Buy Sub2-Land Trust
Advantages Of Buying “Subject To”
Taking over property “Subject To” has several advantages that are especially nice if you are a beginner or have limited funds and/or limited credit. Mainly, you have the ability to own nice houses without having to come up with a large down payment or having to qualify for a loan, and the closing costs are minimal.
You also have multiple exit strategies. For instance, you could keep the property for yourself as a rental, or you could fix it up and retail it. You can even pass the no qualifying deal onto your new buyer.
Disadvantages Of Buying “Subject To”
As for the disadvantages of buying “Subject To”, as we said earlier, you always have the due-on-sale clause issue. However, as you go through this system, you’llleam more ways to get around this issue as well as limit your liability.
The due-on-sale clause also will limit your ability to resell the property without paying off the loan. This is because many homebuyers will be reluctant to invest money and move into a property when there is a chance that the bank may call the loan due, even if the chance is a slim one.
See Due On Sale Clause – There is no such Thing as Due on Sale Jail by Attorney Bill Bronchick
