I have a deal that I have been working on for the last week and I have the buyers and sellers all in place. I am just having some trouble on the structuring. I was out looking for deals on mobile homes in an area I like when I came across a nice 4/2 frame home with for rent/sale signs covering the house. The owners looked very desperate so I called the sign to get some more information. As it turned out they are very eager to just get rid of the home. They bought it three years ago to try and flip it and after putting a lot of work into the place they have just been renting it to keep up with the payments. They just had tenants move out and trash the place so at this point they are VERY ready to dump it.
There payment is $950/month PITI
loan amount is $95k
27 years of a 30 year mortgage remains
I knew the area pretty well and knew I could find someone to take it over.
So I put out a few signs, showed the home, and now have a buyer who is ready to purchase. They have good credit and have $2,500 to put down (self-employed and cant qualify conventional) plus are first time home buyers so they will be receiving an $8,000 credit. This is the way I have it verbally structured:
$105,500 - Purchase price to new buyer
$2,500 - Down to pay for All closing costs with deal
$8,000 - Credit is paid to me once received at tax time
$95,000 - existing loan taken Sub2.
After this I am stuck! I have never done a sub2 deal before and I am hoping someone can give me some advice on an e-course I could read. I know this needs to be done exactly right to protect everyone and I want to get it right.
I have an attorney who says they can do the transaction I am just wanting to learn more about these deals before I move forward.
I realize this is not a mobile home but I am sure it can be done with any type of RE.
Thanks in advance for the help.