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Updated about 11 years ago on .

Account Closed
  • Castlewood, VA
57
Votes |
177
Posts

How to Handle Transactions in Sub2 Deal?

Account Closed
  • Castlewood, VA
Posted

Question for the experienced Sub2 investors...

Based on your experience, what is the most efficient method for an investor to pay the seller's lender -- and make absolutely certain that payment has been made -- without making any missteps that could potentially raise the probability of the lender executing the Due on Sale Clause?

Do we, the investor, elect for:

  1. Play a pseudo shell game where the investor pays the seller and the seller pays the lender?
  2. Make the seller's monthly payment directly to the lender (by check or ACH debit)?

Either way, what proof of payment should be disclosed to the party who is not paying the lender?

Full disclosure: I'm not a Sub2 investor yet, but simply trying to cover my "trust but verify" bases here.