Right now the market is perfect for doing Sub2 assignments. Many homes are now underwater, meaning the seller owes more on the mortgage than the house is worth. There are sellers who can no longer afford the payments on their mortgage and are either struggling to make the payments each month or are behind in their payments and are facing foreclosure assignment help java. In Find and Assign, I have a matrix that shows the various options a seller has on getting rid of their property, along with the costs of each. If you are able to show a seller how he or she can walk away from their property and making the mortgage payments without affecting their credit, you have a motivated seller, and one who would be receptive to your offer.
In the past, all you had to do to get a mortgage was to fog a mirror. This means you simply had to be alive! Banks and mortgage companies gave out loans to anyone who could fill out an application. There were no-doc loans, stated income loans, and loans for subprime buyers. Down payments we as low as zero. Flash forward to today. Now, you need to prove your income, provide two years of tax returns, bank statements, and have a credit score north of 680.
What we have now are buyers who a few years ago could get a mortgage, but now who can’t. So, you are in the perfect position to sell unsellable homes to unloanable buyers, all by simply getting the seller to do a purchase option subject to the existing mortgage and assigning this agreement to a buyer for an assignment fee. The new buyer gets the deed at settlement, and pays the closing costs.
There are many ways to find sellers, including posting ads on Craigslist and newspaper classifieds. A sample ad can say “We buy homes with little or no equity. Get out from making any more mortgage payments. ” One fantastic way to find sellers is to call real estate agents and ask them to provide you with leads of those who want to sell, but who can’t because they can’t come up with the cash to go to settlement.
You can offer the agent a referral fee. If the agent is honest and says that he or she can’t accept a referral fee, you can still legally pay the agent by having the agent become your buyer’s agent. When you get the house under contract and then assign the contract to the end buyer, at settlement the agent would receive their legal commission, depending on what you agree upon. In Find and Assign, I go over many other ways to find sellers for the Sub2 Assignment program.
Of course, you need buyers to complete the deal and to make money. You can find buyers by running ads that say “Buy a home with no mortgage qualifying. 10% cash needed. ” You can run these ads on Craigslist and newspaper classifieds. You can also call mortgage loan officers and ask them for leads on those who want to buy a house but who can’t qualify for a mortgage. What you may have to do is simply give these loan officers your info and have them give it to the wannabe buyers. You can offer a fee to the LO on any deal you do.
There are two ways to do this. One way is to write up a simple real estate purchase agreement, where after your name you write “and/or assigns”. In the purchase price section, you would write the price, then “subject to the existing financing as detailed in Appendix A. In the appendix, you would list the balance of the mortgage or mortgages on the property, and the existing monthly payment. There are no special forms that are needed. It is only the wording that you have to use. The second way is to write up a purchase option on the home, using the same subject to language. You would then either assign the purchase agreement or the option to the new buyer.
If you use a purchase agreement, you need to make sure you have the proper escape clauses that let you walk from the deal if you don’t find a buyer. You don’t want to actually purchase the property, and that is what the agreement says. With a purchase option, the seller is giving you the right to purchase the property, but you are not committed to do so. If you don’t find a buyer to assign the property to in a 90 day period, you just walk away.
When doing these deals, there are also some disclosures that need to be signed by the seller, namely disclosing the fact that the sale is subject to the existing mortgage and that the mortgage will remain in their name. You also disclose the potential for the Due on sale Clause. What I always suggest is that before you get started with this, you find a real estate attorney who has done Sub2 deals before. You can find one the same way I did, on Craigslist! In Find and Assign, I share with you how i did this, and what questions you need to ask. You also may need a title agency to close the deal, and I cover that in Find and Assign. Your real estate attorney should also know of one to use.
All you really have to do is get the end Buyer to write you a certified check for your assignment fee after they do their due diligence on the property, including a title search, inspection and so on. The title search will show you any and all liens that are attached to the property, along with any judgments on the owner and any back taxes that are owed. You can use any title agency to do a search. The fee would be around $60 or so. You can either have the buyer do this or have the seller do it and make it available to potential buyers.
When you have a Buyer for the property, you want to refer them to your real estate attorney to get the deal closed. This way you have done your part to bring the two parties together and thus earn your assignment fee. The key is to have a real estate attorney involved in these deals and not to try a “kitchen table” close. You don’t want the seller of buyer coming at you because you did not disclose everything you should have. If you do this right, you can make a reasonable income by assigning just one or two properties per month.
If you do a search online, you can pretty much find everything you need in forums and other sites. There are no special forms, other than a Purchase Option, Assignment of Purchase Option, Purchase Agreement and of course the CYA Disclosure Form. Other forms that are involved are an Authorization to release Information and perhaps a power of Attorney. If you find a real estate attorney who has done these deals, this person can provide you with all the forms you need.
In my Find and Assign package, I provide you with much more detailed information on how to do Sub2 Assignments. This is all found in one of the bonus packages in the form of a 42 page guide, plus all the forms and agreements you need, including a very detailed disclosure form. I teach you many ways to find sellers and buyers, and even show you how to get others to look at properties for you with no upfront cash. Along with this, you get a PowerPoint package that you can use with sellers, along with other useful tools and resources.
There is no need to spend hundreds of dollars on courses or workshops. Once you understand how to find buyers and sellers, and know what forms you need to fill out, you can get started doing this with very little cash. All you really need is the motivation and dedication to place ads online, and what to say to those who call you from your ads. In Find and Assign, you even get scripts and information to send to sellers and buyers.