I was wondering if it’s possible to buy a house without getting into debt (and without nepotism haha)? The answer seem to be a big NO. I looked into “subject to” deals, from youtubers like Kris Haskins, and got excited for a second until reality hit: https://www.youtube.com/watch?v=DPmBGsiCq9k . He says the deed or title of the home is separate from the mortgage. I question this logic because technically the bank owns the home until the debt is paid, which is why the bank has a “due on sell clause” preventing owners from signing over their property to a third party. This is where the lawyers come in because the deal can get sticky.
The problem with these youtubers is that they’re are in the field of sales. In this case, they are selling us ideas which can be false for most people. Here’s another example: https://www.youtube.com/watch?v=LBJgPDRuYzI .There are so many problems with the messaging in Jason Moss’s video.
Why would an homeowner want to do business with someone who doesn’t have money or doesn’t have good credit? If the seller is so desperate to look over these important factors, then the buyer is taking advantage of them. Plain and simple! Buyers need enough money pay off their overdue payments, cover any liens on the property, and help them move out. That’s thousands of dollars. Stop lying!
Why would the bank allow the owner to sign over the home, which may be the only leverage they have when it comes to debt repayment? These Real Estate Investors are praying on the seller being desperate and the banks never finding out about it.
I appreciate Ron LeGrand’s perspective because he is honest and considerate of his clients: https://www.youtube.com/watch?v=-3xVEOBXFzc . He summarizes:
Subject To deals are risky, it has the seller sign over the property while keeping there debt, which means the buyer can screw them by walking away without paying.
The seller cannot take out another loan with a current mortgage pending, so they can file for bankruptcy and foreclose on the home.
Wrap around mortgage allows the loan to be paid directly to the current loan with a new loan.
With all this said, LeGrand is still a salesman as he sells seminars and products. Now don’t get me wrong, these unconventional deals do exist and can be beneficial. The only problem I have is they’re selling lies to people who are not financially ready to play the real estate game. Also the unconventional deals have more restrictions depending which state you live in.
For those of you who successfully completed an unconventional home purchase, please share your experiences so we can learn from them.