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Updated 6 days ago, 12/20/2024

User Stats

24
Posts
20
Votes
Otto Kinn
  • Investor
  • Garrison, ND
20
Votes |
24
Posts

Best Strategy for Acquiring Subto VA Loans

Otto Kinn
  • Investor
  • Garrison, ND
Posted

Quick preface, I'm a cash home buyer. I do 20-30 flips/wholesales per year. I've largely stayed away from the "sub-to" buz word, but I have done a couple sub-to flips knowing that I only needed to hold onto them a couple months and I was prepared to pay off the notes if they were called.

Sub-to for long-term hold on the other hand has me nervous. 
HOWEVER..
I'm getting a fair number of deals with significant cashflow and equity that make these amazing buy-and-hold opportunities at 2 and 3% interest. So I'm strongly considering adding a handful of these to my buy & hold portfolio.

I understand that there's no "risk-free" method to acquiring these properties subto, but have any of you had success over the long-term acquiring properties with VA loans attached? How can I best protect the seller as well as myself? Should I explore putting these properties into land trusts? (I'd love to just do a regular assumption on these, but I've more or less maxed out the number of houses I can buy in my name already)

What I've done on these sub-to deals in the past:
1. Bought on Contract For Deed and only recorded the notice.
2. Got property specific PoA. (to protect my interest if seller is unreachable in the future)
3. Got added to the property insurance policy as additional insured.
4. Received access to mortgage portal to ensure all payments are made (including escrow).

Anything else here I should do or not do if acquiring for the long-term?

Alternatively, do the risks outweigh the benefits of $500+ cashflow plus 30% day one equity and less than 2k out of pocket?

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