"Subject To" advice please
Member since 2020 · 101 posts · 34 votes
"Subject To" advice please
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesQuote from @Ralph Pombo:
Quote from @Stephanie P.:
Quote from @Ralph Pombo:
I could use some quick advice on a "subject to" since I have never done one before. This is a killer deal that will last less than 24 hours. I have a wholesaler that found a subject-to at a great price. There will be some cash up front by me, but I will take over the loan. The seller keeps the loan in their name, the deed goes into my name, but I have power of attorney to pay the loan. Tell me what to look for and which questions to ask. Any advice is welcome. Thank you.
Lots of pitfalls on this one.
If the deed is going in your name, the due on sale clause will be triggered. This isn't a case where the owner has an single member LLC and needs to transfer it from himself to his LLC, he's trying to sell you the property with financing that's not his to give. Ultimately, you'll have to qualify to take over the loan; it's not a given. The power of attorney will have to be approved by the lender.
Just one girl's opinion.
Stephanie
Keep in mind what you have in 95% of mortgages are events of default and one event of default is alienation of title which happens when you do a sub too. Now the lender at the Lenders SOLE discretion can then call all sums due and payable and or enter into a foreclosure. Other events of default are non payment of property tax's Waste and a few others.. but you get the drift. in reality you as the buyer has no real risk other than the few bucks your putting up to buy it.. the real risk is on the seller.. the risk of their credit getting trashed if yo dont make the payments and they dont have the money etc.
Most sellers should NEVER EVER do a sub too deal because of risk.
27 Replies
- Member since 2020 · 101 posts · 34 votes3y
Quote from @Ralph Pombo:
I could use some quick advice on a "subject to" since I have never done one before. This is a killer deal that will last less than 24 hours. I have a wholesaler that found a subject-to at a great price. There will be some cash up front by me, but I will take over the loan. The seller keeps the loan in their name, the deed goes into my name, but I have power of attorney to pay the loan. Tell me what to look for and which questions to ask. Any advice is welcome. Thank you.
Do I get the tax write offs associated with a property purchased this way? - Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes3y
@Ralph Pombo
Do a Thorough tile search and get title insurance. Most states have required disclosure documents a seller must sign. - Member since 2020 · 101 posts · 34 votes3y
Quote from @Wayne Brooks:
@Ralph Pombo
Do a Thorough tile search and get title insurance. Most states have required disclosure documents a seller must sign.
Oh yes, that is a given in this situation. My main concern, now that I am doing a research deep dive, is the "due at sale" clause. - 3yStephanie P.Pro MemberWashington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
Quote from @Ralph Pombo:
I could use some quick advice on a "subject to" since I have never done one before. This is a killer deal that will last less than 24 hours. I have a wholesaler that found a subject-to at a great price. There will be some cash up front by me, but I will take over the loan. The seller keeps the loan in their name, the deed goes into my name, but I have power of attorney to pay the loan. Tell me what to look for and which questions to ask. Any advice is welcome. Thank you.
Lots of pitfalls on this one.
If the deed is going in your name, the due on sale clause will be triggered. This isn't a case where the owner has an single member LLC and needs to transfer it from himself to his LLC, he's trying to sell you the property with financing that's not his to give. Ultimately, you'll have to qualify to take over the loan; it's not a given. The power of attorney will have to be approved by the lender.
Just one girl's opinion.
Stephanie
- Member since 2020 · 101 posts · 34 votes3ySo then what if you are buying under a trust? I have heard of people that do sub-to purchases all of the time without triggering the due-at-sale clause. If you are keeping up with the payments and no red flags are ever raised, why would they ever call the loan. They want to be paid and that is the main goal isn't it?
Quote from @Stephanie P.:
Quote from @Ralph Pombo:
I could use some quick advice on a "subject to" since I have never done one before. This is a killer deal that will last less than 24 hours. I have a wholesaler that found a subject-to at a great price. There will be some cash up front by me, but I will take over the loan. The seller keeps the loan in their name, the deed goes into my name, but I have power of attorney to pay the loan. Tell me what to look for and which questions to ask. Any advice is welcome. Thank you.
Lots of pitfalls on this one.
If the deed is going in your name, the due on sale clause will be triggered. This isn't a case where the owner has an single member LLC and needs to transfer it from himself to his LLC, he's trying to sell you the property with financing that's not his to give. Ultimately, you'll have to qualify to take over the loan; it's not a given. The power of attorney will have to be approved by the lender.
Just one girl's opinion.
Stephanie
- 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Ralph Pombo:
So then what if you are buying under a trust? I have heard of people that do sub-to purchases all of the time without triggering the due-at-sale clause. If you are keeping up with the payments and no red flags are ever raised, why would they ever call the loan. They want to be paid and that is the main goal isn't it?Quote from @Stephanie P.:
Quote from @Ralph Pombo:
I could use some quick advice on a "subject to" since I have never done one before. This is a killer deal that will last less than 24 hours. I have a wholesaler that found a subject-to at a great price. There will be some cash up front by me, but I will take over the loan. The seller keeps the loan in their name, the deed goes into my name, but I have power of attorney to pay the loan. Tell me what to look for and which questions to ask. Any advice is welcome. Thank you.
Lots of pitfalls on this one.
If the deed is going in your name, the due on sale clause will be triggered. This isn't a case where the owner has an single member LLC and needs to transfer it from himself to his LLC, he's trying to sell you the property with financing that's not his to give. Ultimately, you'll have to qualify to take over the loan; it's not a given. The power of attorney will have to be approved by the lender.
Just one girl's opinion.
Stephanie
Keep in mind what you have in 95% of mortgages are events of default and one event of default is alienation of title which happens when you do a sub too. Now the lender at the Lenders SOLE discretion can then call all sums due and payable and or enter into a foreclosure. Other events of default are non payment of property tax's Waste and a few others.. but you get the drift. in reality you as the buyer has no real risk other than the few bucks your putting up to buy it.. the real risk is on the seller.. the risk of their credit getting trashed if yo dont make the payments and they dont have the money etc.
Most sellers should NEVER EVER do a sub too deal because of risk. - Member since 2020 · 101 posts · 34 votes3yJay, I like your reasoning. That makes perfect sense. Thank you.
Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
So then what if you are buying under a trust? I have heard of people that do sub-to purchases all of the time without triggering the due-at-sale clause. If you are keeping up with the payments and no red flags are ever raised, why would they ever call the loan. They want to be paid and that is the main goal isn't it?Quote from @Stephanie P.:
Quote from @Ralph Pombo:
I could use some quick advice on a "subject to" since I have never done one before. This is a killer deal that will last less than 24 hours. I have a wholesaler that found a subject-to at a great price. There will be some cash up front by me, but I will take over the loan. The seller keeps the loan in their name, the deed goes into my name, but I have power of attorney to pay the loan. Tell me what to look for and which questions to ask. Any advice is welcome. Thank you.
Lots of pitfalls on this one.
If the deed is going in your name, the due on sale clause will be triggered. This isn't a case where the owner has an single member LLC and needs to transfer it from himself to his LLC, he's trying to sell you the property with financing that's not his to give. Ultimately, you'll have to qualify to take over the loan; it's not a given. The power of attorney will have to be approved by the lender.
Just one girl's opinion.
Stephanie
Keep in mind what you have in 95% of mortgages are events of default and one event of default is alienation of title which happens when you do a sub too. Now the lender at the Lenders SOLE discretion can then call all sums due and payable and or enter into a foreclosure. Other events of default are non payment of property tax's Waste and a few others.. but you get the drift. in reality you as the buyer has no real risk other than the few bucks your putting up to buy it.. the real risk is on the seller.. the risk of their credit getting trashed if yo dont make the payments and they dont have the money etc.
Most sellers should NEVER EVER do a sub too deal because of risk. - Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
Look at your interest-rate, loan maturity, balloon if there is one, monthly payments and potential rents.
- Member since 2020 · 101 posts · 34 votes3y
Quote from @Eliott Elias:
Look at your interest-rate, loan maturity, balloon if there is one, monthly payments and potential rents.
Yes, these are all being addressed. Thank you. - 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Ralph Pombo:
Jay, I like your reasoning. That makes perfect sense. Thank you.Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
So then what if you are buying under a trust? I have heard of people that do sub-to purchases all of the time without triggering the due-at-sale clause. If you are keeping up with the payments and no red flags are ever raised, why would they ever call the loan. They want to be paid and that is the main goal isn't it?Quote from @Stephanie P.:
Quote from @Ralph Pombo:
I could use some quick advice on a "subject to" since I have never done one before. This is a killer deal that will last less than 24 hours. I have a wholesaler that found a subject-to at a great price. There will be some cash up front by me, but I will take over the loan. The seller keeps the loan in their name, the deed goes into my name, but I have power of attorney to pay the loan. Tell me what to look for and which questions to ask. Any advice is welcome. Thank you.
Lots of pitfalls on this one.
If the deed is going in your name, the due on sale clause will be triggered. This isn't a case where the owner has an single member LLC and needs to transfer it from himself to his LLC, he's trying to sell you the property with financing that's not his to give. Ultimately, you'll have to qualify to take over the loan; it's not a given. The power of attorney will have to be approved by the lender.
Just one girl's opinion.
Stephanie
Keep in mind what you have in 95% of mortgages are events of default and one event of default is alienation of title which happens when you do a sub too. Now the lender at the Lenders SOLE discretion can then call all sums due and payable and or enter into a foreclosure. Other events of default are non payment of property tax's Waste and a few others.. but you get the drift. in reality you as the buyer has no real risk other than the few bucks your putting up to buy it.. the real risk is on the seller.. the risk of their credit getting trashed if yo dont make the payments and they dont have the money etc.
Most sellers should NEVER EVER do a sub too deal because of risk.
I have done quite a few sub too's in my day. and I have seen many go very bad for sellers in my day.. The buyer should have the ability to cash out the senior loan with either a quick refi or CASH out of pocket .. if they dont or cant.. then well its just another situation that could end up in a real mess. - Member since 2020 · 101 posts · 34 votes3y
Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
Jay, I like your reasoning. That makes perfect sense. Thank you.Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
So then what if you are buying under a trust? I have heard of people that do sub-to purchases all of the time without triggering the due-at-sale clause. If you are keeping up with the payments and no red flags are ever raised, why would they ever call the loan. They want to be paid and that is the main goal isn't it?Quote from @Stephanie P.:
Quote from @Ralph Pombo:
I could use some quick advice on a "subject to" since I have never done one before. This is a killer deal that will last less than 24 hours. I have a wholesaler that found a subject-to at a great price. There will be some cash up front by me, but I will take over the loan. The seller keeps the loan in their name, the deed goes into my name, but I have power of attorney to pay the loan. Tell me what to look for and which questions to ask. Any advice is welcome. Thank you.
Lots of pitfalls on this one.
If the deed is going in your name, the due on sale clause will be triggered. This isn't a case where the owner has an single member LLC and needs to transfer it from himself to his LLC, he's trying to sell you the property with financing that's not his to give. Ultimately, you'll have to qualify to take over the loan; it's not a given. The power of attorney will have to be approved by the lender.
Just one girl's opinion.
Stephanie
Keep in mind what you have in 95% of mortgages are events of default and one event of default is alienation of title which happens when you do a sub too. Now the lender at the Lenders SOLE discretion can then call all sums due and payable and or enter into a foreclosure. Other events of default are non payment of property tax's Waste and a few others.. but you get the drift. in reality you as the buyer has no real risk other than the few bucks your putting up to buy it.. the real risk is on the seller.. the risk of their credit getting trashed if yo dont make the payments and they dont have the money etc.
Most sellers should NEVER EVER do a sub too deal because of risk.
I have done quite a few sub too's in my day. and I have seen many go very bad for sellers in my day.. The buyer should have the ability to cash out the senior loan with either a quick refi or CASH out of pocket .. if they dont or cant.. then well its just another situation that could end up in a real mess.Luckily, refinancing is not an issue for us. We would take a huge hit on cash flow if refinanced today, but that is about the worst case in regards to that. The current loan is a low rate and that is one of the most appealing things about this deal.
- 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Ralph Pombo:
Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
Jay, I like your reasoning. That makes perfect sense. Thank you.Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
So then what if you are buying under a trust? I have heard of people that do sub-to purchases all of the time without triggering the due-at-sale clause. If you are keeping up with the payments and no red flags are ever raised, why would they ever call the loan. They want to be paid and that is the main goal isn't it?Quote from @Stephanie P.:
Quote from @Ralph Pombo:
I could use some quick advice on a "subject to" since I have never done one before. This is a killer deal that will last less than 24 hours. I have a wholesaler that found a subject-to at a great price. There will be some cash up front by me, but I will take over the loan. The seller keeps the loan in their name, the deed goes into my name, but I have power of attorney to pay the loan. Tell me what to look for and which questions to ask. Any advice is welcome. Thank you.
Lots of pitfalls on this one.
If the deed is going in your name, the due on sale clause will be triggered. This isn't a case where the owner has an single member LLC and needs to transfer it from himself to his LLC, he's trying to sell you the property with financing that's not his to give. Ultimately, you'll have to qualify to take over the loan; it's not a given. The power of attorney will have to be approved by the lender.
Just one girl's opinion.
Stephanie
Keep in mind what you have in 95% of mortgages are events of default and one event of default is alienation of title which happens when you do a sub too. Now the lender at the Lenders SOLE discretion can then call all sums due and payable and or enter into a foreclosure. Other events of default are non payment of property tax's Waste and a few others.. but you get the drift. in reality you as the buyer has no real risk other than the few bucks your putting up to buy it.. the real risk is on the seller.. the risk of their credit getting trashed if yo dont make the payments and they dont have the money etc.
Most sellers should NEVER EVER do a sub too deal because of risk.
I have done quite a few sub too's in my day. and I have seen many go very bad for sellers in my day.. The buyer should have the ability to cash out the senior loan with either a quick refi or CASH out of pocket .. if they dont or cant.. then well its just another situation that could end up in a real mess.Luckily, refinancing is not an issue for us. We would take a huge hit on cash flow if refinanced today, but that is about the worst case in regards to that. The current loan is a low rate and that is one of the most appealing things about this deal.
I get it so as long as you have the financial capacity to not leave the seller hanging in the wind then I would say go for it no problem. - Rental Property Investor · Rancho Cucamonga, CA · Member since 2020 · 15 posts · 9 votes3y
@Ralph Pombo From my knowledge, using a 3rd party servicing company for payments. & adding yourself to the insurance policy the seller has and add your own for extra security but not required. Those are the 2 major ones I've learned from Sub2 Community.
- 3yStephanie P.Pro MemberWashington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
Jay, I like your reasoning. That makes perfect sense. Thank you.Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
So then what if you are buying under a trust? I have heard of people that do sub-to purchases all of the time without triggering the due-at-sale clause. If you are keeping up with the payments and no red flags are ever raised, why would they ever call the loan. They want to be paid and that is the main goal isn't it?Quote from @Stephanie P.:
Quote from @Ralph Pombo:
I could use some quick advice on a "subject to" since I have never done one before. This is a killer deal that will last less than 24 hours. I have a wholesaler that found a subject-to at a great price. There will be some cash up front by me, but I will take over the loan. The seller keeps the loan in their name, the deed goes into my name, but I have power of attorney to pay the loan. Tell me what to look for and which questions to ask. Any advice is welcome. Thank you.
Lots of pitfalls on this one.
If the deed is going in your name, the due on sale clause will be triggered. This isn't a case where the owner has an single member LLC and needs to transfer it from himself to his LLC, he's trying to sell you the property with financing that's not his to give. Ultimately, you'll have to qualify to take over the loan; it's not a given. The power of attorney will have to be approved by the lender.
Just one girl's opinion.
Stephanie
Keep in mind what you have in 95% of mortgages are events of default and one event of default is alienation of title which happens when you do a sub too. Now the lender at the Lenders SOLE discretion can then call all sums due and payable and or enter into a foreclosure. Other events of default are non payment of property tax's Waste and a few others.. but you get the drift. in reality you as the buyer has no real risk other than the few bucks your putting up to buy it.. the real risk is on the seller.. the risk of their credit getting trashed if yo dont make the payments and they dont have the money etc.
Most sellers should NEVER EVER do a sub too deal because of risk.
I have done quite a few sub too's in my day. and I have seen many go very bad for sellers in my day.. The buyer should have the ability to cash out the senior loan with either a quick refi or CASH out of pocket .. if they dont or cant.. then well its just another situation that could end up in a real mess.Luckily, refinancing is not an issue for us. We would take a huge hit on cash flow if refinanced today, but that is about the worst case in regards to that. The current loan is a low rate and that is one of the most appealing things about this deal.
I get it so as long as you have the financial capacity to not leave the seller hanging in the wind then I would say go for it no problem.If the seller files BK for one reason or another, how does that affect the property? They still have a lien on title so does the lender have recourse, even though the seller sold the deed? I would think yes. If that's the case, the cash out of pocket and payments would be lost and the property would revert to the lender. One more thing that's out of the buyer's control.
- 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Stephanie P.:
Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
Jay, I like your reasoning. That makes perfect sense. Thank you.Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
So then what if you are buying under a trust? I have heard of people that do sub-to purchases all of the time without triggering the due-at-sale clause. If you are keeping up with the payments and no red flags are ever raised, why would they ever call the loan. They want to be paid and that is the main goal isn't it?Quote from @Stephanie P.:
Quote from @Ralph Pombo:
I could use some quick advice on a "subject to" since I have never done one before. This is a killer deal that will last less than 24 hours. I have a wholesaler that found a subject-to at a great price. There will be some cash up front by me, but I will take over the loan. The seller keeps the loan in their name, the deed goes into my name, but I have power of attorney to pay the loan. Tell me what to look for and which questions to ask. Any advice is welcome. Thank you.
Lots of pitfalls on this one.
If the deed is going in your name, the due on sale clause will be triggered. This isn't a case where the owner has an single member LLC and needs to transfer it from himself to his LLC, he's trying to sell you the property with financing that's not his to give. Ultimately, you'll have to qualify to take over the loan; it's not a given. The power of attorney will have to be approved by the lender.
Just one girl's opinion.
Stephanie
Keep in mind what you have in 95% of mortgages are events of default and one event of default is alienation of title which happens when you do a sub too. Now the lender at the Lenders SOLE discretion can then call all sums due and payable and or enter into a foreclosure. Other events of default are non payment of property tax's Waste and a few others.. but you get the drift. in reality you as the buyer has no real risk other than the few bucks your putting up to buy it.. the real risk is on the seller.. the risk of their credit getting trashed if yo dont make the payments and they dont have the money etc.
Most sellers should NEVER EVER do a sub too deal because of risk.
I have done quite a few sub too's in my day. and I have seen many go very bad for sellers in my day.. The buyer should have the ability to cash out the senior loan with either a quick refi or CASH out of pocket .. if they dont or cant.. then well its just another situation that could end up in a real mess.Luckily, refinancing is not an issue for us. We would take a huge hit on cash flow if refinanced today, but that is about the worst case in regards to that. The current loan is a low rate and that is one of the most appealing things about this deal.
I get it so as long as you have the financial capacity to not leave the seller hanging in the wind then I would say go for it no problem.If the seller files BK for one reason or another, how does that affect the property? They still have a lien on title so does the lender have recourse, even though the seller sold the deed? I would think yes. If that's the case, the cash out of pocket and payments would be lost and the property would revert to the lender. One more thing that's out of the buyer's control.
I never had that happen on one of my deals. But again if it did the buyer needs to simply payoff the loan or refi the loan. As you know BK's are their own animal if the BK trustee thinks there's equity for the BK estate maybe they unwind it. ??? I really don't know in that scenario.. To me though sub too is best for short term especially for the seller.. the Seller does not want a mortgage on their fico for umpteen years it could affect them in many ways and none of them good. So for us when we did them we rarely kept the sub too mortgage in play for more than 12 to 18 months.. but of course we were not paying anywhere near retail we would ONLY buy sub too just like any other deal we bought it had to have substantial equity enough that on day one if we needed to sell we cover sales costs and there was a nice profit for our efforts.. other wise it was not something we would entertain. I know right now for those with buy and hold on their mind they are lazor focused on getting low rate of interest for long term hold primarily. And as has been mentioned there is a lot more to these deals than just the buyers wishes. But if in some instance the deals do get UN raveled and buyer cant pay off mortgage they will certainly be out any cash they put into it and any rehab or repairs. - Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes3y
Quote from @Jay Hinrichs:
Quote from @Ralph Pombo:
Quote from @Stephanie P.:
Most sellers should NEVER EVER do a sub too deal because of risk.Correct.
- Member since 2020 · 101 posts · 34 votes3y
Quote from @Abram Torres:
@Ralph Pombo From my knowledge, using a 3rd party servicing company for payments. & adding yourself to the insurance policy the seller has and add your own for extra security but not required. Those are the 2 major ones I've learned from Sub2 Community.
Yes, I agree. I will be added to all insurance and the address for all communication with the mortgage company will also be sent to my address and not to the current address. Thank you for the suggestions. - Member since 2020 · 101 posts · 34 votes3y
As a side note to this conversation, tell me how income tax would work on a sub-to property. Does the seller retain all interest write offs? Does the buyer still get depreciation, write offs for maintenance, other write offs? Sorry, but this is my first sub-to purchase.
- Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes3yThe 1098 mortgage interest paperwork would be in the name of the seller. You need that document to know what taxes & insurance were paid.
Quote from @Ralph Pombo:
As a side note to this conversation, tell me how income tax would work on a sub-to property. Does the seller retain all interest write offs? Does the buyer still get depreciation, write offs for maintenance, other write offs? Sorry, but this is my first sub-to purchase.
I think you ‘own’ the property when the docs are signed. As a result, depreciation is yours as of that date.
In any event, speak to a title company & a cpa.
best of luck! - Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes3y
Speak to a CPA who is also a real estate attorney, if you can.
That said, my local colleagues are finding that as long as the payments are coming in reliably it's cheaper - and more profitable - for the lender to forego due on sale than to take the hit on income and foreclosure expense.
Their preferred form of "seller financing" is lease option to reduce the seller's tax liability due to depreciation recovery.
My $0.02 ...
- 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @David Dachtera:
Speak to a CPA who is also a real estate attorney, if you can.
That said, my local colleagues are finding that as long as the payments are coming in reliably it's cheaper - and more profitable - for the lender to forego due on sale than to take the hit on income and foreclosure expense.
Their preferred form of "seller financing" is lease option to reduce the seller's tax liability due to depreciation recovery.
My $0.02 ...
thats true with income property but owner occ property there is no depreciation so gets back to that situation It depends on the sellers situation. lease option for the seller is very good and if you structure the option payments correctly ( not the lease payments) the option payments there is no tax due until the option is exercised. - Investor · Milwaukee, WI · Member since 2016 · 20 posts · 15 votes3y
@Ralph Pombo
I just attended a masterclass taught by Jeff Watson who wrote the best paperwork for this and is taught by him and Eddie Speed over a 3 day course called the Creative Path Offer Boot Camp. I just attended the one day by Jeff and haven't bought the 3 day yet. Simplified, you buy the property Subject To the mortgage. You take over the payments and set up the deal as a trustee of a trust in a multiple member LLC. You use your own docs and your own terms. No bank loans.
There's multiple ways to give the owner incentive but is designed as a win-win to where you delay the payment to the seller rather than them taking the lump sum and incurring a large tax bill. You pay them over a 20 year term with a variable step interest rate.
I would google Jeff Watson and Eddie Speed and at the minimum buy Jeff's forms from him. $987. Hope this helps. He taught this today at the Milwaukee REIA.
- 3yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
Quote from @Joseph Tjader:
@Ralph Pombo
I just attended a masterclass taught by Jeff Watson who wrote the best paperwork for this and is taught by him and Eddie Speed over a 3 day course called the Creative Path Offer Boot Camp. I just attended the one day by Jeff and haven't bought the 3 day yet. Simplified, you buy the property Subject To the mortgage. You take over the payments and set up the deal as a trustee of a trust in a multiple member LLC. You use your own docs and your own terms. No bank loans.
There's multiple ways to give the owner incentive but is designed as a win-win to where you delay the payment to the seller rather than them taking the lump sum and incurring a large tax bill. You pay them over a 20 year term with a variable step interest rate.
I would google Jeff Watson and Eddie Speed and at the minimum buy Jeff's forms from him. $987. Hope this helps. He taught this today at the Milwaukee REIA.
I did Google, Jeff Watson… Do you realize how many Jeff Watson‘s there? do you have a link?
- Investor · Milwaukee, WI · Member since 2016 · 20 posts · 15 votes3y
@Joe S.
"Jeff Watson Lawyer Subject To"
- 3yJoe S.Pro MemberInvestor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votesNothing pulls up with that. There is some Jeff Watson that is talking about Wholesaling, but that is not the conversation at hand
Quote from @Joseph Tjader:
@Joe S.
"Jeff Watson Lawyer Subject To"
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