Anyone have any experience with this LLC? They made an offer on a friend's house at asking price, but some things about it sounded odd to me, so I wanted to see if anyone had any dealing with them. I couldn't find any info on them online, other than a business posting. There appear to be other, similarly named LLCs with the same address. At least one is linked to a Dustin Geroski, a RE investor in FL. That's about all I could find.
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Essential 6 Sigma LLC
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Last: 6 mo ago by maverick2076
No clue, but I'd guess it's a future rental house. What was weird on the offer?
I'd make sure to complete some due diligence on the llc before contracting with it.
I think they want to buy it, but leave the mortgage in his name until they flip it. Doesn't seem kosher to me.
maverick2076 said:
I think they want to buy it, but leave the mortgage in his name until they flip it. Doesn't seem kosher to me.
This is called "Subject To" and is a technically a form of owner financing. Then theyll come back and try to negotiate to "wrap" the existing mortgage with a risky note/deed of trust that they create with some buyer your buddy has no relationship with.
Dollars to donuts, your buddy's mortgage docs prevent this very type of "purchase."
No need to research the LLC if "subject to" or "Sub2" are what they're offering … just say no
We have talked about subject to issues many, many times over the years. I still haven't personally dealt with a lender calling a wrap/subject to and neither have any of the real estate investors/attorneys I have discussed them with for over 25 years. I don't think anyone on Texags has come forward with saying they've been involved with one either.
That being said, they are still used quite often and with success. Diligence and all parties knowing what is being done and all being represented by seasoned professionals is wise.
That being said, they are still used quite often and with success. Diligence and all parties knowing what is being done and all being represented by seasoned professionals is wise.
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The biggest issue with Sub to is that the mortgage will still be in his name when he goes to buy a new house which could be a debt to income issue.
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Looking at post again it said they want to buy at "asking price ". Where is the wrap here? It may stay titled in sellers name until deed is filed, but purchase at ask should get rid of current mortgage.?
Monkey business. Don't get into it. Cash at closing or gtfo.
They cash out the equity to the "seller" then ask the seller to assign the debt to an unrelated buyer. Sounds great except that in 99% of cases your current lender will have the power to call the note(due on sale clause), you are still a responsible party(no release of deed of trust), your new lender is going to need to see at least a year with of payments before the likely call it a wash and it willl definitely not restore entitlements on a VA loan.
Besides that sure, sub finance your home and sign away the title. What could go wrong?
Besides that sure, sub finance your home and sign away the title. What could go wrong?
A good plan violently executed now is better than a perfect plan executed next week.
-George S Patton
-George S Patton
Yes. So, if contemplating the transaction, do your due diligence, have real estate professionals involved in the deal. Don't t go it alone. If red flags-you don't have to proceed. Wraps and subject tos are done every day.
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It is actually worst then that. To eliminate the mortgage payment from the debt to income ratio, the party making the payment has to be obligated on the mortgage. In the case of a sub-to the only person obligated on the debt is the original borrower. So, it will still count going forward until the mortgage is paid off. if it were a car payment for example, simply showing 12 months of payments IS acceptable, but not a mortgage.
https://selling-guide.fanniemae.com/sel/b3-6-05/monthly-debt-obligations#P3376 See debt paid by others.
https://selling-guide.fanniemae.com/sel/b3-6-05/monthly-debt-obligations#P3376 See debt paid by others.
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Man that torpedoes the whole benefit right? We have been pitched this deal by several folks and that is where I generally blow up their presentations. That or the entitlement issue. Actually had one asshat pick that hill to die on in front of a dozen agents. Talked about the VA allowing 2 loans in most cases. Lolol
At this point in the game there is not much the servicers have not seen.
At this point in the game there is not much the servicers have not seen.
A good plan violently executed now is better than a perfect plan executed next week.
-George S Patton
-George S Patton
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I have not come up with ANY situation where sub-to would make any sense for a seller. There might be one but I have never seen it.
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Thanks for the info. They pulled their offer as soon as he and his realtor started asking questions about it.
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