Subject to, lease option, wholetail?
Hello, BP!
Over the weekend a motivated seller found my name via google (I assume my BP profile came up) and wanted me to help them get out of their condo in Cedar Rapids, Iowa. I have some ideas on how to create a win-win for myself and seller, but wanted to run them by BP nation for some advice.
Details: It is a 3 bed, 2 bath condo with 1 car garage. Assessors site value is about 96k and they paid about 80k for it in '09. They owe about 71k on the loan. HOA fees are $154. I spoke with the president and the HOA finances are in good shape. Seller says that they want to close fast and would like to get what they owe, plus enough for 2 months rent and enough to cash to move out of state.
If possible, I would like to purchase this property myself, do the rehab and sell it. I am thinking the best win-win for this deal to keep my out of pocket costs at a minimum would be to take over their mortgage "subject to" and pay them about 5K. Then I could rehab, rent it, and have enough equity in it to sell it at a profit if needed. However, I don't know much about the "subject to" deals and really worry about what would happen if the lender actually did use the 'due on sale clause'.
Any advice on how to proceed would be much appreciated. I have also considered a lease option, but am open to other ideas as well. Thanks in advance!