Buying Houses “Subject To” the Existing Mortgage Part 1

September 29, 2014 in Investing In Real Estate


Subject to financingI have a guest post for you today from Michael Quarles.  You might remember that I interviewed Michael a few weeks ago on a podcast for “Let’s Talk Real Estate Investing”.  If you missed that phenomenal interview on negotiation you can Click Here to listen to that show.

Investors are always looking for creative ways to buy property without using any of their own money or credit.  Buying houses “Subject To” the existing mortgage is a great strategy especially when there is little equity in the house. You can often pick up a nice house in a great neighborhood with this strategy.   You just take on their existing mortgage and in most cases you can put a tenant right into the house without making costly repairs.

In this post today Michael not only teaches you about this particular strategy, but he tells you exactly what to say to put a subject to deal together.  I have broken this comprehensive post down into two parts, so look for part 2 tomorrow.


That Initial Meeting with the Seller

At times we buy houses Subject To the existing loan. Subject to happens to be a great way to buy property with little money invested in the property.

When buying subject to there are two basic property equity positions, one a property with between 5 to 20 percent equity and two a property with massive equity.

The advantage for a seller who has limited or marginal equity is that when they need to sell typically they cannot sell their property without feeding the closing if they use a real estate professional where if they sell subject to they can.

That said it is important to have a purchase presentation which outlines the advantages to the seller in a way which causes them to understand and agree to. The following is one I have used with great success.


It Begins at the Front Door

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