Posted by Tony on December 27, 2003 at 11:56:14:
I am new to the site and been reading a lot of the articles. They are very interesting and educational. I came across one that caught my attention right away, cause I can relate to the subject matter. Here is the link “http://www.creonline.com/money-ideas/mm-053.html”. Title: "I can’t do this where I live"
In this article the author talks about problem solving as a tool to generate cash flow. He lays out a very realistic scenario where the person recently bought a high end residential home ($400K+)of course in my area high end means $850K+
A year later due to some unfortunate reason this person becomes a ?desperate motivated seller?. To make the long story short the article mentions that you need to step in and convince the seller to take over his mortgage payments ?Subject to?. What does ?Subject to? means? Are we talking about assumable mortgage?
Then the article suggests finding another buyer, offering them an owner financing at higher rate for two years to generate monthly cash flow.
Here are my questions:
1-If I take over someone?s mortgage, how do I get around the ?due clause? on the mortgage contract? Unless this is an assumable mortgage.
2-Once I sign the new buyer with the new financing terms who is the legal owner of the property at this time (me, the new buyer or the original owner)?
Of course in my area (Staten Island NY) finding an assumable mortgage on a high-end real estate would be almost none-existent. Also finding motivated sellers are impossible, since there is a huge shortage of housing. If you need to sell there are plenty of people out there that pay your asking price or even more.