Quote from @Account Closed:
Quote from @Alan F.:
Quote from @Account Closed:
Quote from @Alan F.:
Quote from @James Hamling:
Pardon my ignorance, what happens if the seller stops making their mortgage payments? Suggestions on learning more about contract for deed? TIA
No problem. The whole point of this post is to answer questions like yours. Good question by the way.
In a Subject To, it isn't the seller making the payments. The seller is out of the picture.
The real question is what happens if the buyer stops making the payments: The property goes to foreclosure and the seller's credit gets trashed. The seller then can sue YOU!. You can also be referred to the State Attorney General for fraud. Don't miss any payments.
Your question: "Suggestions on learning more about contract for deed? TIA" \
That is an Executory Contract
- Executory Contracts by definition violate the same Due on Sale that just got called
- Here is the actual wording of the Due on sale clause
18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "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 at a future date to purchaser.
Thanks, I got the impression there was a difference between contract for deed and subject to.
There is a big difference between them.
The key element is :"
the intent of which is the transfer of title"in law,
the intent can be the determining factor, it doesn't have to actually occur or be done in a specific manner.
You can speed because you have your foot down too hard on the pedal or you can speed because you are going down hill. You're still speeding.
Thank you for all your insight.
So I’m on of Pace Morbys “students” I didn’t pay I just followed around the videos and Facebook group and now I’m quite worried about this deal that I’m committed to.
I have a deal that I am supposed to close on in 2 days.
Here’s what’s happening, seems like a subto student picked up a sfh for 4K and is paying the owners mortgage.
he then decided he would not continue to do so, and listed it as “take over payments” on Craigslist, for 17k. (His profit is in the entry fee) He owes 3 months missed payments and I offered to catch up the arrears, bring the loan current, and take ownership.
I myself own and operate 13 units since 2017, and I’d say I’m a good operator.
Anyways, the issue is that now the bank/owner has been notified of non payment, and while the seller is telling me everything’s fine between him and the person on the note and all, I know that the bank has eyes on this account now.
I'm sure even with a reinstatement (closing attny is working to get that), that this is not looking good for me once I become the beneficiary in the trust (the contract is for land trust beneficiary interest) of which my LLC would be 100% owner.
I’m sure you all can see the issues that can arise here..the DoS clause has me up all night worrying and watching more videos about how to “get out of it”
some numbers for context, property value is about 170k, it has a Mtg of 90k. So theres decent equity, but it’d need about 20-30k in rehab.
I really want to hear all your opinions on this transaction.
Give it to me straight up, am I being stupid by doing this deal and risking it all, or is this something I can profit from without too much headaches..
Money (3k) is already in escrow with an addendum that if foreclosure filings has begun it’s refundable.
