Posted by Jim FL on January 26, 2002 at 21:21:50:
Mike,
H.O.A. usually means “Home Owners Association”.
I think the poster was referring to checking the rules, convenants, and fees etc.invloved with the HOA, something that we should all do when buying a property when there is an association involved.
HTH,
Jim FL
step by step subject 2 technique. - Posted by david garcia
Posted by david garcia on January 26, 2002 at 13:59:17:
After reading some serious problems that investors have encountered doing subject 2’s, I want to give a break down of the process & if I skipped anything, please let me know!
As I also want to avoid any pitfalls.
Find motivated seller.
Get & confirm all numbers for home, such as balance of loan, back payments, taxes & insurance, hoa, monthly payments, interest rate. If posible have a sheet & cross them out as you go along with seller.
have seller create a trust & put the home in that trust.
Buyer will be the trustee. Record & notarize this trust.
Have seller assign benefits of the trust to buyer. So buyer can be both trustee & beneficiary. This does not get recorded, just notarized.
have seller sign a power of attorney over to you (buyer) with regards to the property obviously.
Send letter to lender stating that seller has put the property in a land trust for estate planning purposes & that they will be receiving payments from trustee or another source.
Keep current insurance policy in the name of original sellers, but get another one naming your end buyers as beneficiaries.
Sign the actual contract for deed or subject to form & record it. (Also called a land contract).
Have seller sign warranty deed over to you. Record & notarize.
Find a buyer that has down payment & lease option the property over to him. Make sure that the interest rate & monthly payment is higher.
(optional) Have an escrow company receive the payments from buyer & have them pay the lender & you receive the difference.
If I skipped anything please let me know. I’m also a newbie with subject to’s.
david garcia SC
close… but, not quite… - Posted by David Alexander
Posted by David Alexander on January 27, 2002 at 20:11:05:
Find motivated seller.
Go negotiate a deal subject to… existing lien(s)
Get property under contract and at the same time have seller sign loan authorization.
4A. Do your due diligence… Get numbers from lender, title search or title commitment, etc…
4B. Start marketing of property
Once your due diligence is complete… set up a closing date.
At closing you will need a deed, trust, assignment of BI, POA, Sellers disclosure, Insurance info.
Notes: The property is deeded into the trust(deed is filed, not the trust), beneficial interest assigned to wherever you choose, When in doubt on what to notarize, notarize it all. I would not make yourself trustee if you, or your corp have a beneficial interest… or unless you understand completely what you are doing… You want to avoid a dry trust(thanks BR) at least at this stage…
John and Jane Smith C/O
Hide My Assets Land Trust
1313 Mockingbird
Kuckamunga, kalamazoo 8675309
John and Jane Smith C/O
Hide My Assets Land Trust
Sign a managment agreement with the trust…
Find your buyer… have the trust sell, rent, L/O the property.
Manage the property for the trust.
Do not send the letter to the lender about conveying the property… It is NONE of their business and will only invite trouble.
There is no such thing as a subject to form… just a contract stating this is the way your purchasing the property… and buying subject 2 is not the same as buying on a contract for deed.
You don’t have to have an escrow company…
David Alexander
Re: step by step subject 2 technique. - Posted by JohnBoy
Posted by JohnBoy on January 26, 2002 at 21:48:16:
That’s notarize and record.
Not your end buyers. You name the beneficiaries of the trust as additional insureds which would be you if you’re the beneficiary or your company if you use another entity instead of yourself. Your end buyers need to get renters insurance to cover their own personal property. If you sell on land contract then your end buyers get homeowners insurance to insure the property and naming the trust as additional insureds. You would have the insurance name the trust and the beneficiaries as they may appear as additional insured.
I assume you’re referring to selling to your buyer here. You don’t sell sub2 when you are selling. You only buy subject to. If you sell on land contract you don’t want to record it. Only when you buy on contract you want it recorded. Unless your state has laws that require the seller to record the land contract.
This would be the deed you had the seller use to deed the property into a trust.
There is no down payment or interest payments in a L/O. This applies to when selling on a land contract. If you L/O the property you get option consideration for the option and charge a higher RENT than what your payments are.
Re: step by step subject 2 technique. - Posted by Mike in Nc
Posted by Mike in Nc on January 26, 2002 at 21:08:44:
David,
Thank-you for the list, one qustion what does hoa stand for in item # 2, its probaly something easy I did’t figure out but I thought i’d ask
Mike
Re: step by step subject 2 technique. - Posted by Erik
Posted by Erik on January 26, 2002 at 17:20:59:
I am currently working on a sub2 deal also. Naturally, I have concerns with how they work as well. You seem as though you have done your homework. What do you know about the insurance? We, as buyers, leave the insurance policy in the owners name? We have to get our own policy? Also, I have yet to hear or read anything about the power of attorney document. Why do we do this and what document do we use for this?
Re: close… but, not quite… - Posted by ToddB(Va)
Posted by ToddB(Va) on January 28, 2002 at 16:32:54:
6. At closing you will need a deed, trust, assignment of BI, POA, Sellers disclosure, Insurance info.
Do I have to do it this way? Or can I just have the deed signed in front of a notary without indicating who the buyer is, and create a trust with me as beneficial interest later.
Todd B
Subject 2 w/ Mobile Home? - Posted by David Garcia (SC)
Posted by David Garcia (SC) on January 28, 2002 at 02:13:15:
Can I do a subject 2 deal with a mobile home. I understand that a mobile home is not considered real property, its like a car. Can I do a deal? What forms do I use? warranty deed? What if lender holds the title?
Oops… - Posted by David Alexander
Posted by David Alexander on January 27, 2002 at 19:17:26:
JohnBoy… you don’t record the trust…
You record the deed to the trust.
David Alexander
Re: Can an attorney take care of this? - Posted by Don
Posted by Don on January 26, 2002 at 22:20:24:
Is this something you could have your attorney do for you to avoid any problems?