Things to keep in mind when buying a SUB-TO deal

[Angie Castro]

Hello! 

I recently got the opportunity to purchase a subject to deal with a VA loan at 2.6% interest rate. I'm very excited to move forward but is there anything that I should keep in mind? It's a hybrid deal because the seller will also do seller financing for $83K of the equity at 0% interest rate.

Here are the numbers:

PITI (VA Loan) monthly payments of $1,203 with a loan balance of $203,000

Seller financed at 0% $83K with monthly payments of $300

Total monthly payments: $1,503

Monthly rent: $1,950

Down payment: $35K

The house was built in 2005 and it's spacious. It doesn't need any repairs just to change the living room carpet to LVP. Roof and HVAC are in good condition. I'm very excited for this deal but what should I keep in mind from a legal standpoint? I know SUBTOs are not for everyone and there is a level of risk. I'm okay with the risk as long as I understand it. Any recommendations?