Subject to deals: who do you pay?

[Ryan Sanders]

I might be getting a deal sub2 original loan, but I'm unsure who I would pay if this happens. Do I pay lender directly? Or the seller? Or do I even go so far as to pay a 3rd party who then pays lender? If the last option is the best one, where would I find someone like this?

Thanks for any help as always!!

[Jay Hinrichs]

from a sellers perspective you want the sub too buyer to pay you directly then you continue to pay the bank.. this way you know in real time if your sub too buyer defaults on a payment and would risk you as the sellers fine credit.

as the buyer you can set up third party servicing if you wish.

the risk here is the Seller not the buyer.. if the buyer defaults they deserve to lose any money or equity they have in the property.. Although I have seen instances were a seller kept the buyers money and never paid the bank.. and the sub too buyer did not realize this until they got a notice of default.

Now in this case with AITD in CA the law allows you to cure and wipe out any seller equity they may have.

Sub too is an advanced strategy highly risky for sellers and one that needs to be thought through.. what I see on BP is beginners with little capital to invest or reserves try to do this because of the thought of no money or very little out of pocket and  a loan that is not in their name or fico.

so this leads the least knowledgable and experienced investor into what can be a complicated transaction and Frankly a lot of sellers in this model get totally abused and hosed and do not realize the danger they put themselves into until its too late.