Subject To - Posted by Mike

Real Estate Investing Real Estate Law
1

Posted by William Bronchick on June 27, 2011 at 11:15:39:

Just deed it straight from the seller to a trust which
you are the beneficiary. Insurance is changed to reflect
the owner being the trust.

2

Subject To - Posted by Mike

Posted by Mike on June 23, 2011 at 09:41:29:

I tried to listen to the answers on the page “Top Ten Legal Questions–Answered!”, but was unable to get any of the audio to play.

Here is my question about a “subject to”. I hear a lot about taking the property subject to, and then installing a lease option tenant.

I realize by reading Bill Bronchick’s article, that putting the property into a land trust and then having the seller assign the beneficial interest to you helps to avoid the ‘due on sale’ clause.

However, what if somehow the lender does enforce the due on sale clause, and you have a lease option tenant in place? Is your only option to refinance the property because you must legally honor the lease/option you signed with the tenant?

Is there any other solution? Thanks

3

Re: Subject To - Posted by Bill Bronchick

Posted by Bill Bronchick on June 26, 2011 at 20:10:57:

You must then refi the property and honor the
lease/option with the tenant/buyer. This is a risk you
must be willing to take. My experience has been good,
never a lender calling in a loan.

4

Re: Subject To - Posted by Mike

Posted by Mike on June 27, 2011 at 08:34:21:

Thanks Bill.

Do you think the best way to do “subject to” is to have them put the property into a land trust with them as beneficiary and see the lenders reaction/inquiry (if any)? Or, is this really unnecessary?

Then if all is OK, have them sign the beneficial interest over to me?

This seems like it would avoid any closing, courthouse recording fees, or any fees for that matter, correct?

How does one handle property insurance, put it in the name of the trust and pay from a checking account that says for example “123 main street trust”?

Thanks for your feedback