Insuring a Sub2 Deal

General Real Estate Investing
1

Until a few months ago I was able to purchase a property sub2, keep the seller’s policy in place, get a new policy in the mortgage holder’s name listing the bank as the 1st additional insured then me as the 2nd additional insured. Once this policy was in place, I would have the seller cancel the the original mortgage holder’s policy and get the new policy accepted by the bank.

Now my agent is saying they can not do that. They say keep the mortgage holder’s policy in place and get my own policy to cover my position. So 2 policies in place.

How are other folks keeping their sub2 properties insured?

2

Your agent is wrong. The way I do it is have my buyer get a policy in their name and have both myself and the bank listed as primary/secondary loss payees. Also, I list the original borrower as an additional insured.