Selling house as "Subject to"

[Raj Kumar]

Dear Real Estate Experts,

I have an investment property that has been challenging to rent out. Recently, I received a proposal from a potential buyer who is unable to secure the loan they need. They are interested in purchasing the property on a "subject-to" basis. I am seriously considering this option, where the property would remain in my name with the existing mortgage until the buyer pays it off completely.

I plan to involve a real estate attorney in this transaction, but I wanted to seek advice from experts like you on the key considerations and steps I should take during this process. Additionally, I am interested in understanding how to structure the deal to address potential issues like a "buyer default."

Your insights and guidance would be greatly appreciated.

Thank you,
Raj

[Scott Trench]

It's just a risk of doing this. There are anecdotes of investors wriggling out of having to deal with the due on sale clause, transferring ownership back to the original owners, etc.

But, at the end of the day, I'd just make darn sure that I was capable of making the numbers work with market financing if I was forced to refinance and got called due. 

I worry that a lot of investors who don't have that capability are going to find themselves in some trouble in the years to come.