Protection against market collapsing
I just ordered John's subject-to book, so I still haven't read it, but I have a basic understanding of how it works. It sounds much easier to sell someone on this idea, rather than the old l/o idea.
Now, my question is regarding falling markets. Suppose you negotiate with the seller and the remaining balance on the loan is $225,000, and in two years when the buyer is going to refinance, the market has collapsed and that house is only worth $180,000? What happens then? Are you forced to take a loss? I'm a bit confused about this area, so if someone could give me some insight, I would appreciate it. Thanks!
When do market collapses, and what are some of these collapse reasons.
Thanks.