HOW TO INVEST ‘SUBJECT TO’ AND OVERCOME THE ‘DUE ON SALE’ CLAUSE MATT THERIAULT
it’s not as difficult to execute as it may seem. If
clause found in most loan documents today that
you know how to explain it to the seller, and what
stops most investors dead in their tracks from
steps to take to protect you and the seller, you
moving forward on a ‘subject to’ deal. It’s the
can use the ‘subject to’ strategy over and over
primary reason people are searching for answers
with minimal risk.
of “how to invest subject to.” Once you understand
the “due on sale” clause’s history, purpose and
As great as this strategy can be in your real
how to work with it, you’ll find that there’s really
estate investing, however, there are some things
nothing to fear but fear itself.
of which to be aware. There are precautions you
should take to protect both you and the seller.
The “due on sale” clause, also referred to as an
“acceleration” clause, is an authority clause in a
First, make sure that the seller knows everything
loan document that gives the lender the right to call
that you know about how to invest ‘subject to’.
the loan due. Many people think the “due on sale”
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