Today's low prices are attracting many people to the market wanting to learn how to own real estate. At times it's good to also learn how NOT to own real estate. Assignment of mortgages is one of the ways not to do it.

Lots of Hype But Not How to Own Real Estate

There is a lot of hype in the real estate investing world. Everyone is looking for their special angle. That leads some people to skirt the ethical edges in search of an advantage. That's not how to own real estate.

Learning how to own real estate involves learning to do it ethnically. Technically there is no sanctioned term for "assignment of mortgage". What

it is actually referring to is "subject to existing financing".

It requires the seller to keep their existing financing in place.

The assignment of a mortgage involves you as the investor acquiring the deed to a home and then assigning or selling it to someone else along with the existing mortgage. The hype is that every wins in the deal. It's true they do until the seller doesn't win.

Learning how to own real estate includes knowing where the risks and pit falls are. The seller does win when they sell for more than they owe. Sometimes even for more than market value when they provide financing assistance by keeping the existing financing in place. The risk is they give up the title but are still on the hook for the existing financing. If the end buyer stops paying on the existing mortgage the lender is going to come after the seller. Depending how the contract is written the seller may or may not have recourse to take back the home. Being in the middle of that deal is not how to own real estate.

Learning How to Own Real Estate Means Knowing the Details

When it comes to assignment of mortgages or subject to existing financing, the devil really is in the details. It can be done ethnically but at a minimum, it requires full disclosure to everyone in the deal and especially to the seller.

Learning how to own real estate involves knowing when to have attorneys involved. Not only to protect your interests but even when it's for the benefit of the seller. This is one of those times.

An attorney for the seller makes sure they fully understand the details and risks involved in the deal. This is ethnical but more than likely, the attorney will

talk them out of signing the contract or will put very strong language in to protect them.

There is also the issue of sophisticated and unsophisticated parties to the deal. An investor knowing how to own real estate using many methods is a sophisticated party to the deal. Most states have specific laws holding sophisticated investors to higher standards than unsophisticated sellers. Just something else you need to know as you learn how to own real estate.

Checkout my article on subject to existing financing in your quest to learn how to own real estate.

Read my book on Investing with Lease Options and Subject Tos before considering my course or anyone else's on subject tos.

Thoughts?  I'd enjoy hearing your comments on this or any other technique about how to own real estate?

 

 

 

 

 

Lease with Option to Buy

A What?

A lease with an option to buy, aka rent to own, involves leasing a home from a seller who might not be able to sell it, or rent it, otherwise. It allows the investor to rent it and then buy it, without having to use money or credit.  There is no bank financing or approval required.  You can do this over and over again. The technique of lease with option to buy is what helped me get going “full steam ahead” in the real estate business. Creative seller financing is my favorite way to invest in real estate.

Investing using the subject to technique involves having the seller sign the deed of their home over to the buyer “subject to” the existing mortgage. The seller keeps the mortgage in their name, but the buyer/investor owns the home and is responsible for the payments of the mortgage. The investor does not have to qualify for a new mortgage using this method. The technique of subject to allows the seller to move on and get out from underneath their payments and the investor the ability to buy many homes without using his or her own cash or credit.

Both methods, when done properly, should result in a win/win situation for the investor and seller. I would only teach my students how to use these two methods in a fair and ethical manner. When all parties are treated fairly everyone wins and things work out for the best. I truly believe this is the only way to invest in real estate!

To find out more you can check out my book on Lease with Option to Buy and Subject To Investing

Check out more about lease option and subject tos on my site and my blog.  You can always use the search button on my site to find other related articles and posts with more detailed information.   I look forward to working with you soon....