SUBJECT TO -> WRAPPED.. Need Some Insight

[Amir Beheshtian]

Hi! I wanted to share a transaction that our team and I are currently going through...

3 months ago we bought a property in Florida (SUBJECT TO) (~3% interest rate). We wanted to rent it out but aren't getting as good of tenants as we hoped, so instead we wanted to put it up on the market as a seller financing deal- we got so many hits!

This past month we've been entertaining an offer for a buyer to pay us 16% down @ 7% Interest (5,4,0,0,0 prepayment penalty) - property for sale @ $360k. The buyer is looking to put 3 people on the loan in order to get their DTI around 55%. After reviewing their financials, we were still a bit weary and were thinking of possibly putting in a performance deed in place for which if they miss payments, we recoup the property. Thoughts?

They also had reasonable concerns of how they (buyers) can ensure they won't lose the property (we put in a clause that we'd take the risk but won't get into the details in all that), what's another way we could've relieved them here?

We plan to either service this ourselves or use a third-party servicing company like West Star to facilitate receiving and making payments. Thoughts?

We are a bit concerned on the insurance side, as the current mortgage holder (from the subject to deal) still has his insurance and we added our insurance. So what I believe we'll need to do is remove our supplemental insurance and have the new buyer add theirs. But we want to avoid adding risk on calling the loan. Thoughts?

One important note to add is that these new buyers are non- permanent residents and have only been in the country for 4 months, they're really eager to get the property which is why they added this third person on the loan in order to bring their DTI down. They all have full time jobs making ~40k year + supplemental income from food delivery apps. Any concerns there?

Would love if people can give me their thoughts on this.

Thanks all!