Subject To - Best Way & Common Issues

[Michelle Rukny]

Hi everyone! 

So it's officially here, my first transaction as an investor! My nerves are shot but I'm excited too! I wanted to know what your best practices are in regards to paperwork and how you include the "fee" paid to the seller on paperwork. Title is backed up because of holidays so I'm not getting much help or advice there. 

Does the purchase price include the fee to seller or is that negotiated separately? What are some common issues you have had with these types of transactions?

Specs: 

$40K takeover (including seller fee and delinquent balance)

Loan Balance after 40k contribution is $187K.

So is the sales price $187K, $227k or $227 (minus the seller fee)

Thank you in advance and your advice is greatly appreciated! 

[Guy Gimenez]

@Michelle Rukny

Not sure how this thread went from Sub-To to L/O, but they are not one in the same.

I highly recommend you either partner with a seasoned investor or pay an attorney to get you through your first few deals until you are better versed in creative strategies and other aspects of investing. There is a common theme in REI..."how hard could it be?" Many of those get the answer after the fact and it's not pretty. I commend you for recognizing you're not quite ready to go at this without help, but jumping in with both feet without understanding contracts, surveys, title commitments or the closing process may get you thrown under the bus before you even get started in investing. Find a solid mentor, coach or attorney and learn while you earn.