All Forum Posts by: Tarrin Lilly

Originally posted by @Laura Marshall:

Hi,

One other thing that you need to consider is this. When a short sale is approved by a lender (no matter how many lenders/liens are issuing the approvals), the approval is in the buyers name...meaning the one that originally submitted the offer. The approval can not be transferred to another buyer. Many short sale approvals have restrictions such as no sale or transfer within 90 days of the purchase. If you plan on making an offer on a property, you would be the one who needs to complete the purchase in your name. You can't switch buyers mid stream and the buyer can not be xxxxxxxxxx successors and/or assigns. 

 Thank you for your advice Laura, I was hung up what exact procedures would need to take place when conducting a wholesale transaction and the offer I submit would be lower then what the seller owes on the property, didn't connect that that's when a subject to comes into play. Actually in terms of a subject to, if the buyer defaults on the payment the original seller will have credit infractions placed on their credit report initially, unless there was a preliminary agreement between buyer and original seller that transfered the buyers name to the loans owed to the lenders. Thank you for commenting though I definitely appreciate it.

I know the difference lol, I was just stating how confusing I sounded because I was unknowingly stating what would substitute for a short sale when it would be handled as a subject to agreement. I was basically joking myself for asking a foolish question. Placing a offer that would be lower then what's owed to the bank is a essential part of a short sale but my original question was in regards to a subjec to agreement, enabling the buyer to assume all mortgage obligations for the subject property. I understand Ned.

Originally posted by @Ned Carey:

End Buyers are often perfectly happy to accept a "Subject to" deal. But if the property needs renovation, they will not be able to get any financing or repairs if it is a "subject to" deal. 

No Smart buyer will pay more than the property is worth just because they are buying "subject to" You cannot buy it nor resell it for less than the mortgages owed. Even if you do subject to. Mortgages "subject to" are part of the price. 

Example:

You offer seller $50K

Seller owes $70K

Unless the seller pays the $20K difference Or the bank accepts $50K as payment in full, you cannot possibly buy it for $50K. If you pay the seller $50K in cash and accept $20K in  "subject to"  remaining mortgages you have paid $70K not $50K.

 Actually not that I read your post, I would be essentially be asking the bank to short sale on a property lol. Any concern that comes to mind I make sure I post on BP , I'm pretty sure to seasoned vets it may sound novice or unclear, but in the end im able to express my question whenever I'm asked to explain and subsequently I  recieve good advice that really helps me. You won't nvr learn as much if you don't raise your hand.

Originally posted by @Ned Carey:

End Buyers are often perfectly happy to accept a "Subject to" deal. But if the property needs renovation, they will not be able to get any financing or repairs if it is a "subject to" deal. 

No Smart buyer will pay more than the property is worth just because they are buying "subject to" You cannot buy it nor resell it for less than the mortgages owed. Even if you do subject to. Mortgages "subject to" are part of the price. 

Example:

You offer seller $50K

Seller owes $70K

Unless the seller pays the $20K difference Or the bank accepts $50K as payment in full, you cannot possibly buy it for $50K. If you pay the seller $50K in cash and accept $20K in  "subject to"  remaining mortgages you have paid $70K not $50K.

 Ok thanks For the advice NEd, I actually read a article on a site called CREonline last night after my post and your right, most investors are very willing to accept a subject toagreent, win-win for seller and buyer.

Originally posted by @Richard C.:

You are proposing to make an offer, subject to existing financing, for less than the amount owed?  That is not going to work.  If you make an offer subject to existing financing, you are agreeing to take on all of the existing obligations.

Furthermore, since the seller remains on the hook as well, there needs to be something in it for them.

 Ok I understand now. This scenario usually occurs when there is little to no equity in the property, so as a wholesaler I would have to find a end buyer that would be happy for a subject to,  most likely an investor who does lease options. The seller wins just buy having someone pay their debt obligations off correct?

in the terms of keeping things simply yes the price is all that matters, I understand that, but that was not my intent with this post, I was not trying to get advice on analyzing a deal, my intent was to find out what are the buyers plan of action when a situation like this arises. My intent was to recieve good advice on whether to put properties under contract that are subject to.

Originally posted by @Ned Carey:

@Tarrin Lilly  your question is VERY unclear.

Who cares how many mortgages? What maters is the price.

Are you talking about a subject to deal? Are you acting as wholesaler here and sellingto an end buyer or offer to buy from the "rehab or landlord investors"?

Yes I'm speaking in reference to me acting as a wholesaler and offering a property to a potential buyer that's why I mentioned rehab or landlords investors. Let me make this more clear for you, if my asking MAO doesn't cover every mortgage associated with the property, will the balance be subject to the buyer or the seller? If the buyer, does this occurrence usually turn buyers away?

Hey BP members!! I've searched through BP's post and I didn't quite find a post that answered my question which is, does most rehab or landlord investors accept offers for properties that have more then one mortgage associated with it? I'm pretty sure that if the second or third mortgage aren't significantly high that they would place an offer but if they where,do most rehabbers accept the offer? Or is there a stipulation within the subject to provision of the contract that will designate payment the 2nd and 3rd mortgages to the seller?

Baltimore Maryland or surrounding counties please feel free to submit requirements.

Originally posted by @Ben Bakhshi:

@Tarrin Lilly , around Baltimore, we would be happy to buy:

Fixer uppers where the price is = ARV * 70% - Repairs, in decent areas.

Move-in ready homes that are at 70% of market value.

Ok Ben I will send you a colleague request and add you to my buyers list. How do you typically finance your deals? Through traditional or HM lending?