Mortgages & Creative Financing

Buying "Subject to" Existing Financing – Subject to Foreclosure

Expertise:
3 Articles Written
The real estate investing craze that falls just behind the business of buying directly from the bank with Short Sales or REOs is buying “subject to.” This non-traditional method is simply purchasing real estate subject to the existing financing. The financing that is held by the seller stays in place, the mortgage on the property [...] View the full article: Buying "Subject to" Existing Financing – Subject to Foreclosure on The BiggerPockets Blog. This content is Copyright © 2017 BiggerPockets, Inc. All Rights Reserved.

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    Steven Boorstein
    Replied over 11 years ago
    Milton, nice post. Subject to has gotten a bad rap as you can see from the states that are trying to put law on the books to prevent it. Investorina seemed to be pretty ethical, but there are a lot of unethical investors out there too that don’t care about sellers and figure better the seller gets hurt then them. I’m not opposed to sub2 deals and I think your story just goes to show some of the unseen problems investors don’t think about. It also show how this is real money and real financial lives that we deal with when we run our businesses.
    Tara Jacobsen
    Replied over 11 years ago
    I have never understood the concept of lending your credit and loan to someone else. I generally see this done because the buyer could not qualify for a loan on their own merit. In Florida we are seeing a lot of lease options where the first years rent is increased to add to the down payment and then the home is sold outright. At least this way the seller will not face the same situation that they did with Investorina since they are responsible for paying the bank until the house is sold.
    Anonymous
    Replied over 11 years ago
    Nice post. Thanks for informing for potentional dangers hiding inside property deals. Documentation is very important of any deal and core in case of big deal.
    Micki
    Replied over 11 years ago
    O yeah. We have to be very careful with that.
    Jerry Maleesh
    Replied over 10 years ago
    Does anyone know if credit checks are common place in a purchase option? We are trying to invest, but since I was laid off we cannot get our hands on the equity in our own house right now and are looking into other purchase options. Our credit is fair but not great. We are trying to purchase option and then get a tenant buyer in the property.
    Jay
    Replied about 10 years ago
    On the flip side, it can save someone’s credit if they cannot any longer afford their mortgage or can’t sell given the current market conditions. Seller financing can work out. The seller should check their credit every month to insure the payments are being made. Reply Report comment
    Jay
    Replied about 10 years ago
    On the flip side, it can save someone’s credit if they cannot any longer afford their mortgage or can’t sell given the current market conditions. Seller financing can work out. The seller should check their credit every month to insure the payments are being made.
    jaime
    Replied almost 7 years ago
    Question to Subject to Existing Financing: So when using this method to invest in property, at what point does the property actually become yours? The transfer of title is transfered to the investor but the financing is still in the sellers name. So if you stop making payments then the house forecloses on the seller. I guess what i’m trying to say is if the title is transfered to the investor but the financing mortgage remains with the seller, at what point does the investor gain from this? Does this make sense I hope? Lol! you can see i’m a little puzzled! Hope to hear some response, thanks!
    Arch
    Replied over 6 years ago
    Would this transaction trigger a “due on sale” clause?
    harriette
    Replied about 6 years ago
    Who can help with a subject to deal? is it the title company of an attorney or who helps close a subject 2 deal? If it is a title company what is the name of the title company?
    Ayodeji Kuponiyi investor from King of Prussia, Pennsylvania
    Replied over 1 year ago
    If the mortgage payment is fixed, how do you suggested getting the funds to bring the mortgage current?