Selling RE, Subject To
Let's say I have a rental SFH that I owe a note on. The house provides me with $200/ month net but I do have to take care of maintenance and deal with vacancies. Is there a way for me to sell the house with me carrying a note? Running the numbers, doing this could double my cashflow and lessen the responsibility of maintenance and vacancies. Would this be a subject to deal? Ideas?
105 kph
Re: Selling RE, Subject To
Cool, not sure what vehicle it is though. If I get a reliable tenant. I want to pitch that they could buy it from me over time. I guess kinda like a lease/purchase. They could give me some down and make the payments to me. They would be responsible for taxes and insurance. I would then pay the bank with after they pay me.
85 kph
Re: Selling RE, Subject To
never sell subject to only buy that way.
I have one sold with owner financing on a 40 year note. I still owe another 8 years on it. Just got back from the cpa yesterday. You will pay a capital gains tax on the difference between the note you owe on and the note you create. After that you will only pay taxes on the difference of the interest income and your interest paid on your mortgage. You will need to provide them with a 1099 mortgage interest statement and you lose all write offs on taxes but they are totally responsible for the house. AC goes out it is on them.
70 kph
130 kph
Re: Selling RE, Subject To
You would want to wrap the new note around the underlying note so the new buyer makes payments to you instead of the lender.
If the house is worth more than $80,000 then the buyer will get $8,000 from the government if they buy before December 1. You could have an agreement with them that they pay you $4000 down after they get the money from Obama ( this is only available for anyone who has not owned a home for the past 3 years)
Inflation is coming soon and that means the price of the house will go up substantial so....If it were me, I'd put in a buy back option for the sales price for after 3-5 years so you can ride the inflation ladder.
295 kph
Re: Selling RE, Subject To
Here's one of my favorite Diane Kennedy posts.
Not sure if it will help you, Runum-- it was written in 2003-- laws and markets have changed.
But the concept still has merit.
-Russ H.
85 kph
Re: Selling RE, Subject To
If you sell sub2 then there will be a title transfer whether it be to a Trust or LLC possibly. You can change the title to your property anytime to a trust for estate planning purposes. If the property is in a trust it will bypass probate should anything happen to you. Probably the best way to hold property IMO. But they will get ownership of the title. If/when they default you are left holding the note to a property no longer in your name. Could get very sticky working that scenario out.
If you seller finance you can do it under a contract for deed with an underlying lease. Using a contract for deed the title to the home doesn't change to the buyer until the terms of the contract have been fulfilled. Under the terms of the contract state that if they default on the contract it reverts to the rental paperwork they also signed. Doing it this way allows you to evict rather than go through foreclosure.
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