Real Estate Investor · Atlanta, GA · Member since 2009 · 117 posts · 7 votes
When wholesaling a subject to deal, are you assigning your subject to deed for a fee before putting a tenant in the property? are you finding the deal, then selling your lead? exactly, what is the basic process of wholesaling a subject to deal. ive heard that people do it.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
OK, forget about the subject to aspect for a second. You find a deal and wholesale it using an assignment. You (B) have a contract to purchase from a seller (A). Your buyer (C) makes an assignment contract with you for the amount of your fee. You assign your contact with A to C. You take all the paperwork to a title company. C brings the cash. Neglecting costs, this is the purchase price plus your fee. C buys directly from A, as a result of the assignment. A gets the amount they agreed to take. You get the amount of your fee. C gets a deed.
Now, with a subject to, A's probably not getting any cash. C would still bring enough cash to cover your fee. C buys from A, gets the deed and takes over A's loan. You get your fee from C.
Investor · Houston, TX · Member since 2014 · 5 posts · 2 votes
2y
Just as an update to this topic, I've discovered from an attorney friend of mine that if the person you sold a subject-to deal defaults, don't think youre out of the deal and have no liability. An Attorney General can convince a jury that taking a property subject to, taking cash and walking away to leave the seller to deal with a problem they thought YOU solved is unfair or deceptive. And don't think the contract will protect you, as the law can overide certain contracts if they are considered unfair and deceptive. Always do your best to be ethical and avoid doing anything that will create laws which hurt investor business practices (such as creating more problems for the seller). If you find yourself in this situation, get back in there and solve the seller's problem, it's the right thing to do. Or simply don't wholesale subject to deals.