Subject to deal concerns

[Giovanni Di Puglia]

BP members,

Here is the situation: A friend of mine who is in the military has a property in Killeen TX as the result of her divorce. She wants to dispose of the property and I told her that I may take it off her hands as a subject to deal. After she researched the specifics, she had agreed. Now here is my concern, the mortgage is held by Wells Fargo and it is a VA guaranteed loan, which I have been told come with additional hurdles. Also, while the property is in outstanding conditions, only need new paint and carpet needed, monthly rent will cover the mortgage itself, very little ($25) as positive cash flow. While I locate and attorney to draw up the paperwork in San Antonio TX, where I am at, wanted to hear the comments, consents, or questions you may have.

[Rick Pozos]

I dont usually recommend sub-to to hold for long term rentals. She will not be able to get a loan for several years. Due on sale is always a concern in the long term.

You can overcome these  by putting the property in a land trust.

99% of the attorneys will tell you that you have to assume the loan. I assume that you dont want to assume the loan. After I know that title is clear, I do the paperwork to set up the land trust myself. There are of course some disclosures that you need also. 

Lots of work to make this happen just right. It is usually easier to just get the deed in your name, clean it up and get rid of it. Too much trouble for very little equity. Just help her sell it retail.