How to overcome pitfalls of subject to investing?

[Tony Marcelle]

I am new to subject to investing. Like most people, my BIGGEST fears are the due on sale clause. Here is the other thing that bothers me. If the tenant buyer defaults on making payments in the subject to deal, then what? I am still on the hook to pay the sellers debt with or without the tenant buyer being involved. That's where my trouble come in this situation because my faith and trust is in the hands of the tenant buyer or buyer if I find one. That, and I don't want to be sued by the seller, which I heard can happen if I do not keep up my end of the bargain by paying their mortgage via tenant buyer. What is the best exit strategy for subject to? And, who should I target for subject to deals? Thanks in advance.

[Jay Hinrichs]

reading between the lines if your not very well cashed up.. as in you have ATLEAST 12 to 18 months of mortgage payments plus money to do the fix up after the tenant moves out... even clean tenants there is usually a grand or two ... then subject too is not something you personally qualify for.

as your realizing its a ut oh what happens when... well what happens when your tenant flakes takes a few months to get them out etc etc you HAVE to continue to pay the mortgage the tax's the insurance the UTLS  and put money into the house so it can be rented or sold again..

Sub Too is not like a wholesaling thought process IE make money when you have no money ( like those that try to get into wholesaling and listen to guru's soon realize its very tough and cost money).

So DO NOT engage in Sub too if your not sitting on significant cash reserves and are willing to use them.. Sub too is better for very short term flips that kind of thing..

And of course at the end of the day its the sellers Credit that will get trashed if you don't perform that's why sellers get so hostile when undercapitalized sub too buyers default..

Also you have to look at the stability of your rental pool are these C class B ham rentals or B or A..