Real Estate Investing - Simple Insurance Solutions For Complicated Subject-To Deals
A big sticking point for many real estate investors who like to use the Subject To strategy for property acquisition is: How do I handle property insurance? The issue isn't as simple as you think, because: Home owner's insurance is always required by every mortgage - it is not optional, so you can't merely cancel the former owner's policy without risking the mortgage lender placing a (very expensive) forced coverage policy on the property It may be unwise to simply rely on the former owner's policy for coverage, because in the event of a claim, the former owner would no longer have an insurable interest in the property due to their transfer of ownership to you Making yourself the beneficiary on the former owner's policy might work, but it's also probable that such a change will give rise to scrutiny from the mortgage lender, and the more scrutiny your deal receives, the more likely it becomes that the lender may exercise their Due-on-Sale clause rights Before I give you my thoughts on this, I'd like to point out that you must speak with your own attorney and insurance professional about this issue. ...
email if entered not will be shown.
Tags forbidden.