Posted by Jim Kennedy - Houston, TX on July 10, 2002 at 07:53:04:
Jeff,
Thanks for taking the time to submit your response. I think your post included everything necessary to clarify your original meaning and explain what you meant.
Based on reading other posts you’ve written, I was pretty sure that I knew the intended meaning of your original comment.
Because so many “newbies” visit this site, I think it’s important that the responses be as accurate as possible. Thanks again for being gracious enough to clarify your point.
Best of Success!!
Jim Kennedy,
Houston, TX
Buying “Subject to” Term Ouestion - Posted by Paul
Posted by Paul on July 08, 2002 at 17:16:37:
On a “subject to” purchase , with the intention of placing a Tenant/Buyer via a lease/purchase in the property, what is a typical # of years you would negotiate with the seller?
Thank you,
Paul
Re: Buying “Subject to” Term Ouestion - Posted by Brian M. Powers(MI)
Posted by Brian M. Powers(MI) on July 08, 2002 at 17:31:07:
there really isn’t a “term” when taking subject to. you are in effect buying the house. you are now the owner. the only term that is left is the term on any underlying mortgages on the property which you assume as well.
BMP
Re: Buying “Subject to” Term Ouestion - Posted by jeff
Posted by jeff on July 08, 2002 at 17:30:12:
a subject to purchase doesnt go on a set number of years determined by YOU, it uses a set number of years determined by THE BANK. when yuo take the property subject to, what you are actually doing is asusming the loan in a less than legal way and hoping you dont get caught. the remaining years left on the loan is your term for your purchase.
as far as your T/B, you need to do less than 5 years in order to not get into the equitable interest battle if you decide to evict later. anythign over 5 years can be considered a sale and not a lease and can give yuor T/B equitable interest and prevent you from simply evictnig them for nonpayment or other infraction to the lease. 1 year is best for this setup, but generally, shorter terms are better for YOU as the landlord.
if you are negotiation a L.O on your purchase from the seller, then you need to go for more years. preferably 30 if theyll allow it. LOL but more is better in this situation. mkae sure you get renewal rights from your sellers for as many times as you can manage. but only give 1 or so to your buyers on this same system.
Unfortunate choice of words. - Posted by Jim Kennedy - Houston, TX
Posted by Jim Kennedy - Houston, TX on July 09, 2002 at 05:51:51:
Jeff,
I’m sure it’s just a poor choice of words when you wrote “when yuo take the property subject to, what you are actually doing is asusming the loan in a less than legal way and hoping you dont get caught.” (sic)
Done correctly, there is nothing “less than legal” about buying property subject to.
Done correctly, buying property subject to is perfectly, absolutely, totally, 100% legal.
Best of Success!!
Jim Kennedy,
Houston, TX
Re: Unfortunate choice of words. - Posted by jeff
Posted by jeff on July 09, 2002 at 15:01:32:
snice i got more than one complaining e-mail over my word choice ill explain further, mi getting tired of explaining one on one in e-mail. LOL
i know you are not assuming the loan. the loan stays in the original borrower’s name and he lender has no clue you are now making the payments, usually. the less than legal way i was talkign abuot has nothiogn to do with the LAW, more of contractual “law”. the DOS clause is violated by you taking over the payments from the original borrower without permission from the lender. this violates the clause because part of the equitable interest in the property is now tranferred to another party other than the originals borrower(s).
it is 100% legal, YES, but it is not doing things accordnig to a signed contract that the origianl borrower signed and had notarized and then filed in the public records. they signed saying that they will make the payments AND will not transfer any interest in the property to anyone else. they violate this clause and thus, it is less than legal as far as contractual law is concerned. i know you can use land trusts to hide the sale, but hidden or not, it is still a sale and will still violate the clause. no law was broken, noone goes to jail, noones gets fined, but the loan can be accelerated if the lender feels it necessary IF you are caught.
i am completely positive that you know ALL of this plus alot that i dont, Jim. i have answered this same question in private emails abuot 10 times now. i figured id better answer one publicly so i can stop answering this for the rest of my life. LOL
did i leave anything out?