skeptical about Sub2

[Carlos Asuaje]

Hello BP,

So i recently completed my first multi-family deal and obviously am super excited about having accomplished a big goal of mine. I finished this deal the "traditional" way of investing, by putting 10% down on a conventional loan etc...Turns out i ran into another deal as i was finishing my first one and this one seems like a great deal as well, as the seller is very motivated and is willing to work with me using creative financing.

After hearing her story about why she wanted to sell and what her goals where, the best method I came up with was giving her a little cash and doing a subject to deal....buuuut i've never done one and I'm a little nervous about the dangers that i've read about on BP.

 So i'm asking all the creative financing experts on BP to help out a newbie to this realm and maybe help my confidence a little bit haha

1. What are the chance of the loan being due on sale? (does this happen often? what do i need to look out for to avoid this? could it still happen if im making the mortgage payments on time?)

2. If the bank calls the note due, how can i proceed? (I dont have enough capital for another 10-20% down payment on a another mortgage loan)

3. I read that a red flag for the bank is switching the name on the insurance of the home. Is that true? Should I not mess with that? 

4. I was planning on a buy and hold strategy for this deal because it's an fully occupied duplex. Is that smart with a sub2 deal? does it just prolong the chances of getting the note called due? Has anyone ever used the buy and hold strategy on a sub2 deal?

Any other advice would really be helpful. I appreciate all input to help me feel a little more secure. Thanks