First deal- loan structure with owner fin &subject to

5 Replies

My business partner and I are getting ready to sign a purchase agreement on our first deal. We plan to rehab the property and resell within 4-6 months. The seller has agreed to subject to financing on her current mortgage and owner financing the remainder, after a down payment. I have been reading about contract for deeds and I know that we would not receive the deed until the loan balance is paid in full. Is this something that could be done at the closing table with our end sellers and our current seller? I know that if we do a contract for deed, it would keep the subject to loan from being due-upon sale. I’m just unsure of the logistics with paying off the contract for deed before reselling, if this is even possible. Thanks in advance!

Our end buyers and our current seller, rather

@Tasia Turner   When you get a home Subject To you get the deed so there is no seller financing for the deed later.  You might be confusing two strategies that are not used together.  Now with that said you can do a subject to and get the deed and put a note/second on the home for the owner that you still owe to the seller.  In this case you can do that - this can be done through some title companies who understand this type of transaction - if you were in Michigan I could help you out on it a little more but CA is like a different country :-)      

Wait in reading your other post not sure if you have another end buyer involved?   Not clear on what you are trying to do in this case -not sure how much contract for deed/land contracts are used in CA but explain the end buyer and when are you getting paid?  

Thank you for your reply, @Wendy Patton . What you described in your first reply is exactly what we are doing (subject-to and a second due to the owner)..and with help from our local title company. I thought that maybe contract for deed and and a second due to the owner could be combined and then do subject-to on her existing loan. We got all the kinks worked out and out house in currently in escrow! --now just some tax lien title issues :-D The fun keeps on coming! lol. Thanks again for the advice.

@Tasia Turner Can I ask you few questions? because you have a very advance strategy. 

1. what title company are you using?

2. When you do Sub 2, did you do the paper work by yourself or by attorney service?

3. when you do Sub 2 , have you inform the lender about this?

4. are you planning to obtain HO insurance? How does it work?

5. is it a quit claim deed transaction or a warranty one?

6. Who is going to take care the tax problem? 

7. about your buyer, is it a one time closing or the property have to transfer to you then open another escrow for your buyer?

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