Momentum Realty Group
Carolyn Brown, Momentum Realty GroupPhone: (510) 882-3454
Email: [email protected]

Types of "Subject-to" Real Estate Investments

by Carolyn Brown 08/23/2020

Image by Nattanan Kanchanaprat from Pixabay

If you're looking for "subject-to" real estate, you know it can be a good investment. This kind of real estate is purchased "subject-to" the existing mortgage. So the buyer owns the property, but the mortgage stays in the seller's name. Payments are made by the buyer, but it's not necessary for that buyer to obtain a loan, pay all the fees associated with that, and use their own credit to buy a house. It can be an excellent deal for an investor and for a seller who's facing foreclosure or other types of problems. Here's what you need to know about the different kinds of "subject-to"  real estate.

"Subject-To" an Existing Mortgage 

The most common type of "subject-to" real estate has that designation because it's "subject-to" the current seller's existing mortgage. If you want to buy this kind of property, you won't need to get a mortgage of your own. Instead, the seller will deed you the property and you'll continue to make their mortgage payments. This can help you get properties fast and keep you from worrying about things like whether your credit is good. Not all investors like these kinds of properties, but they can be good choices when they're handled correctly.

"Subject-To" Other Types of Liens 

Even though they aren't as common, it's also possible to buy "subject-to" properties that don't have a traditional mortgage on them. These properties might have some other reason that they aren't free and clear, such as tax or contractor liens. If payments are being made on these things and you don't want to pay them off to buy the property, you can offer to buy from the seller "subject-to" those liens. Just make sure you know what you're really committing to, all the liens on the property and how much they're for, in total.

Who Would Typically Choose the Kind of Investment?

Both single-family and multi-family properties can be purchased "subject-to" existing mortgages and other types of loans or liens. When it comes to these kinds of investments, most investors who choose them are familiar with investing already. That's because there's risk involved, and brand-new investors might not protect themselves against these risks as well as they should.

Still, investors who are careful and want to get started in the market can do well with these kinds of properties because they don't have to use a lot of their own money or qualify for mortgages. Then can simply purchase properties, and that can mean a much bigger portfolio much faster than they would have thought possible. If you're looking for a way to build a big real estate portfolio quickly, buying "subject-to" properties can be one of the ways to do that.

About the Author
Author

Carolyn Brown

Hi, I'm Carolyn Brown and I have over 20+ years of real estate experience, serving Bay Area Counties: Alameda, Contra Costa, Solano, Sonoma, Sacramento, and Central Valley. I have a Master's Degree in Psychology and I work part-time for West Contra Costa Unified School District. This has afforded me the opportunity to connect with families and communities.  

I have always been a giver and compassionate about serving and helping others. A real estate career was never my goal but the passion I have to help others changed that and I would love to help you! Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I'd be honored to put my real estate experience to work for you.  

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Also, I am an author. My book, "S.O.U.L Inspiration 4 Life Daily Word" is guaranteed to inspire you and encourage your soul. Giving up isn't an option, and if you desire to become a homeowner, then contact me and I'll show you how. Never let what you see, hinder what you believe. My wonderful book is available online at Amazon.com, Barnes and Noble, and Xulon.com. Let me know if you have any questions. Let's build a legacy together.  

Thanks for ChewzingCarolyn!!!