Bringing In New Financing On A Sub2
I think the Sub2 technique is great in a foreclosure situation or any motivated seller situation when you are intending to fix and flip. If you've done your homework and are confident that you can sell the property before the bank could get a "due on sale" clause to completion, if they exercised it.
My question is what you all think about bringing in new financing if you intend to hold the property when you have used the Sub2 technique to acquire the property.
We have a foreclosure trainer in my area that not only strongly suggests it but says it is pretty much a must.
Any comments will be appreciated. Maybe even John$Cash$Locke would care to comment.
Dave
If the existing financing is GOOD why would you attempt to replace it with NOO rates, credit report liabilities exposure, and necessary closing costs? Our opinion is to hold the financing in place, leverage all tax and cash flow benefits and remain prepared for new financing when needed.
Eric & Rosa
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Dave,
Why bring in new financing when you don't have to, there are buy and hold Subject To investors, one that comes to mind is the owner of this site.
I walked him through his first Subject To deal and he likes buy and hold, as a matter of fact he turns down deals because he does not want to turn around and sell, so if the property does not fit his buy and hold method he passes.
Using the Subject To method you can do whatever you want with the property since you own it.
Eric & Rosa have some great input on some of the benefits of Subject To also.
Don't think that if the bank found out you sold the property they are there the next day with the DOS police, not quite they must go through foreclosure proceedures, which gives an investor time to do what they have to do with the property.
If you haven't sold the property by the time this happens, if it should ever happen, then you should have never purchased the property to start with.
John $Cash$ Locke
John, Eric & Rosa,
Thanks for your prompt response to my post.
I had a feeling the pros on this site would have the answers. I appreciate your time in dispelling the doomsayers.
Speaking of doomsayers, why do you think it is that some trainers and "Gurus" are constantly banging the "Due On Sale" drum?
Dave
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"Opportunity is missed by most people because it is dressed in overalls and looks like work." (Thomas A. Edison)[ Edited by dealfinder on Date 06/28/2004 ]
Dave,
I have a good friend who is a major guru, he bangs the due on sale drum, only because he feels his method avoids the due on sale clause, so he feeds on the "fear factor" as one of the ways of selling his course. Please don't tell him I said this if you know who he is, but knowing him he would only laugh.
Not long ago some poster asked "Guru's Name vs Locke" on his board, well the DOS hit the fan, now I am not one to back down, so I posted on his discussion board, my final words were you have a great leader in the Guru's Name, one of his posters replied that I was a "class act". Someone saying this on his site was like saying Ford is better than Chevrolet on a Chevy discussion board.
Remember most of what you read is done by marketing people, the course writers or gurus when they meet are telling war stories to each other about deals they have done, where they will be next or some other thing totally unrelated to investing.
Is everyone beginning to get the picture?
John $Cash$ Locke
John,
I got the picture! Thanks again for your willingness to take of your time to help.
Dave
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