How to do a subject to deal

Question

I have a property under contract with a woman who still has a 40k mortgage on the property. And I have a buyer who wants to do a seller financing or subject to financing on the property after putting 5k down I am not sure how I should handle this. Should I just handle it as a lease option or are there any subject to contracts that I can use. All help will be greatly appreciated.

Thank You!

Eric Renney · Answer

How is Fl for this type of strategy. I am looking at doing one of these deals soon. Should this type of contract be written up by an attorney? Do you have to let the mortgage holder (bank) know that you will be making payments and what not? I was under the impression that that would be "assuming" the loan.

Brian Gibbons · Answer

@Kennedy Williams  I would hear @Ellis San Jose message.  TX is a place not to use someone else's contract.

See @John Jackson posts, as he is in TX.

The penalties are severe in TX.

Best to you,

Brian

Ellis San Jose · Answer

@Kennedy Williams

First, congratulations on having a property under contract.

Your question is really much too complex to handle in a post in my opinion.

Texas has very strict lease option statutes that you must be educated about before implementing haphazardly.  Same with Subject-to acquisition, it is one of my favorite acquisition techniques and is fraught with very serious ramifications and risks. I suggest that you do your homework and educate yourself before you use someone's contract that you don't fully understand.

Windie G. · Answer

Hey well to start I have never done a subject to but  I have been doing alot of studying trying to laying the foundation for my business. So that when it takes off I will feel well prepared.

Well from what I have learned in my studies. For a 'subject to' you would have the title company write up a Special Warranty Deed which simply transfers the title. Unlike A General Warranty Deed guarantees clear title.

Also since the existing mortgage is in place you should have the owner sign a Paper Authorizing you the right to talk to the mortgage company.

One article said that you should have them sign a paper saying that your agreeing to take the payments. but your allowed to have renter in the property and they have no rights to the rental money. that you could sell the property, and they have not rights to profits. The agreement should also stipulate that they have a right to have it reviewed with an attorney.

I hope that helps a little. I have been looking into subject to properties because I am trying to find new ways to market. So I can acheive my goal of flipping my first house.