Can you look over my sub2/AITD plan?

[Jessica G.]

I'm nervous. I've been talking to an acquaintance for weeks now about buying his property by taking over his loan as a sub2. We are finally meeting today so I can look at the property and we can talk about it.

(Built in 1985; loan balance $114K; recent comps $135Kish, monthly P&I $650; Taxes and insurance $425; projected rent conservatively $1300 [all comps are $1400+]; three years landlording experience with former primary home, but this would be my first deal.)

If we go forward, here are the basic steps I intend to follow. Can you tell me if I'm leaving anything out?

1. Appraisal

2. Inspection

3. Consult real estate attorney

4. Close at Title Company

4a. Get Power of Attorney for the property

4b Have seller send “release of information" authorization to the mortgage holder on my behalf

4c Seller changes mailing address on account to mine

4d Include language that when I refinance, escrow goes to me

5.Sell/dispose of home contents (he just wants to walk away; I intend to work with an estate sale company)

6. Rehab for rental (I will only take on this project if the rehab is minor -- flooring, painting, small handyman projects)

7. Rent that baby out