Purchasing a home subject to

[David Rundle]

I have an opportunity to purchase a home tomorrow subject to the existing mortgage (~60k) which will give me immediate ~25k or so in equity.

Do any of you had advice to purchase subject to with the due on sale clause or to avoid the transaction?

[Aaron Junck]

There are tons of discussions on here about this.

Valid points are the odds of due on sale clauses that will be called will likely go up when interest rates go up.

Also a HUGE issue is the SAFE ACT and Dodd Frank. A lot of talk going on on BP about all 3 and how they will affect us investors.

Podcast #2 with Karen Rittenhouse is a great one on sub to deals. If you chat with her now she states that she no longer purchases that way. :(

IMO if your going to do a flip and you can do it via sub to then go ahead and do it if the flip from start to sale date is going to be 6 months or less. If your plan is to buy and hold you should be ready and able to payoff the loan if it gets called.