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Updated over 10 years ago,

User Stats

107
Posts
15
Votes
Scott Nipp
  • Investor
  • Fort Worth, TX
15
Votes |
107
Posts

Sub2 questions...

Scott Nipp
  • Investor
  • Fort Worth, TX
Posted

I'm about half way thru listening to podcast 70 on Sub2 financing deals and find it really fascinating. I have a distressed home owner that I was trying to work with a few weeks ago but we couldn't get close on the numbers for a flip or rental. I'm now thinking that a Sub2 deal might be a winning strategy for her situation. However, I have a couple of questions...

1.  Anticipating her question:  Since the existing mortgage stays in place in her name, what happens in a couple of years if her situation improves and she wants to purchase another house?  Would she have a problem obtaining conventional financing for a second home that would be her primary residence?

2. Assuming that I were to close the Sub2 deal and then owner finance to a new occupant, who is responsible for the insurance on the property?

3.  If there is significant equity in the deal I understand that I could structure the owner financing to require a significant down payment to "cash out" some of that equity.  Is it also a viable strategy to simply recoup that equity on the back end of the loan after the existing financing is paid off?  Or is this just simply a bad idea?

I'm sure that I have more questions but I'll start there.  Thanks in advance for any feedback.

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