Just starting out

If I would like to do a Sub2 on a property that is in the preforeclosure stages, (forebearance) What are some of the pitfalls that I could run into? I have years of experience in real estate and financing, so I have a clear understanding of how alot of it works. Every once in awhile I have the opportunity to do something like this and I always pass it up because I never look into it. What documentation do I need to have filled and filed? Here’s the situation on the home.

  1. Client owes $60,000 on the home. (he has lived their for 11years)
  2. Home is worth 90-95k. (comps support the value)
  3. Home is in good condition
  4. Client is ready to do this.

My plan would be to get the deed. The client would move out of the home I would lease w/option. I have the ability to check credit very quickly, as well as determine if the leasee is financable. I would like to try to flip within 1-3 months. I have the cushion money to make the payments if the home sits vacant for 3-4months. Any of your expertise would be greatly appreciated. Also, would it be out of line to offer a percentage of the net proceeds back to the client upon the sale of the home? Sorry for the long story, I just wanted to give as much info as I could.

Good Morning Booker,
This is a standard situation, and it appears it may cash flow. Will the rent cover the debt service ? If so I use a one page Purchase agreement for these, sub2. It also look like a good candidate for a and or assigns for a quick 20k, no money out of pocket.
You will need a purchase agreement
Lease agreement
and option agreement,
and a wheel barrow
Darin