Subject To / Get the Deed

  • This technique involves the seller deeding the home over into a Land or Private Trust Account and then assigning over to you, or your LLC, the beneficial interest of that trust, “Subject To” their mortgage.
  • This helps to avoid the Due on Sale Clause, if one exists on the sellers mortgage document. Does not eliminate the risk 100%, of the lender finding out and calling the loan due, and it does reduce the risk significantly. I have never had a loan called due since being in business from 1983.
  • This generally includes the seller making the next 2 mortgage payments. To give you the investor time without cost, to locate a lease option buyer for yourself, to cover the monthly cost.
  • You then agree beginning of the third month to start paying the seller’s monthly mortgage payment. Sometimes I go longer, and sometimes until, I find my tenant / buyer.
  • “Subject To” advantage over “Lease Option” is you fully control the property as the owner. With a “Lease Option” you still need the owner to sign papers, and deed the property over when your tenant-buyer is ready to qualify for their mortgage.
  • You do have more up front cost due to the Land Trust Account with the bank.
  • A Private Trust is one you hold yourself in your own office. No fees to pay to someone else. I have a course that explains how to establish, and operate a Private Trust in detail.

Mentor TIP – If the monthly cost P.I.T.I. is more than you can rent the property for and have a $200 a month cash flow, have the seller cover part of the mortgage payment until your lease option buyer qualifies for their mortgage and closes on their purchase from you.

I actually use a combination of the “Subject To” and Lease Option” technique. The best of both techniques to maximize my benefit and protection. I share this completely in my Motivated Seller’s Business Course Apprentice Fast Track.

September 21, 2017

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