Subject to Existing Mortgage

6 Replies

I've heard a lot about getting deals subject to the existing mortgage. Does anyone know how this works? To me, this would be beneficial starting out and not having the finances or the ability to get another mortgage. Any help would be greatly appreciated!

Hi Thomas,

Welcome to Bigger Pockets! You'll want to check out podcasts #2 and #65. They will introduce you to the concept of Subject To deals.

You can stream them through your internet browser or download them to you device. They are a lot of fun to listen to and contain loads of helpful info.

Happy listening !


Hook up with @Brian Gibbons - nobody better with the Sub2 stuff Thomas.

Good luck :)


Don't worry about 'getting out of a deal'. One day you'll learn you'll always have plenty of buyers and not enough deals to keep them all happy. So focus on just getting into deals.

If you think about the paperwork, no matter the exit plan, from the owner, you'll want a signed Deed and a Power of Attorney. With those 2 documents, you can do a subject to, flip it, turn it into a rental, etc. If you throw only 1 exit plan at the homeowner, you can't change that exit plan, and what if you had a cash buyer that was going to net you $30K? You then are stuck.

See how this works? Just worry about learning how to perfect getting into deals. There will always be tons of buyer 'if' you can perfect 'getting into deals'.

Good Luck.


Quick question @Mark Kemp because I know you have some history doing these types of transactions. If the property is worth 100 and seller owes 50 and say you offer 60, what exactly happens with the 10k equity position? Is that paid out of pocket or how is that done?


It's paid to the owner when you close escrow. Whomever buys my deal knows its' $60K plus my fee. He can pay the $10K and leave the $50K loan in place, get a new loan or whatever he chooses. Some buyers leave the loan in place as they are fix & flippers, others are landlords, get the house fixed up and get a nice 80% ltv loan to pull the money they spent buying and the property and the fix up costs back to them.


To: fellow BP members

    I am new to BP and so far so good! I do have a question re guarding this subject on "subject-to" the existing mortgage. Would this be the same as lease or rent to own.

  And what does the signed Deed do exactly? And what is the signed power of attorney for? Would this be a Special power of attorney, and what should it consist of? Who would I contact or deal with for this type of transaction title company, Real Estate Agent, Owner?

 This is a very interesting subject. And I would like to learn more about this type of transaction. 

  Thanks Fellow BP member!

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