Podcast show 70

[Eldar M.]

Hey guys, I hope you didn't miss out the podcast show 70 with @Grant Kemp. Very informative, great niche. Grant seemed to be super knowledgable, thank you guys for another great podcast !

[Jon Holdman]

Be cautious.  I recommend reading through Making Money on Deals That Most Investors Throw in the Trash.

In particular, be cautious about the terms.  The strategy discussed in that podcast has you buying subject to for a loan that might have 20-25 years left and then selling with a 15 year loan.  If you just make the minimum payment on the underlying note while collecting the payment on the 15 year wrap you are going to have a problem any time the buyer wants to pay you off.  If they keep the loan for the full term they will be entitled to a free and clear deed at the point where you still have 5-10 years of payments left.  You better be prepared to come up with the payoff right then. Even if the borrower pays off the loan after a few years (refi or sells) then you have a good chance of needing to come up with cash to be able to pay off the underlying loan.

I see this strategy as a huge opportunity for scammers to leave their buyer's holding the bag on a property they think they now own but that's in fact still mortgaged.