Posted by Chris in FL on May 01, 2006 at 07:58:50:
Thanks, John… I see your posts on here frequently, and always very good! I guess I knew most of what you said here, and I concur. I have got comfortable with the subject-to idea once or twice before, but every time I get close to using subject-to the same questions return to haunt me. Then I forget the details that make it okay (if you can’t tell, I am normally a ‘get the best price, pay cash as is’ guy). I still prefer cash and lower price, but if a subject-to deal presents itself I won’t turn it away (though I will hit up someone that does them every day to walk me through the paperwork, etc.; I have a lot of local investor friends).
I think I mentioned above, I recently had a subject-to deal, and was preparing to do it, but the seller decided at the 11th hour that they wanted my lower cash offer instead (paying $70k cash instead of $77k terms for a duplex worth $90-105k; $1,080 rents; I can live with that).
I hope it is implied that I would perform my end of agreement if it did go subject-to. Fact is, if I did it subject-to, and the note got called immediately, I would pay the lender off. That is just how I operate. The deal, from the beginning, would have to work even if I was forced to pay it off immediately, because I take my responsibilities that seriously. Even though I warned seller of risks, I would never let it go into default. Those who are doing subject-to and not making the payments are slime, and my understanding is that many are starting to receive the fate they have coming to them!
John, thanks again. Best wishes!