All Forum Posts by: Nick L.

Thanks everyone for your replies, feedback, and help. Yes I did disclose to the lender up front. I had already discussed this with my attorney and his opinion was there would be a transfer tax liability on the transfer back to my entity. Additionally after the advice of @Jeremy P. I spoke with my accountant and he said this would trigger a sale which would have a larger tax liability. I went ahead and canceled the loan application. Looking for a new lender for this one.

I was referred to a mortgage broker for a re-fi on a rental property that I own (refinancing out my private lender in to long term financing). Long story short, late in the game, the mortgage broker has informed me I would need to quitclaim the property from my company name in to my personal name to close the loan, and then I can quitclaim it back to my company name immediately after the loan is closed. 

Technically I think they are asking me to violate their due on sale clause. In addition, I will need to pay transfer tax for the transfer back in to my company name.

Anyone have thoughts on this?

Something I do when presenting seller financing offers to free/clear sellers... I will present a low cash offer (some might say low ball), and then I present a much higher seller-financed offer at 0% interest. For example 1 house I bought the 2 offers I presented were...

$25,000 all cash

$60,000 seller financed at $300/month for 200 months

To my surprise, the seller took the $60k over 200 months. Of course he could have negotiated with me for some money down, or a balloon. But he didn't. So now I have this as a rental and I never need to go to a bank for it.

I don't like to assume they want interest or a balloon or a down payment until they bring it up. But be prepared for them to say no to your offer, and then you need to ask questions such as "what if we put in a balloon?" or "what if I put a couple thousand dollars down?"

@Marc Imhof - that is a lot of great advice and things to consider.

@Hannah Williams - I am not an attorney, but what I've been told by attorneys in my state (Pennsylvania) is that if you enter into a land contract, it is more difficult to get the person out of the house if the deal goes bad; you can't evict them like you would with a lease. I shy away from land contracts unless the person puts down a good chunk of change which is nonrefundable. But I prefer a LC over transferring title.

@Mike Karbowsky haha yes i would not recommend it up there in the winter months. May-September are great though.

@Mike Karbowsky I am very sorry to hear about your wife. I hope your real estate ventures will help you pass some of the time as you mentioned and also to spend some time with your grandsons. And of course I hope you will make some money too!

I noticed you mentioned working the nuke plant outages. I grew up in Oswego, NY which has several nuke plants. Is that where you were on assignment? I am sure you ran across some people I know from back home. 

Best of luck in your ventures!

@Dennis Dougherty I own several rental properties "subject to" the seller's mortgage. Some I have owned for a short period of time and others for a couple of years. No banks have called the loans due, and I hope it stays that way. It is always in the back of my mind though. If a bank does call one of the loans due, I do have some lenders I can go to (private and banks) to pay off the note. And I have enough equity to potentially sell it if I had to go that route (not preferred but I would do it if it was last option).

I think a very important aspect of doing a deal like this is knowing that someone else's credit is on the line (seller). I consider it my duty to protect that. 1) its the right thing to do. 2) my credibility is also on the line. 3) if I do right by the seller (pay off their note, save their credit), they are likely to refer me to more people.

As for contracts, I would find some local investors who do subject to in your area/state, and find out which lawyers they use to close.

As for legality, again contact a lawyer. 

And of course the disclaimer... I am not a lawyer, or an accountant. This all just based on my experience and my opinion.

@Andrew Medici welcome to Pittsburgh investing. moved here in 2012 and love it. let me know if you ever want to discuss the market.