Sub2 strategy and Due On Sale clause

5 Replies

Hi Everyone,

I have a motivated seller with two properties (a duplex and a condo) in Columbus / Central Ohio area. Units have renters, but he wants to retire and be out of the game. He is willing to do a Sub2 the existing mortgages for most of the $$$ - but I am worried about the Due On Sale clause. Both mortgages are through huntington Bank. Does anyone have experience with DOS clauses with loans from Huntington bank. We don't want to trigger a problem. The other option is a Lease option - but then he still has the properties in his name and has to deal with payments, taxes, etc (and he wants to relax).



I once tried to call Huntington to get their approval to quit claim into my single-member LLC - not a chance. Those guys at Huntington are so stiff you wouldn't believe it...LOL

I wouldn't :)

@Ben Leybovich

knows OH

Why don't you find out what PITI is on each property and see how close it is to market rent

If market rent were less than PITI you might lease with option, your lease payment covering the cost of the PITI, but you getting a cheaper option to purchase price

@Tyler Walker

Remember you make your profit at the purchase, you don't ever pay retail even on terms

I have several sub2 deals in my buy and hold portfolio but have only dealt with big banks.  I do notify each bank that I am now the legal owner of property and have not had any issues.  If the numbers work do the deal.  If the bank calls the note due you can deed it back to owner or try and refi.  You may also try to assume the loan via qualifying if current note has that option.