No existing insurance in potential sub 2 deal
Recently ordered JohnLocke's book and have a few pre-foreclosure leads in hand but have a question on one property I'm looking at. Since the whole point of sub 2 deals is to leave the existing financing, insurance, etc in place, is it possible to complete a sub 2 deal and then place new insurance on property? Wouldn't that trigger the DOS? Current owners (in pre-foreclosure) tell me it "ran out" and the property is currently uninsured. any suggestions on how to resolve? I appreciate the feedback!
mctrujillo
Just about every lender I have seen will place insurance on the property if the sellers insurance expires. This insurance is usually at a very high premium rate. They do this to protect their investment.
I think if you investigate further you may find the lender placed a policy on this property. This policy will need to be cancelled and a new policy placed in effect.
All you have to do is have the seller get a new insurance policy, you will probably have to pay for it since they are in pre-foreclosure and it doesn't sound like they have any money. This is not a big deal, just make sure you calculate your offer with the cost of the insurance in mind.
John $Cash$ Locke
Thank you John! Without experience, if the deal doesn't look like a text book example, it makes you pause and ask for HELP! Thanks!