Sub2's And Rising Interest Rates
(Still trying to figure out all of the ramifications of doing a sub2 deal).
I've read through John Locke's Sub2 manual, and have one concern:
what happens to the seller's loan when interest rates rise? Won't lenders want to call in a loan that has a lower-than-current market rate? How do you protect from that event? Has anyone out there ever dealt with this?
Thanks for your thoughts.
Put your property in an land www.trust.The bank will assume the initial owner still have position of the property.
luckofthedraw,
If you notice I do not teach buy and hold methods. I doubt if any fluctuations in interest rates in a 2 year period are going to make any difference.
In all the years I have been investing the interest rates have gone up and down, the clerks at lenders office's who were watching the interest rates must have missed my deals.
Wait a minute come to think about it, all my loans were current you don't suppose they don't look for performing loans to call do you?
No more excuses, get face to face with some sellers, get the deal and the deed.
John $Cash$ Locke
reibyme,
Quote - Put your property in an land www.trust.The bank will ""assume"" the initial owner still have position of the property -
Those "a$$ u me's" could bite you in the butt evertime.
Whether you use a Trust or not if the payments are not current nothing will protect you.
John $Cash$ Locke
I wouldn't worry too much about those loans being called due. Just keep making the payments. If you have a lot of properties then the chances rise of having one of them called due by the bank but at that time you should have your credit facilities in place to handle such an event.
The thing to worry about in regards to high interest rates is how are you going to handle all of the deals that come your way. When the rates get way up there then the number of creative deals will track right along side of it.