Questions about buying subject to

[Robert Reineri]

I have a couple questions regarding subject to purchasing. With interest rates rising it seems like a good time to look into this option.

Does a deed actually change hands when purchasing this way? Is the seller going to give me a warranty deed? Is the bank going to accelerate on the note, and if so how would they know in the first place?

 Now what if the seller offers to wrap the existing mortgage and finance me that way. Am I completely reliant upon the seller to make the loan payments on the original note? What recourse do I have, if any?

Finally this seems like a good strategy if the seller is in pre-foreclosure. I can give them some cash and possibly get below market finance rates. I'm aware that the loan would have to be brought current and that might be quite expensive. Just have to do the diligence.

[Matt Thompson]

So I am pretty new to investing but I have been researching this. Check your state laws but you could do a land contract/contract for deed where the deed doesn’t transfer until the final payment or they could quit claim the deed to you. As far as the due on sale clause. I am in finance(day job)and I dont see this as much of an issue. Lenders lose money every time they repo/foreclose. They have to hold money in reserves for non-performing notes that they can not lend out. it decimates their bottom line so unless they have to,they won’t. Again I am new to this so don’t take it as gospel but just my two cents.