Subject To

This technique involves the seller deeding the house over into a Land Trust Account. Which is simply a Bank account number that holds ownership of real estate. The owner of the property then gets what is called Beneficial Interest of that bank account. The person with beneficial interest still enjoys complete control and 100% rights to the property. A Land Trust is commonly used to keep ownership of real estate private from the public, and to make transfer of real estate interest easier. To do so is done by an Assignment of Beneficial Interest document.

 So again, This technique involves the seller deeding the house over into a Land Trust Account. “Subject To” the mortgage. That specifically means that the mortgage remains in the sellers name, and the investor is now responsible for the payments, taxes, insurance, and maintenance of the property.

When the investor's tenant / buyer gets in position to qualify for their own mortgage, a pay off letter is requested from the lender. At the closing a check is cut from the buyers mortgage company to pay off the existing mortgage and other expenses first, before the investor gets the remaining proceeds.

This works great for a seller because they can now move on with their life and not ever be bothered again with signing any paperwork. The seller will just get a notice that their mortgage is paid.

The fact that the mortgage is still in the sellers name does not go against the seller's financial statement as a negative debt because, the payments are being made by the investor. So it balances it out.

I understand that you must feel comfortable to do a creative deal like this that is why I am willing to go the extra mile and provide you with plenty of good references, and I don't mind sharing with you a copy of my last credit report I had ordered, provide you a copy of my bank statements, last tax returns, and a schedule of my real estate holdings, whatever it takes to make you feel comfortable.

Lease Option

I know you may be confused at this point because I have talked about lease option to my tenant / buyer. 

A Lease Option is an agreement between a seller, and a buyer where the seller is giving the buyer the right to rent or lease, and purchase a property at a predetermined price. 

An investor can utilize this technique when buying and selling.

A Lease Option is simply combining a rental agreement with an option to purchase agreement.

In this case where an investor is purchasing with a lease option, the right to sub lease is added to the agreement. The intent being that the investor still being completely responsible to the seller, will be doing a lease option also with a tenant / buyer.

There are many benefits for the seller.

Seller:

·        Can get close to full value

·        No commission or extensive closing cost

·        Seller is still the owner during the option period, and will need to sign additional documents when it is time for the tenant / buyer to close with their mortgage, and pay off the sellers mortgage.

·        The investor is still responsible for maintenance, repairs, and all expenses, and still has the incentive to see the deal through the end when his profit is made.

·         Seller can get on with their life.

·        The fact that the mortgage is still in the sellers name does not go against the seller's financial statement as a negative debt because, the payments are being made by the investor per the lease agreement. So it balances it out.

Lease Option technique creates a win / win opportunity for both the seller and the investor.

Owner Financing

Is simply getting the owner / seller to agree to take the purchase price in payments instead of one lump sum. The seller becomes the bank and finances the deal themselves. This can be accomplished in a variety of creative ways to make the deal work for you and the seller. Below is just a couple techniques.

·         Wrap around mortgage - is creating a new owner financed mortgage around their existing mortgage. For example:

____ $100,000 Value
|      |                      With no down payment the $10,000 difference is 10% closing
|___| $90,000 Owner Financed Mortgage       cost and commission that the seller
|      |                                                               would have had to of paid had they
|___| $60,000 First Mortgage                          sold through a Realtor anyway.    
|      |
|      |                                                            
|___|

·         Second mortgage - is when the seller has a first mortgage as in the above example of $60,000 and instead of a wrap around $90,000 mortgage, you do a second of $30,000. Or when buying and getting your own new first mortgage, and you have the seller carry a second mortgage for the balance of the purchase.

·         Seller refinance for cash out - if the seller owns their property free and clear and must have a lump sum of cash, can refinance in for an agreed amount, and then do a wrap around mortgage, or second mortgage for the balance of the purchase. 
A seller could also take out a second mortgage above their first mortgage for cash out.

Short Sale

·         A Short Sale is simply discounting what is owed on a mortgage to make the numbers work for you on a deal.

For example:

____ $100,000 Value
|      | 
|      |  Needs  $7,000 in repairs
|___| $30,000 Second Mortgage 
|      | 
|___| $60,000 First Mortgage 
|      |
|      |
|___|

$3,000 is not enough equity to make this deal. So you offer the to discount the mortgage or Short Sale to reduce the second enough to make room to cover cost and your profit.

·         Can usually only be done when the owner is delinquent at least 30 days. This is when the loan is placed with the loss mitigation department of the lender. This department reviews alternatives to foreclosure with defaulted borrowers.

·         The lender may also require some documentation of the owner’s inability to cover their financial obligation. Such as Tax returns, hardship letter, financial statement, bank statements, seller net out sheet, etc.

          Everything consider perfect, of course I can understand that as a seller you would like top dollar, and all cash. If your circumstances are right for that more power to you, I wish you the best! My deals are not for you. However, for sellers who circumstances are less than perfect, I provide some alternative methods for accomplishing your goals.

           I can appreciate the problems you are going through, and I cannot buy your property, and make your problem my problem.

         There must be a reason for me to get involved with your property. I’m an investor. I must be able to make money, if not I’m losing money and will be out of business. At the same time I know I must provided a service and benefit to you the seller. I'm very creative in working with different circumstances to create a win / win for us both. 

      I buy houses all over the country. As a Real Estate Broker, I also have a network of partners in any area to act as my on site manager to get the job done.

Please consider the information I share, and if you have any questions, concerns, or are ready to move forward, call or e-mail. 

708-774-9030, or 219- 979-4607         SaveOrSellNow@yahoo.com

     Sincerely,

     Allen Watkins

     Broker/Investor