All Forum Posts by: Ellis San Jose

Unless you are a seasoned real estate investor with professional title searching skills, I wouldn't do this. There can be some liens that you may not be aware of. Using escrow company & title insurance will protect you from an unwanted surprise.

I agree that many transactions shouldn't be done simply because you can.

However, out of curiosity, if you had the opportunity to buy a $hit property with golden financing & then immediately sell the $hit property but keep the golden financing & transfer the financing to a great property would you consider it?

You are making erroneous assumptions. What’s that saying about ASSume? Have you ever thought about getting 0% on one property and substituting the collateral to a great property? Btw one of the transactions was on an $800k house in an A area. It had title problems that I fixed and it needed $100k rehab. I now have $300k+ equity plus positive cash flow. Ted Lasso suggests that we be curious instead of judgmental.

1) Research Zoning of similar property

2) Do search with same zoning criteria with propertyradar or have title company give you a list.

3) Possibly filter by satellite photos to eliminate undesirable topography.

1)Purchasing distressed property with seller financing with substitution of collateral clause.

2) Wholesale property as-is, then move favorable seller financing to better quality property keeper at below market rate & favorable terms.

"Good deal" is very subjective. more accurate is "Good deal for you".  What are the alternative choices if you don't pursue this?

What are the terms? As-is current value ?

https://www.californiamortgageassociation.org/news-articles/article/senate-bill-1079-californias-new-foreclosure-and-post-foreclosure-process/#:~:text=New%20Civil%20Code%20section%202924m,to%20the%20prospective%20owner%2Doccupant.

This law was poorly written. 

Amy,

You are smart to ask A LOT of questions about the borrower.  Make sure the down payment is high enough to make sure the buyer/operator think's twice maybe 3 times about walking away.  

I'm not an attorney so please consult one in your state to make your decisions.

You could propose they master lease the property as a trial period BEFORE you agree to purchase terms which would transfer title. 

If there is an existing mortgage in your name it should be disclosed that your name will stay on the loan for possibly a very long time.  You could negotiated a limited term where they MUST refinance & pay off the loan.  Just weigh all the possible exit strategies.  A ethical investor who discloses the pro's & con's of subject to transaction could be a win win for both. Just go in with both eyes open.

1) Rehab money can come from 2nd Mtg/heloc if you have enough equity. Private lender or JV partner. How you pay it back is with your income so make sure it's within your means. You can possibly refinance with a new 1st mtg & payoff the existing 1st & 2nd IF you have created enough equity with the rehab.

2) Yes, get a home inspection.

3) Title company & escrow should be able to handle a seller finance. Sub-to not as easy to find. I believe there are Transaction Coordinators Pace's group uses that can provide a recommendation in your area.