Is this possible (subject to and resell outright / contract for deed)

[Dustin M.]

Hi guys,

Second house is almost done being rehabbed. I hope to have it sold outright / contract for deed by the end of February. Things are doing really well and I think I'm still on track to buy / sell 4 homes this year (which was my original goal for 2010).

Right now I'm looking at a piece of property and some help would be appreciated :D

The seller is pretty motivated to get out of a property for $60,000. It would sell for around $100,000 with a few minor fixes.

I offered $0 down and monthly payments of $500 for 10 years at 0% interest. There is a pretty good chance that he will take it. The owner currently owns the property outright.

Question 1: If I buy the property with the terms I described above is this a "subject to" transaction? My guess it isn't because there isn't an existing loan on the property because he owns it outright. If it isn't a "subject to" transaction what is the correct term for this type of transaction?

Question 2: I'm also guessing that the seller put a lien on the home until I make the final payment and completely repay him. Is this correct?

Once I buy the property I plan to fix it, and sell it outright or contract for deed.

Question 3: Will I be able to sell this property outright if someone has cash or needs to get a loan thru the bank. I've read on here about seasoning (which is a time period you have to hold on a recently purchased property before it can be resold to someone who needs a loan)? Would seasoning apply even though the original seller owned the property outright?

Question 4: If I am allowed to sell the property outright do I have to pay the original seller the rest of the money that I owe him at closing? For example, say I own the place for two months and make two $500 payments to the original seller. I then find a buyer who is willing to pay me $100,000 for it. At closing do I have to pay the original seller $59,000 (which is how much I still owe him)?

It would be in my best interest not to have to pay the original seller at closing because I have a 0% interest loan from him. I could use this extra money to finance some more deals. If I don't have to pay him at closing would the original seller still have a lien against the property that I sold to the end buyer? What would happen in the case where I stopped making payments to the original seller. Would the original seller be able to go after the end buyer to get the money that I was unable to pay him?

Question 5: If I can't sell the place outright I would also consider selling it contract for deed. Since I'm acting like the bank seasoning rules wouldn't apply selling the place contract for deed correct?

Question 6: Anything else I might not be considering for this type of transaction?

I hope I didn't ask to many questions. Like I said before any help would be appreciated. I haven't ran into the situation I'm in before (or seen a post like it on this website yet). I think I'm in a great situation considering that the original seller might give me a 0% interest loan over 10 years! It sure beats just coming up with $60,000 out of pocket lol.

Thanks in advance,

Dustin Michaels