taxes and insurance with sub 2

Howdy folks, I’ve been buying, fixing and renting Reo’s for a few years now. I want to step it up and get more involved. I’ve done some homework but am still mostly confused. Any help would be appreciated.

when you do a sub 2 deal. What are the issues with taxes and insurance.
1- Since you will be on title you would be responsible for taxes right?
2- And wont you want your own insurance?
3- And wont the lender notice if the name on the insurance changes.
4- And do you have the seller waive the tax and insurance escrows?
Wait, I have more
New subject
When you do a sub 2
1- If you can pay there equity yoursef if there is any, is there any reason you need to open an escrow?
2- You just need to search title right?
3-but say you use part private money for there equity and some repairs than you need to open an escrow account, right?

Thanks in advance for any help. JS

Another newguy here. There are some really smart and well informed moderators here from what I have seen.

This is my pathetic attempt to repeat what I have learned from them.

I seem to remember them answering similar questions.

1- You will be paying the taxes…or rather your tenant will when they make those payments.
2-You dont need your own insurance but you will want it.
If you get it and the lender notices…oh well. “Lenders want payments”. Anyway, this is not a “due on sale” issue.
3-If a lender sniffs around, the seller can simply acknowledge (because you informed him to) that he put his interest into trust which is all they need to know…done deal. The trust (you) now control the property which accounts for the insurance change.


1- Why would you want to pay their equity yourself (especially with that higher interest private loan) and get rid of all that cash you could have working for you elsewhere?
2-Dunno, not sure what your are asking. Lets wait for the experts.
3-If you use private money they (lender) will need the escrow to disburse funds as needed.

Notice this is my first post so please bear with me, I am still humble and learning.

Best of luck…

thanks for the response.
I would only pay for their equity if it was a few thousand $ or less with my money.
But if it was say $30k, I would want to use private $, right? In that situation, I would be trying for a quick resale.

Thanks again , JS

I guess you can structure that how you see fit. If you are planning to sell the property I have read Conti and Finkel have done deals where they cash out upon sale of the property. If that doesn’t work for the seller then you could work out a partial payment and the rest due upon closing.
My understanding is that the Sub2 process leaves wiggle room in the agreement.

Best Regards