This destroys the credit of the original owner who can then sue the subto buyer.Another issue is if the subto seller claims they were taken advantage of by the subto buyer at a vulnerable time (pre-foreclosure) and an attorney or regulator raises the question of equity skimming.

Here is some key information:Property recently hit the market and has 2 cash offers alreadyThe seller provided a pre-inspection report, which I shared with 2 different lenders, both think it may fail conventional financing due to potential structural and electrical issues (realtor thinks it could pass conventional)Seller has 100% equity but is behind on other payments (not sure of the urgency money is needed)This is my first attempt at an “investment” property so I’m new to thisI see 3 optionsMove forward with an offer using conventional loan pre-qualification-Not as attractive of an offer to the seller-Possibility that appraiser calls out structural/electrical issues that need to be fixed before closing, effectively causing financing to fail- Best terms and fewest loan fees for meUse a rehab style loan such as ChoiceRenovation-Even less attractive than a conventional offer to seller, but less risk of failed financing if appraiser calls out issues-Slightly worse fees and interest rates compared to conventional-Lenders tell me possibly up to 60-90 days closing in some cases, with red-tape for contractor requirements and draw schedules (sounds like the most hoops to jump through during rehab)Use a hard money lender-Most attractive loan option I can give to seller so I can compete-Much higher fees and interest rate for me-need to refinance into a conventional at the end of rehab (not familiar with seasoning periods but I think this is a factor as well)Which option would you do?

I’d be happy to walk you through the process, from pre-approval to closing, and provide guidance on the best mortgage products for your goals.

Pre-2020 it was 12% per year.

It’s great that you’re pre-approved, but I’m curious why you’re leaning toward traditional lending instead of hard money, especially for a flip?

Post '08' people had the luxury to analyze for "cheap" vs the pre-'08' pricing and feel a sense of security in there current price acquisitions. 

The money that you end up owing to repay the loan over the 5 year term is now post income tax money unlike how you traditionally are supplying your 401k with pre-tax money.  

To vet guests, you can use a pre-booking form, ask about their plans, and require an ID and signed agreement.

Most community banks in commercial lending will have a pre payment penalty if you refinance or sell. 

There's growing housing desperation to both purchase and sell in markets with pre-existing supply and price constraints.