Subject To Deal Help

[Chris Troutner]

Hi! I have a potential Subject To deal in Florida. I have never done a subject, just regular off-market purchases. I have researched them and I have contract templates, but wanted some advice please. The seller basically owes what the house is worth. They have two mortgages one small construction loan and a main mortgage that is an Interest-Only ARM that resets in about 4 years. Payments on both loans in total (including insurance and taxes) about $530. Property could rent easily for $1100 to $1200, or maybe a little more, so there is a nice spread. I would keep as a buy and hold. The house may need some work to make it rent-ready (haven't seen it yet), but likely not much money to make ready as it is occupied now by a tenant that is moving out. My concern is the I/O ARM. What are potential pitfalls?