Posted by Joe Peshie on March 24, 2004 at 10:12:12:
I’ve never actually SEEN a grit before…
subject to question? - Posted by redtboa
Posted by redtboa on March 21, 2004 at 20:51:40:
is there an actual closing with a title company or an attorney on a sub2 deal? or do you just get purchase contract and deed signed and record deed and begin making payments? also what about turning around and selling the same property with owner financing? is there a closing, or again just get signed purchase contract and record the mortgage? i know there would be a definate closing when the person you offered owner financing to refinanced to cash you out. but what about the first and second instances?
thanks
eric
Re: subject to question? - Posted by Larry TX
Posted by Larry TX on March 22, 2004 at 08:25:40:
Closing yourself on your first subject-to strikes me as a very bad idea. The risks are huge, and the savings just do not justify taking them. Why not close with a Title company, and consider the expense as part of your REI training?
Re: subject to question? - Posted by Brent_IL
Posted by Brent_IL on March 21, 2004 at 22:33:19:
All of this self-closing stuff is great after you have done a couple, but my thought is that if you are asking this question you have no business doing a settlement by yourself at this time. Are you going to order title insurance? Are you going to do a comprehensive title search? Are the documents being used copied from a forms book or being downloaded? Who is going to prepare them? HUD-1 prorations?
You may get it right and save a few hundred dollars, or you may miss a lien, a judgment, or something else and end your CREI endeavors before you really get started; it?s a choice that?s yours to make. Were it me, I’d negotiate harder with the seller and use the reduction to pay for a closing agent.
I?d still advise having a title company or an attorney to do the title search. One opinion.
Re: subject to question? - Posted by eric the wunderwurm
Posted by eric the wunderwurm on March 21, 2004 at 21:58:19:
You can close a sub2 either way, unless your state has a law requiring it be done at a Title Co. or attorney’s office. Like Ashian, I prefer the self-closing. All it takes is a notary. Email if you have specific questions about which docs to include in your closing, etc.
As far as closing an owner finance, same thing, it can be done either way.
Re: subject to question? - Posted by Ashian
Posted by Ashian on March 21, 2004 at 21:15:41:
Hello,
“is there an actual closing with a title company or an attorney on a sub2 deal? or do you just get purchase contract and deed signed and record deed and begin making payments?”
The cheapest way to do a closing for me is a bank. Just have the Notary Public at do there thing at closing. In Oklahoma it is free for that service. (or maybe the ladies like me a lot)
If you are short on cash for the ?moment? I would not suggest that you get the deed recorded until your new buyer gives you the down payment for the house you just bought. You I wouldn?t make a payment or give them their money until the house is vacated.
?also what about turning around and selling the same property with owner financing? is there a closing, or again just get signed purchase contract and record the mortgage??
The closing with your buyer doesn?t happen until they refinance.
The paper(s) they sign initially is the contract for deed. Meaning your buyer has to fulfill their end before they get the deed recorded in their name. Ex: making payments on time, refinancing within a certain time frame, etc.
Hope this helps.
Re: subject to question? - Posted by ericthewunderwurm
Posted by ericthewunderwurm on March 22, 2004 at 13:16:53:
Why does it strike you as a bad idea? The risks are not huge. If you can rebuild a carburetor or write HTML code, you can cover all bases needed for a closing. It’s a matter of being detail-oriented and staying focused, triple-checking everything.
Have you ever done a closing yourself? If I save $600-$800 by doing it myself, then I feel like the savigs are justified, b/c I know I will do it right, and it doesn’t take much time.
Re: subject to question? - Posted by Ashian
Posted by Ashian on March 22, 2004 at 12:47:43:
“Closing yourself on your first subject-to strikes me as a very bad idea. The risks are huge, and the savings just do not justify taking them. Why not close with a Title company, and consider the expense as part of your REI training?”
The point I am trying to get accross is that it is SUBTO; not forclosure, rehab, or wholesale.
(and yet again) If you do not have the funds to close true a title co. then this way is cheaper. Personally I use a bank everytime and I am not in the uninvestor line.
Re: subject to question? - Posted by Ashian
Posted by Ashian on March 22, 2004 at 06:07:34:
“Are you going to order title insurance?Are you going to do a comprehensive title search?”
If an RI has little funds just stay w/ homes w/ young mortgages. Perform your own title search on them.As money grows you can pay for more.
Are the documents being used copied from a forms book or being downloaded? Who is going to prepare them?
Somewhat both. Your are making your forms state friendly by changing obvious info like year, state, county, ect. You could also just copy that same document or number of documents from a courthouse.
HUD-1 perorations?
As “needed”. Same as closing docs, I do my own. Just make it state specific.
Re: subject to question? - Posted by redtboa
Posted by redtboa on March 21, 2004 at 21:58:50:
great comment, thanks for the input, what will be requred from me (contract, deed, ect.) for the bank notary public to “do their thing”?
eric
Re: Finally! someone who understands! - Posted by Ashian
Posted by Ashian on March 22, 2004 at 18:58:38:
I knew I wasn’t the only one who did SUBTO.
Re: subject to question? - Posted by Larry TX
Posted by Larry TX on March 22, 2004 at 15:50:26:
Did you rebuild your first carburetor by yourself, without any guidance? What was the worst possiable out come. Maybe it’s just me, but I’d like to see it done once right before I try to do it myself. I would then consider using that as a template. I can do a generic title search myself, but I would still buy the title policy.What happens if he closes five or six houses and then discovers that he had made the same mistake since house one. There are enough risks, I just do not see the need to volunteer for more than I have too.
Re: subject to question? - Posted by michael
Posted by michael on March 22, 2004 at 07:05:42:
IMO, this is seriously bad advice to give to a newbie. “Young mortgages” almost exclusively have no equity to speak of, so you’re telling folks to search for, by definition, bad deals. On top of that, you’re advising folks who don’t know what they’re doing to do their own title searches. That is a sure way to disaster.
Managing risk is a big part of this business, and one does not last in this business by taking risks that have the potential to knock you out of the game. If one doesn’t have the money to pay for a proper title search, then one doesn’t have the financial whetheral to be doing deals.
You only have to scan down the board to Michaela’s post about the importance of title searches and insurance, to realize what I’m saying is true. Two attorneys, experienced attorneys, fouled up a title search, and you want to advise new folks to do their own searches? Crazy.
Re: subject to question? - Posted by Ashian
Posted by Ashian on March 22, 2004 at 06:21:35:
Hello,
The best way to get the docs and understand them is to get a subto manual because it will explain how and why to use them. But I could give it a try.
let me know how you want to go about doing this.
Re: Finally! someone who understands! - Posted by Tom(MI)
Posted by Tom(MI) on March 22, 2004 at 21:58:32:
You do understand that Sub To is just a form of financing, right?
Re: Finally! someone who understands! - Posted by michael
Posted by michael on March 22, 2004 at 19:05:55:
You are not getting it. No one is saying subject to deals are bad, it’s the high risk way you do them, especially for undercapitalized newbies that is bad.
Re: subject to question? - Posted by eric the wunderwurm
Posted by eric the wunderwurm on March 23, 2004 at 24:30:43:
Did I claim to have done my first closing with no guidance? No.
Would I suggest anyone else do it with no guidance? Of course not.
That’s why I have an email address that a newbie can write to, that’s why this message board is a good thing, etc.
Re: It is STRICTLY a sub2 thing. - Posted by Ashian
Posted by Ashian on March 22, 2004 at 18:51:50:
carburetors are old and my methods are new. If someone cannot follow “simple” instructions thin this is not the business for them.
Again…Look people are making it HARDER than what it really is.
I’ve bought and sold my first house and All my houses this way and I’m still here.
Re: Are you really reading? - Posted by Ashian
Posted by Ashian on March 22, 2004 at 12:37:08:
“this is seriously bad advice to give to a newbie. “Young mortgages” almost exclusively have no equity to speak of, so you’re telling folks to search for, by definition, bad deals.”
Well, my friend, are you done venting?
If said house had little to no equity then to a sub2 investor it is a $10.00 deal. Sub2 investors know this. We have little to no copmetition because other investors (not all) that invest in other areas of RI think the house is a “bad Deal” because the house has a “Young mortgage”
“On top of that, you’re advising folks who don’t know what they’re doing to do their own title searches. That is a sure way to disaster.”
Since the house has a “young mortgage” that means the institution that financed the seller required a clear title. i.e you don’t need to go back far and check for clear title(in OK anyway). Just check at the courthouse.
“Managing risk is a big part of this business, and one does not last in this business by taking risks that have the potential to knock you out of the game. If one doesn’t have the money to pay for a proper title search, then one doesn’t have the financial whetheral to be doing deals.”
Thats the goooood thing about sub2 investing there is little to no ummm… whats that word? …Risk.
I have spent as little as $25.00 out of pocket for a house that was built in 98. that is including advertising, gas, and the $10.00.
However, if the mortgage is older then yes, I would pay for a title search, But it is very rare.
P.S. Still soud crazy?
Well call me that$$$$$
Re: Finally! someone who understands! - Posted by Ashian
Posted by Ashian on March 23, 2004 at 05:47:00:
I have been doing SUBTO for a long time now and I think I pretty much know how it goes.