Retaining original owner on deed on a sub to deal

[Russell Smith]

Hey friends! 

I am attempting to structure a deal where I am added to a deed as a 50% owner. I would assume all aspects of management including finding renters, maintence, paying the mortgage, etc. The original owner of the home would retain his 50% equity and be completely hands off. We would keep his mortgage. 

If the owner is still present on the deed (though my name would be added) would their be a concern for the due on sale clause to be called? Also, when adding my name to the title, is there a way to stipulate equity ownership? Thank you thank you for any insight from those who have experience w/ sub to!

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Quote from @Russell Smith:

Hey friends! 

I am attempting to structure a deal where I am added to a deed as a 50% owner. I would assume all aspects of management including finding renters, maintence, paying the mortgage, etc. The original owner of the home would retain his 50% equity and be completely hands off. We would keep his mortgage. 

If the owner is still present on the deed (though my name would be added) would their be a concern for the due on sale clause to be called? Also, when adding my name to the title, is there a way to stipulate equity ownership? Thank you thank you for any insight from those who have experience w/ sub to!

Going 50 / 50 on ownership is a bad idea. When the time comes that you are no longer on each other's "good guy" list, neither of you can cause the property to be sold or make other decsions. Make it 51 / 49 and avoid problems.

The escrow company can prepare the deed for you. 

Here is how one Due on Sale clause reads. You have to look at the Deed of Trust for the loan in particular to find out what that one says. They can be different.

19. Transfer of the Property or a Beneficial Interest in Borrower. For purposes of this Section 19 only, “Interest in the Property” means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract, or escrow agreement, the intent of which is the transfer of title by Borrower to a purchaser at a future date.

I've written about it at the link below