Otherwise they're just handing over a $1M property to you and if you default, they have to foreclose which is time consuming and expensive.If the seller does have a mortgage, then it's far more complicated and more of a "Subject 2" scenario where you're not taking title but making payments. 

Meaning, if your PITIA is $650 per month, they will only allow you to use $650 of rental income on the subject property even if the 75% calculation is higher than that amount. 

Hi All, we have a decent portfolio of Single Family Residentials in the DFW area and are now looking to both diversify and get a vacation home for us that we can frequent as well.

Mortgage payoffs can frequently be higher than the amount of the original note - especially if the owner did not pay for a while.

  $44,000 of this debt is federal and currently isn't subject to interest rates due to the government putting a hold on this.Without getting into the nitty gritty, I've got about $1000-$1500 per month of "extra money" (Mindy would hate me for saying that). 

I was told recently that in Texas, unlike some other states, it did not matter whether you put the property in an LLC or any other entity as a tenant can still sue you (the owner of the LLC) and all your other assets can also be subject to risk.

Passive investors like those types of investments for both cash flow and appreciation at sale (forced value add is very frequently a large component of the plan).

Also be ware for conventional conforming loans, they are subject to Fannie Mae / Freddie Mac underwriting.

Why not write a contract subject to obtaining a title commitment with acceptable exceptions and exclusions from coverage?

Listen to all the Pod Casts on this subject, especially one by an Asset Protection Attorney