@Dennis Dougherty I own several rental properties "subject to" the seller's mortgage. Some I have owned for a short period of time and others for a couple of years. No banks have called the loans due, and I hope it stays that way. It is always in the back of my mind though. If a bank does call one of the loans due, I do have some lenders I can go to (private and banks) to pay off the note. And I have enough equity to potentially sell it if I had to go that route (not preferred but I would do it if it was last option).
I think a very important aspect of doing a deal like this is knowing that someone else's credit is on the line (seller). I consider it my duty to protect that. 1) its the right thing to do. 2) my credibility is also on the line. 3) if I do right by the seller (pay off their note, save their credit), they are likely to refer me to more people.
As for contracts, I would find some local investors who do subject to in your area/state, and find out which lawyers they use to close.
As for legality, again contact a lawyer.
And of course the disclaimer... I am not a lawyer, or an accountant. This all just based on my experience and my opinion.
