Using Sub 2 for primary residence

[Brad Helmandollar]

Hey all,

I am working with a seller who wants nothing to do with her house anymore, there is a mortgage on the house still. She is wanting to just give the house back to the bank and take the hit. Obviously nobody wins in that situation but the bank. I currently rent an apartment and am self employed so the restriction for me borrowing is very very high. What I am proposing is a win win win situation, (the bank gets paid, I get a house to live in, and the seller gets to walk away with acting as the second bank and will receive monthly payments to her.) so she doesn't leave with nothing. She is an older lady whos husband passed and is wanting to move on with life. 

I know this is possible. What are the odds the bank actually calls this loan due? The lady realizes and is worried that she will walk with nothing and that would suck. and have to worry about money.  So being able to add her as a 2nd position guarantees that she will receive money every month in her pocket as well as the bank.

Would love to hear from people who do Sub 2 often. 

How can I do this correctly? I spoke to the bank and it seems the loan is assumable. However qualifying with the bank would most likely be a problem, also, if I do qualify and assume the mortgage she would still be out of money in her pocket every month. 

How would you structure this? to make sure you win, she wins, and the bank wins.

[Caleb Christopher]

I'm speaking from experience, as you requested: I run a team managing 50+ creative-only deals per month.

If I were writing this contract, it would include a price breakdown (along with the many disclosures needed in subto purchases). Example:
Purchase Price $350,000
1st mortgage taken subject to: $268,000 (approx)
Seller Finance: $75,000, with monthly payments of $_____ until paid in full
Cash to Seller at COE: $7,000

I also just wrote an article on BP explaining what the different types of wraps are: https://www.biggerpockets.com/member-blogs/15497/102003-wrap...

Tag me in a reply if you have further questions.