Only trying to help … - Posted by Sammy
Posted by Sammy on September 23, 2003 at 18:17:06:
I was only trying to make the point that doing lots of subject to deals can be VERY dangerous, especially for those with limited resources i.e. 99.9% of the readers of this forum. What happens when 2, 3, 4 or more of your properties have the loans called due in a short period of time? Chances are you won’t be able to refi them all, then what? The majority of readers of this forum would be in a very bad spot. Even if you take a property subject to a loan with a balance that is only 80% of what the property is worth, unless you are able to refi the property very quickly you can get into a lot of trouble. You can’t even get a bridge loan from a HML with 20% equity, they just won’t do it. So again I’m just trying to point out the reality of doing sub 2 deals since you appear to be new at it (you said you’ve only done 1 so far). It’s tempting to rush out and do a ton of sub 2 deals because they are so easy to find, but you’re taking a big gamble unless you have significant resources to back up your actions. Do some research and see what happens to investors who do a bunch of subject 2 deals and then get into trouble i.e. get a bunch of loans called due, stop making the payments for one reason or another. They go to jail for fraud half the time, even if your intentions were good.