Subject 2 Financing

[austinrwilliams16]

I am in the process of learning about subject 2 financing. From what I understand, I can purchase a house through taking over someone’s mortgage. I can change the deed into my llc’s name and set up a 3rd party service company to make those payments. Then I could do a lease option exit for people with bad credit (other exits strategies acknowledged). Has this been looked down upon amongst the industry? Or is this just not really known amongst loan officers and the mortgage community? I plan to move into a position where I’m doing loans and looking for these types of deals on the side. If anyone else has interest in this as well I’m in Pensacola FL!

[Dustin Owen]

This is not a typical residential mortgage industry concept of specialty. This is a high level (possibility too slick for your own good) professional real estate strategy to take down a property without actually buying it. My concern with Sub-To is “What happens when / if the seller’s lender finds out the title has been transferred out of the seller’s name. Will they call the note due and payable within 30-60 days?” These opportunities are not readily available and are not for novices. I would not recommend a MLO even consider trying to learn these complexities. If your career is going to be full-time real estate investor then maybe this could be a strategy you wish to deploy when (and only when) it makes sense.

Don’t lease option with someone with bad credit. That would be like wanting to enter into a health competition with someone who is obese.

[Author]

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