Taking a property “subject to” the existing mortgage means that you get the deed but you do not take over liability for the loan. The loan stays in the previous homeowner’s name. Subject To Deals (aka Get the Deed) are one of the 
most creative ways to take control of a property while also helping a seller that is no longer able to be financially responsible for the loan.
“Subject-To” (aka Get the Deed) is a real estate financing technique that all serious investors should know and understand. It’s a hybrid between taking some responsibility with a sandwich lease option and taking full ownership responsibility. But your risk is minimized because the seller’s name remains on the mortgage (but not on the deed).
“Subject-To” (aka Get the Deed) gives you full control while minimizing risk.
Little or No Money Down and NO Credit Needed!
A great amount of flexibility comes with this method of control. Everyone of these deals is going to be unique. In many cases, the seller will be several mortgage payments behind when they realize giving up the deed is in their better interest rather than going through a foreclosure. Little money down could be the amount in back payments that you assume when you sign your name to the deed. But even if there is a little money down, it doesn’t have to come out of your pocket.
Among your many options is to have the seller continue making partial payments towards the mortgage until the back payments are made up. But ideally, you don’t want to have to rely on the seller for anything after you have the deed to the property. Your preferred method can be for you to begin making the mortgage payments and use another way to bring the mortgage current. That gives you complete control moving forward without any reliance on the seller. One way to do this is using a lease option to move in a tenant-buyer. You could use all or part of the tenant-buyer’s option fee to pay the mortgage back payments.
Using Subject To Deals (aka Get the Deed) means you don’t have to share any of the rent payment with the previous owner. You can craft a lease option without needing to meet the needs of the previous owner. The lease period can be as long or as short as you and the tenant-buyer decide. You control the maintenance responsibilities. You have full control of the lease option.
Taking over the seller’s existing mortgage means you do not have to apply for a new mortgage in your name. Everything moves very fast. No application fees. No credit checks. No income verification. No appraisals.
NO Credit Needed!
Why a Seller Will Sell But Keep the Mortgage
This can be a win-win scenario for both the seller and the investor. Sellers can avoid foreclosure and the devastating impact that it has on their credit by allowing you to take over their existing payments. Importantly, in their time of financial need, the seller will have monthly on-time payments recorded on their credit report as you make the mortgage payments in their name.
Among the many creative ways to structure Subject To Deals is refinancing the loan at some point in time. After you’ve made several on-time payments, many lenders are very willing to refinance the loan into your name with favorable terms and conditions. A good time to do this can be shortly after the previous owner has made up all of the back payments owed. Another is to lower the payments on a high-interest loan. And another is when a lease option buyer takes out a new loan in their name. Or whatever makes the best WIN-WIN-WIN for everyone involved.
As an ethical real estate investor and problem solver, you are the “Knight in Shining Armor” that relieves the seller’s headache and saves their credit!
The seller is helped and will thank you!
How Investors Profit with Subject to Deals (aka Get the Deed)
As an investor, you want to control as many properties as possible with as little of your own money as possible. The Subject to deal is a clear leader among the best methods to do this. Typically, you don’t even make a down payment. You simply take over the payments on the existing mortgage. Then you have complete control to earn your profit any way that you choose.
If the seller has some equity in the property (but can’t make the payments), you may have to pay more for the property than is remaining on the mortgage. But that doesn’t mean you need to make a lump-sum payment. You can defer the payment. You can use other people’s money with a lease option to pay the seller. You can simply make a second mortgage or wrap-around mortgage payment to the seller each month. And there are other creative solutions, but the bottom line is you have full control of the property with subject to deals!
With nothing down and no credit, you financially benefit from subject to deals in these and other ways:
Lease options. Subject to deals begin with little or no cash but are easily transformed into highly profitable lease options with 3 paydays!
Appreciation. Over the long term, you can depend on real estate values to go up.
Inflation. Once the sales price is locked in, the value of future dollars used to pay off the mortgage are worth less than today’s dollars (with a fixed-rate loan).
Positive cash flow. By following proven and sound business practices, every one of the properties that you control will generate cash into your bank account every month. You’ll earn a passive income whether you are at the beach, on the mountain, or working at another job.
Depreciation. Unlike personal residences, investment houses can be depreciated on your income taxes each year. Other types of businesses typically pay between 35% or more of profits in taxes. Depreciation is a huge advantage for real estate investors.
Tax shelter. Occasionally, real estate deals do result in financial setbacks (often temporary). Losses can be used to tax shelter other income you have. There are many write-offs you may be able to take – thanks to real estate.
Subject To Deals (aka Get the Deed) are a great way to invest using other people’s money.
Subject to deals (aka get the deed), is only one on a long list of creative ways to control more properties by using other people’s money. Compounding your profits is done by mixing and matching it with all of these other proven methods.
- Investing In Real Estate with Lease Options.
- Advanced strategies for Buying and Selling with Lease Options.
- Your Wealth Building Arsenal.
- Add Personalized Coaching.
- Cooperative Lease Options.
- Expand to Get the Deed “Subject To.”
- Round it all out by Working with Realtors.
Happy Investing!
Wendy Patton
For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
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