Posted by jeff on June 30, 2002 at 10:20:37:
since he was talking about a subject to or an assignment then i assumed he had no intentions on paying full cash for the place. it appears to me he simply wants to take over the payments and not offer a cash payout. this take over will eliminatde the ability to do a double closnig since there will be no large amounts of cash to change hands.
Purchase house already on Contract for Deed - Posted by Michael Tx
Posted by Michael Tx on June 30, 2002 at 07:46:55:
I’m looking to purchase a property from a seller who bought his house on a contract for deed. The contract states it is not assignable nor is his interest transferable. Should I get approval from the original seller, or just purchase it subject to and place in a trust. I’m not too familiar with cfd’s and would appreciate any advice that might help me minimize my risk. Thanks.
Re: Purchase house already on Contract for Deed - Posted by Craig - Fl
Posted by Craig - Fl on June 30, 2002 at 14:25:03:
You never mentioned what the numbers looked like.
Are you in there light? If you are in at a great price why don’t you try to retail the property and have your new buyer cash all of you out?
Is this is fixer upper?
Is it a pretty house? If this is a junker did you get a really good deal that you can pass on to a rehabber type investor? Why not wholesale it “All cash” is required? Again… cash all of you out. Is this a pretty house?
Re: Purchase house already on Contract for Deed - Posted by Terry (Houston)
Posted by Terry (Houston) on June 30, 2002 at 10:19:12:
Remember that there were some big changes to the CFD laws here in Texas. That will make if fine for you as the buyer, but it means that the seller will know what is going on with the payments coming from you, year end accounting requirements etc…
I know some investors around here that will call the note in a second if they assign the contract to you. I would!
They people buying the house now do not have the deed, so you can’t get that now.
I am not saying you can’t do a deal, but an investor is a whole lot different than a bank on a subject to deal.
Just as I see it…
Terry (Houston)
Re: Purchase house already on Contract for Deed - Posted by Bryan (SC)
Posted by Bryan (SC) on June 30, 2002 at 09:52:21:
The land trust method of subject to won’t work with CFDs without the origional owner’s cooperation. The owner who is living there only has equitable title to the house and can’t deed over what they don’t have legal title to. The origional owner has legal title until the CFD is fullfilled. The best you could do in this case would be to get a quitclaim deed into trust. But there would be no point in doing this as the quitclaim gives you next to nothing.
Maybe you should consider a L/O as long as the seller’s contract doesn’t prohibit leasing. Otherwise, you’ll have to negotiate with both the seller and the holder of the contract if you want to pursue this.
Purchase house already on Contract for Deed - Posted by jeff
Posted by jeff on June 30, 2002 at 09:01:02:
your subject to idea on this one probably wont work. my guess is the holder of this CFD also lives somewhere close to the house your looking at. how is hiding the sale gonna keep him from driving past the house and seeing the cars and people wondering around the house are all different? you can hide from banks, owners usually find out.
Re: Purchase house already on Contract for Deed - Posted by Michael Tx
Posted by Michael Tx on June 30, 2002 at 18:34:04:
The house is in perfect cond. The sellers have agreed to 5k now, to get them on their way, and 5k when I get another buyer. After the 10k plus what’s owed, it’ll be about 10k below retail, too low for a retail flip using a realtor but I plan to sell it to someone l/o. The cfd does have a provision in it that lets the buyers(now sellers) acquire the deed when they meet certain payment requirements, which they have met as of Oct. last year. Then they have to execute a new promisory note and a vendors lien is retained on the remaining unpaid balance. They have not done this yet because of a lack of finances. Would it be to my advantage to get this deed first?
Re: Purchase house already on Contract for Deed - Posted by JoeKaiser
Posted by JoeKaiser on June 30, 2002 at 16:09:13:
I’d double check that “quit claim” deed thing about giving you “next to nothing.” Why do you say that?
Joe
Re: Purchase house already on Contract for Deed - Posted by Kathi
Posted by Kathi on June 30, 2002 at 10:16:52:
Why not suggest a simultaneous closing. The vendor sells the house to the vendee for the face value of the contract. The vendee gets the ballance due on the contract. You buy the home from the vendee. The vendee gets athe difference between the sales price to you and the amount due the vendor. Your title company should be able to tell you how to set this up. If the vendor wants to liquidate the home, he will probably not care if he gets his money from you or from the vendee. Happy investing.
Re: Purchase house already on Contract for Deed - Posted by Bryan (SC)
Posted by Bryan (SC) on July 01, 2002 at 11:19:04:
Maybe I’m way off base here, but the way I see it: The origional seller would still have control over the property, being able to get leins placed on it and such. He could even go as far as sell it out from under Michael if he wanted to really mess up the contract as Michael would only own the new seller’s interest in the property with a quitclaim. I’m under the impression that one of the reasons to take property subject to is to have complete control over it (unlike a L/O). Without complete control, why risk having the origional seller discover the subterfuge and freak out? Like Jeff said, it’s very likely the origional seller would find out about any change in ownership. Please correct me if I’m wrong.