Subject to deal

[Carolina Lau]

I have a small portfolio of houses I'm interested in selling in Jackson, MS. I have a commercial loan -- 30 year fixed at 4.625%. The owner of the loan is not willing to do an assignment. So a prospective buyer suggested a subject-to deal where the title moves to the buyer's LLC. The loan remains under my LLC, but the buyer makes the payments. I'm trying to educate myself on this way of financing a deal. What are the pluses, minuses and potential pitfalls?

[Wayne Brooks]

@Carolina Lau Do Not sell on a straight sub2….you have no foreclosure rights if the buyer stops paying. Sell on a wrap mtg, even if your mtg is the same balance as your existing loan.  That way, at least You have a mtg that You can foreclose on if the buyer defaults.