Considering Making a Subject To Offer

[Bonnie Low]

Our market is very hot, like many places. Inventory is at historic lows and as soon as something hits the market - no matter what kind of shape it's in - it gets snapped up. Every Realtor has multiple investors lined up they can flip a deal to before it hits the MLS. And there are plenty of cash buyers - our main competition. Knowing all this, we've been talking to a potential seller for a few months. She's late on her last tax installment and really wants to move out of her current home to be closer to family but is having trouble lining up somewhere to move to. What I'd really like is to control this piece of property so that when she IS ready to move out, we're in position to purchase it. I'm thinking of offering a Subject To. She could stay in the property for X months to be specified in the contract. This would give her time to find something else. We would catch up the late property taxes so she doesn't have that worry. She would make the same payment she makes now, but to us in the form of rent, which we would pay to the bank to ensure she doesn't go into default. At the end of the specified period, we would refinance the property in our name as she moves out. We wouldn't be cash flowing anything and, in fact we'd be out the property taxes for now (which I view like a down payment), but it would allow us to control the property in the future. We would definitely use an attorney to draw up a contract and perform due diligence such as title search to ensure there are no liens on the property. I know there is always a possibility the bank calls in the note. I'd want a clause in the contract to address if this happens. This would be our first subject to so I'm curious what experience anyone else has had with this same type of scenario? Lessons learned. Contract recommendations? Other ideas for securing properties in a tight market?? Thanks in advance!