DOS - Posted by Bud Branstetter

Posted by Bud Branstetter on September 12, 2001 at 15:24:11:

Be careful about the name you send to the lender. They want to crossreference the name with that of the borrower. You can insure the trust c/o their name at your address. You can also have problems if the lender decides to re-evaluate escrow at the exact time they pay a new policy. The new low point ups the money going into escrow, ie the payment.