@Tim Ivory don't get lost in the minutiae here. Sub-to's are super simple once you understand them, very few docs needed and the closing is super fast and easy when you have an attorney who is open minded. Call me and I can walk you through it in 15 minutes and I'll send you my docs.
Hi Tim, Sub to is the most complicated deal to close. My way its 10 docs that I create and bring to closing, since 99.9999% of attorneys don't know anything about sub-to. You'll need to call around to a zillion closing attorneys to find an investor friendly who can help you with sub-to.
Any wholesale P&S contract is fine, as is a napkin (not kidding). Hand write an addendum: Buyer will leave the existing mortgage in place and make payments. Seller acknowledges that the mortgage will be left in place. No promisses are made to close out the mortgage.
The P&S contract is simple as that....
Next are the needed docs to close. The biggest part of sub-to happens AFTER CLOSING! The Power of Attorney (for the insurance policy) is used to cancel the policy. The POA (for the bank) is used to change who managed this loan, setup auto-pay etc etc. Buy a new Landlord policy assuming you'll rent this place out, but the keys are: duplicate all the Insureds from the original policy, but adding your name or if in my ssystem the name of the trust the deed was moved into. The sellers name MUST remain on the new insurance policy as the lender of course and your new entity, trust or your name how ever you decide to take title. I do the Trust route per old-school sub-to process. A few more docs signed as well. I took a 2 day training on sub-to. You can find such training I'd guess if you googled. You need the raw docs. Unlike other closings, in sub-to unless you find an expereinced Attorney, you'll need to edit up ALL the docs yourself. I edit up even the warrantee deed myself.... Due to addendum B is the Affidavit of Trust, essential in the Trust route.
Thanks Curt. Sounds like it might be a bit of a struggle to put together, with no or little help from local attorneys. Nonetheless, it must be done. There are 4 attorneys near me, one president of a title company. I'm also from a small town with 65K population, which is a bit bigger than your county. I'll extend my search radias as far as I need to, though.
Is the warranty deed part of the P&S contract or is that a separate addendum to contract? I was hoping it would be common to simple say that the seller will transfer title in a warranty deed. Ok, now that I spell this out, it makes sense that a new deed will need to written up so I also need this. Just to double check, a new deed will need to be created since the lender who holds the mortgage has the original until it is paid off, is this correct?
I will transfer title into my LLC, I trust that will suffice. I also already have a renters agreement for when I lease the property out to a tenant buyer, with a few additional documents to sign as part of this package. It is only the subject to that I need to put together a contract and docs for.
Would it be possible to send me a copy of the subject to package you use? I'd be willing to pay a bit if it'd help for the trouble. I could use it as a starting point at the least.
@Tim Ivory don't get lost in the minutiae here. Sub-to's are super simple once you understand them, very few docs needed and the closing is super fast and easy when you have an attorney who is open minded. Call me and I can walk you through it in 15 minutes and I'll send you my docs.
I see I didn't mention in my original post I give out a training pdf with all docs as examples of how to edit and explainations, free, as a help. Connect with me, and PM I'll send this training.