Need help from the Sub2 pros! - Posted by Charity

Real Estate Investing
1

Posted by Richard on August 26, 2003 at 10:47:57:

I didn’t mean that harmful-I’m new and trying
to understand how the mentor thing works along
with everything else. It’s alot. good luck
with your deal!

2

Need help from the Sub2 pros! - Posted by Charity

Posted by Charity on August 25, 2003 at 11:53:33:

OK, we are in the process of buying our 3rd Sub2 house in the last 3 months! One we retailed for $26,400 profit, one we are holding and trying to fill. This third one is interesting and I need some guidance.

The owners are in good shape financially and decided to build a new house. Well, they just moved in and had a baby and the old house is vacant. The home is like new, about 5 years old and gorgeously decorated. Worth about $230K. They owe $230K. Payments are around $1300 (based on the LIBOR, so they can fluctuate a bit). They have tried to sell with agents and by owner and have had a ton of showings, but no offers. I am a Realtor so I know that means an offer is around the corner.

Here is the deal: They are willing to give us the deed AND $25,000 right now to take over the house so they can forget about it. They know they would have to pay that anyway with an agent since they owe what the house is worth and he is tired of cutting grass. So, here are my questions:

  1. Who do they make the $25K out to? Us or the trustee or the trust?

  2. How do we recognize the $25,000 in the contract? Exactly where does it go and how would you word it?

I know any advice I get is NOT legal advice. Just curious how you all would handle it!

Charity

3

Re: Need help from the Sub2 pros! - Posted by Richard

Posted by Richard on August 25, 2003 at 14:55:51:

don’t I remember you singing the praises or a mentor that helped you? any advise from them?

4

Re: Need help from the Sub2 pros! - Posted by gerald(tx)

Posted by gerald(tx) on August 25, 2003 at 12:52:53:

I would just have them make the check to you. Don’t complicate things dragging it thru the trust. Your Sub2 documents will pertain to your getting the deed while the original loan stays in place. Close fast and the contract is a non-issue.

I wouldn’t go out and spend all that check, however. Since you are paying full retail on the property, I would be prepared for contingencies, selling expenses, closing costs, holding costs, etc. until the time the property is resold.

Curious – obviously taxes and insurance aren’t in the payment. Usually a mortgage company requires an escrow unless there is at least a 20% down payment. Is there more to your ARM than meets the eye?

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I have a great mentor, in fact… - Posted by Charity

Posted by Charity on August 25, 2003 at 19:30:31:

I sure did “sing the praises” of my mentor, you are right in that. However, I also take into consideration the advice of other investors. My mentor just wrote me a long email explaining his thoughts and I respect those very much. I also respect the ideas and thoughts of other investors on this site. Thanks for asking, though.

Charity