Attorney & Title company for Subject To
Member since 2021 · 9 posts · 1 vote
I'm looking at doing my first Subject To deal. Do you guys recommend any attorneys and/or title companies in the Des Moines area that are knowledgeable in this?
TIA!!
Hi Folks, I focus on sub-to. Connect/PM me I send out a free sub to training complete with all example docs. Very complicated closing AND especially post closing.
Recently I have had to change my closers, the old ones bailed on so called liability. The best tactic is to join local REIAs in your area. Ask for investor friendly closers for referral from LOCALS.
Else; use google and start calling all the real estate attorneys/title offices in your area and ask if they'd close a purchase where the security deed was not paid off and stayed in the sellers name, you take over the payments. They do not know the term; subject-to. Keep calling. Some may say its illegal which is wrong. In GA the settlement statement lines are 203/503; debt left in the sellers name subject to... Obviously its NOT illegal, just not very common.
You are not assuming the loan. You do not need approval by the bank. You are stepping into being the "manager" for the seller since they are leaving the country and leaving their real estate in your hands as the trustee of their family trust and the manager. If you don't say stupid things to the bank (post closing) and have trust docs, Power of Attorney docs, the banks have a std process for "managers" "trustees" to take over managing the loan.. Never a problem!
Also mention to the closer/title office you'll close into a trust and you'll bring all the docs including important adendums to the warrantee deed. See my docs.
Hi Alan, how are you learning about Subject To. It is something I would also like to learn about.
Hi Alan, how are you learning about Subject To. It is something I would also like to learn about.
Hi Folks, I focus on sub-to. Connect/PM me I send out a free sub to training complete with all example docs. Very complicated closing AND especially post closing.
Recently I have had to change my closers, the old ones bailed on so called liability. The best tactic is to join local REIAs in your area. Ask for investor friendly closers for referral from LOCALS.
Else; use google and start calling all the real estate attorneys/title offices in your area and ask if they'd close a purchase where the security deed was not paid off and stayed in the sellers name, you take over the payments. They do not know the term; subject-to. Keep calling. Some may say its illegal which is wrong. In GA the settlement statement lines are 203/503; debt left in the sellers name subject to... Obviously its NOT illegal, just not very common.
You are not assuming the loan. You do not need approval by the bank. You are stepping into being the "manager" for the seller since they are leaving the country and leaving their real estate in your hands as the trustee of their family trust and the manager. If you don't say stupid things to the bank (post closing) and have trust docs, Power of Attorney docs, the banks have a std process for "managers" "trustees" to take over managing the loan.. Never a problem!
Also mention to the closer/title office you'll close into a trust and you'll bring all the docs including important adendums to the warrantee deed. See my docs.
Hi there! @Alan Negrete
Royal Legal Solutions is a great resource for what you are looking for. They have attorneys and CPAs on staff to assist with entity structuring, business planning, and tax planning. I am a consulting attorney with Royal Legal and happy to answer any questions you may have.
Thanks,
-Megan
Hey Alan!
Here are a couple attorney's I would recommended in the Des Moines area.
1. Matt Nuzum, Iowa Business Lawyer, Website
I work for a local real estate agent, Darson Grantham, and he recently interviewed Matt. Pretty good stuff! It was a 2 part interview. The 1 part, Here, pertains more to a residential homebuyer. Part 2, Here, pertains more to investors. Both have a lot of valuable info!
2. Jeff Egge, Wilson & Egge P.C Attoenys At Law, Website
Both great contacts and incredibly knowledgeable. Hope this helps and good luck!
Hi Folks, I focus on just doig subject to. I've created a free training PDF showing the process and examples of all docs YOU BRING to closing, the attorney orchestrates getting signed and notarizing. The attorney in my process just creates the warrantee deed and attaches MY affidavit of trust. Connect, PM me I'll send it to you. I also like interactively helping folks qualify deals and help them get them closed over email.
Call those and other attorneys and ask; will you close a deal where the mortgage is NOT paid off? In most states the line on the HUD/settlment is lines 203/503 has the balance of the mortgage, subject to the existing mortgage. They have to say yes. Most attorneys actually don't know what you are asking or will bail after thinkking about it.
The best way to find "investor friendly" attorneys is from other investors in that area. The best REI tip I have that made a huge difference for me 10yr ago is for you to join the local REIAs, real esttate investor associations. Find them by googling; city REIA. or look in meetup.org, real estate investor associations. Join, these orgs are where old timers hang.
The attorney has to be comfortable with all the investor scenarios and for some investors, subject to, to bring most of the documents, trusts, seller affidavits etc.
Good luck, curt
Update re doing suh-to purchases going forward today, 12/2022 forward, now in the post covid forbearance was easy to get period and now those stressed sellers are wanting to get out from under their mortgages and / or the owners often un-doable "work out" scenarios the servicer can offer.
My help is; you have to ask the seller "where you ever in forbearance in the recent past?". Hopefully they will be honest and admit Yes. BTW I've not had a willfull lieing or dishonesty in a distressed seller. Often their lives are in such chaos they don't remember everything. THEN ask; have you gotten a work out from the bank (servicer) to re-instate the loan so you are making monthly payments now?? Are you making payments? Y/N. Can you give me a copy of the monthly statement from the bank/servicer? You really need to do a 3 way call where the seller calles the servicer and gets a human on the line. Then tell the owner to give premission for you to talk. Ask; "is this loan in forbearance?" If yes; what are the arears? If yes: can the borrower get a work out to re-instate the loan by putting the arears on the end of the loan? The person will give a list of choices. Ask the seller/borrower if they can satisfy any of the choices?
Bottom line; DO NOT close until the forbearance has been ended AND the loan is re-instated and normal mo payments can resume.
My closing training; Connect then PM me, closes you with a POA, power of attorney to talk to the bank post closing and change the mailing address etc, and setup autopay the normal mo payment. You can't setup auto pay if the loan is still in forbearance. This what caused me to fork over $11k post closing to settle the earrs post closing and the seller / borrower was off the hook and long gone. Now I can setup auto pay.
It was MY FAULT for not getting all doc prior to closing. The seller was having trouble getting current doc. Bad luck. the loan was xfered to another servicer same time. The seller thought forbearance was ended. I agree that the seller was fibbing a bit when he said was current and making mo payments. My Bad, my fault for closing anyway. Pre closing I'm 100% certain the seller could have satisfied the easy (enough) FANNIE/FHA reqs to put the arears on the end. After closing, me being the Trustee and the deed now in a trust I couldn't get FHA to work with me. My only choise was to pay off the earears. Amnother $11k into the deal, needlessly. Good think I'm experienced and with resources. A newbie would (may) have been sunk!
Let me say clearly; I like sub to, and today exclusively focus on buy rentals I keep via sub to because I like helping stuck, stressed sellers, 2) I have the knowledge so why not 3) I hate banks. 4) I will deal with banks if I'm forced to but with enough rental income to live well, I now do what I like to do, not what I have to do (use banks to use OPM to leveraged buying).
Buyng sub to deals is NOT a low / no cash scenario. As in above. You might close for just closing costs, zero given to the seller, but those deals 100% need nearly a full rehab to rent up. Or at least a full rental rehab (paint, flooring, fixtures, cleanup which today is up to $20k easy). You NEED cash cash, real green stuff, no borrowing this rehab cash on top of someone elses 1st mortgage. BUT its a great deal since the debt is not on yoru credit report and often there's little compition. Just you and the seller talking about how to solve their problems. "I'm sorry John about your situation. I wished I had more options, but the best I can offer is to buy your house, and I take over making the payments on your mortgage. You can move onto a better life, I fix the house up and rent it forever, keeping the mortgage current. I know this is not what you wanted to have happen, but it will solve your needs to be rid of this house and be able to move on... " . Honest; a truely motivated seller will jump; where do I sign. New folks; You will not have to have some complicated explanation of why you need to take over the paymetns. Just make the ofer simple, only UNmotivated sellers will push back and quize you or say no. Just DRIP on the no's and circle back in 30 days if you really like the house and numbers. Else just move on.
Good luck to all, Curt