Posted by B.L.Renfrow on October 21, 2000 at 22:59:36:
Sure, he can quit-claim it to you, but you’d be wise to read up on subject-to deals and land trusts. This is a perfect situation for using those techniques, or the PACTrust.
In the case of a subject-to deal, you’d have the seller deed the property into a trust by executing either a warranty deed or a quit claim deed, then quietly transfer beneficial interest in the trust to you. The loan would stay in the seller’s name until you or your tenant/buyer either refinanced or paid it off.
If your numbers are correct, this is a deal I’d do in a second…and while I might not like it, I wouldn’t have a real problem with giving that seller $1000 to walk if he’s truly giving me almost $20k in equity. Heck, if you don’t want the deal, I’ll take it, from 1000 miles away.
Just verify your numbers, and keep in mind that an appraisal really doesn’t mean much. Check comps for similar properties to get a better idea of the FMV.
If you’re interested in the PACTrust concept, there’s a man in FL who works with Bill Gatten’s group which deals with those all day long. I believe his name is Marty Weisberg, or something similar (sorry if I screwed that up) and he posts here quite frequently.
I got a call on my ad from a guy who owns a house that he wants out of. He lives 60 miles south of the city the house is in and where I live. Here’s the details: he owes $35,700 on the place and it appraised for $55,000, he owned free and clear and just recently (3 or 4 months ago) refinanced it. That’s where the appraisal came from. He wants out and would like to get $1000 walking money. He’s behind 2 payments ($395.00 x 2 + late penalties)and would like to save his credit from a foreclosure.
My question is this, instead of going the hard money route can I just get this guy to quit claim this house to me for $1000. I know that may trigger the DOS clause but I was going to bring the payments current anyway and thought I would ask the lender about assuming the note. There’s a renter in the house currently and they are covering the note payment as well as the taxes and insurance. There’s also an efficiancy apartment in back of the house which actually gives the property positive cash flow. If I go the hard money route I’m looking at about $3200 in closing costs and points plus the late payments and the owner’s $1000. Were talking approximately $5000 to get into this house. It would still be a good deal but the less I have to put up front the happier I’ll be.
Can a property owner quit claim a house that has a mortgage on it.