The tough part is the buy side - Posted by Reif


#1

Posted by phil fernandez on November 25, 1998 at 15:42:29:

JLM,

Subject to the existing loan would mean that you are buying the property with the existing loan staying in place. In other words the existing loan stays in the sellers name and the seller is still liable for it. Probably a good idea to set up an escrow account so your payment goes to this account and out of this account a check is cut to the original lender of the mortgage that is subject to the contract.

You do not formally take over the loan and the bank is not involved. Again Bronchick can explain this much better than I can.


#2

The tough part is the buy side - Posted by Reif

Posted by Reif on November 25, 1998 at 02:41:52:

I’ve now read several books (as well as Carleton Sheets course) on creative financing, and it seems they all have great ways to make money in real estate, but they all start with the same premise: “Buy properties with assumable loans.”

Which sounds like a great idea, until you find out how few of those there really are, or at least seem to be.

Is this really the cornerstone of this game, or are there other ways to skin the cat? Or are there more of those assumables out there than I’ve been able to find so far?

Reif


#3

Re: The tough part is the buy side - Posted by phil fernandez

Posted by phil fernandez on November 25, 1998 at 06:18:35:

Reif,

There are fewer and fewer non qualifying assumables out there, but that doesn’t mean you can’t get around the due on sale clauses. You could buy property subject to the existing loan or create a land trust and transfer beneficial interests. Check some of Bronchick’s articles concerning how to do this. He explains it much better than I ever could.


#4

Re: The tough part is the buy side - Posted by JLM

Posted by JLM on November 25, 1998 at 08:45:11:

PF,

I have heard the phrase “subject to the loan”, what exactly does this mean. Do you just take over the loan, do not understand how you can do this or do you have to get the back to let you take it over. Would appreciate any information.

Thanks,

JLM