Subject-To with down payment : working with a wholesaler

[Ethan Dugan]

Hello BP!

I am a newer agent and investor and I am working with a local wholesaler in the Toledo market and there is a deal that can be taken subject-to the existing loan with the sellers requesting 9K up front. The wholesaler is flexible on the fee as to whether it is all up front or some now and the rest (more) on the back end, depending on if the property is resold immediately or I lease option it. That said, I am looking for a few pieces of advice in addition to anything else that would make this a smooth transition. I would like to put the house into a trust, with my LLC as the beneficiary and do have paperwork but no experience with this type of transaction.

The sellers (3 siblings) have requested a letter of intent to purchase and are working with a lawyer as this house was in probate for 3 years. I intend to send the letter this week.

1. For structuring the deal, how would he assign this properly as only a partial cash offer? is it a standard assignable contract? An option? My other thought is to just use seller financing for the PITI each month and put the money in escrow to be paid to the loan servicer.

2. With the purchase agreement being signed and assuming a subject-to, I believe I need to have an authorization to release information, a loan information sheet and a lender payoff request. For the closing, limited power of attorney, a letter appointing a management, assignment of escrow, acknowledgements and disclosures for the seller to show they understand what they are signing, land trust paperwork, notice to the lender?, assigning a trustee with a declaration and affidavit of land trust (Will plan to use the title company for this part) and an assignment of beneficial interest.

I want to do this right, so please share your experiences and comments. 

Thanks so much,

Ethan Dugan

iLink Real Estate Co.