elisa 0 Report post Posted December 15, 2009 I am rethinking my stance on taking a property Sub To. I am hearing horror stories that the homeowners are crying fowl against investors who did a Sub To with them while they were in Foreclosure.Anyone know anything about this or has anyone heard of any new laws we need to be aware of? Not like there aren't alot of Laws already! Govenment get outta our stuff! merry christmasHappy Birthday Jesus Share this post Link to post Share on other sites
Jason (AL) 1 Report post Posted December 15, 2009 There's nothing illegal about purchasing a house sub2.If they purchased while they were in foreclosure, then that'sdifferent. Not likely so, seeing they're in foreclosure. Are you meaningpre-foreclosure? The "fouls" you speak of are more than likely situationswhereby an investor purchased sub2 (promising to make the payments),took money from the buyer every month, then didn't make anymortgage payments to the bank. The owner gets a foreclosure,the buyer loses all of their money, as well as the house, and gives sub2ers (or any niche) a bad name. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted December 16, 2009 It only takes a few scam artists to give everyone a bad name. You can't control them, but you can be sure that you do the right thing. Run your business honestly and ethically, treat homeowners with respect, and you'll rise above it all. Share this post Link to post Share on other sites
Guest jvmccall Report post Posted December 31, 2009 Let me just chime in here for a minute. I am not a fan of sub2's. I have done 4 of them. I know lots of Investors who have done them. It is just too fraught with problems and things that could go wrong. There is really something to be said for having "control without ownership" like MichaelC & others teach with lease options. There is a lot more risk involved with sub2's - especially because now that you "own" the home and you start borrowing private money on a 2nd deed of trust. And what if the deal goes bad and you can't find a buyer, or there are too many repairs? It's just A LOT easier to get out of a sandwich lease option than a sub2 if things to south. In this market especially, it's so important to stick with the strategies that give you the least risk and the greatest potential for quick cash. Share this post Link to post Share on other sites
<Steve> 82 Report post Posted December 31, 2009 And what if the deal goes bad and you can't find a buyer, or there are too many repairs? It's just A LOT easier to get out of a sandwich lease option than a sub2 if things to south.I totally agree with that. I have been looking at land trusts and have looked at sub2s and some swear by them. I don't care how good of an investor you are, you will land a deal that doesn't perform as you anticipate. So if you're stuck with the deed or are a co-owner as a beneficiary that can be a tuff spot to be in, worst yet is using your own cash and credit. L/Os also lets the investor kick the tires to see if the property performs well as an investment. Share this post Link to post Share on other sites
Real Estate Invest 0 Report post Posted January 24, 2010 I'm going to disagree with the consensus here, and tell you firsthand that:1. Many states have enacted laws severely restricting pre-foreclosure purchases. Maryland is one, which I know because I felt the fury of a lawsuit there over one.2. These cases, when they go to court, are not about "the Law," they're about sympathy and public sentiment. Judges and juries go with public sentiment, and right now there's a lot of anger against people who are perceived as "equity thieves" and "taking advantage of hardworking but down-on-their luck home owners." Age, gender, race, ethnicity, and language factors all come into play as aggravating factors as well.3. Having been sued, I can assure that serious lawsuits are so expensive to defend against that you lose even if you end up winning in court. The cost in time, money, and lost sleep isn't worth the aggravation, no matter how "right" you are.I would urge you to stay away from pre-foreclosures. Do deals with people before their mortgage lender finishes filing for foreclosure, because once it starts you become this big, mean, tricksome, sophisticated white collar predator, "taking advantage" of a poor little old lady or some nonsense. It's just not worth the fight, and sooner or later I assure you the fight will come to you. May not be the first deal, or the second, but it will come.Best of luck,_________________________Brianwww.ezlandlordforms.com Share this post Link to post Share on other sites
Jason (AL) 1 Report post Posted January 25, 2010 Thanks for sharing, Brian. Although I've never purchased a house sub2 in pre-foreclosure (I always tried to get them before they reachedthis stage), this is one of the many reasons why I no longer pursue the sub2 game.Too much risk and too many headaches for my taste.I like to sleep at night. Share this post Link to post Share on other sites