Brian, Offer to buy their house for the balance of their mortgage and promise to bring the loan current. Explain that you will be taking over their debt and will make all the payments, but that the loan will still remain in their name. This will save their credit and prevent foreclosure. When you meet with them, have them deed the house to you and also have them sign a CYA letter that explains that the loan will still remain in their name. Also get an Authorization letter from them that allows you to communicate with their mortgage company, as you will need this to get information from the lender. By the way, the Deed needs to be notarized, so either bring a notary with you or take the seller to a bank or city hall, wherever there is a notary, for the signing of the deed. You will need to contact the mortgage company right away to verify the amount of the arrearage and make arrangements to bring it current. You can do your title work in the days immediately following your meeting with the seller.
Seller Owes $133K
House appraised for $150K.
Seller has a $922/mo first and a $276/mo. second.
4 BDRM, Basement, Block from the water, 1100 sft, updated, needs no work.
I could L/O this home easily for $1400/mo for $155K. Seller is 2 months behind in payments. I know this is a “get the deed” situation and not a L/O but I havent been able to study my Subject-To course yet. IF anyone out there who has substantial Subject-To experience would be willing to help me structure this and walk me through the process it would be great.
How do you KNOW you “could L/O this home easily for $1,400/mo.”? It’s sometimes real easy, too easy, to go around getting deeds from people BECAUSE the property is difficult to rent out, yes even on a L/O, with enough profit spread to make it worth your while.
Unless you’ve got a Tenant/Buyer’s money IN-HAND already, you never KNOW what you can L/O the house for unless either YOU have other rentals in the neighborhood or you personally know some other investor who has several rentals in the neighborhood.
I don’t mean to sound negative, I just want to help you avoid some negative cash flow on a potentially vacant house. They don’t address that too much in “Seminar-Land”… By all means, go do some deals, just be careful out there…