@Amen Hailegiorgis thanks for asking. Before we talk structure, we need some additional info. You need to see the mortgage payoff and be sure to understand every part of it. Refi in 10/2019, loan amt was approx. $309k (rate 3.28%, 30 yr amo, $1,350 P&I). Today’s balance would be approx. $280k if the loan was current. But the payoff is $364.9k. That is a lot of missed pmts (PITI). How much are the arrears? The lender will require the loan to be brought current and if you take over the payments, you must come up with the cash to do that. Are there any other liens? When does the balloon pmt come due? Acquire Subject to and your cash needs: $$$ Pay for arrears $5k Closing costs to acquire $20k Cash to seller Exit Strategies – Do these make sense to an end buyer? Rental - Rent income of $2,100 less P&I pmt of $1350 = $750 for insurance, prop taxes, prop mgmt, vacancy, repairs, and profit. Annualize the net amount and divide by cash out of pocket to get the yield. With $$$ for arrears, $60k in repairs (maybe $40k if just renting), $20K cash to seller, & $5k in closing costs, you’re not going to like the yield (aka Cash Return on Investment, CROI). If the cash needed is borrowed (2nd lien, int rate 10% or more), it will significantly reduce net CF and still is not likely to provide a decent CROI, if any at all. Fix and Flip for End Buyer $364,900 Loan payoff $ 20,000 Cash to seller $ 20,000 Wholesale fee $ 60,000 Repairs $ 60,000 Holding, finance & closing costs (buying and selling) $524,900 All in costs $500,000 ARV (sales price) The $365k payoff amount and repairs of $60k make this a challenging deal no matter how you structure it. Even if you get it under contract without any cash to the seller, would it be appealing to an end buyer investor? Do not overlook the buyer's holding costs.

@Renee Monegain well done and great explanation with a real example.

Hi Isaac, I've bought properties Sub2, what questions do you have?