Looking for Advice: Potential "Subject To" Deal vs. Fix & Flip

[Consuela Adams]

Hey everyone,

I'm looking for some guidance on what I originally planned to be my first fix & flip, funded by a private money lender and partnered with an experienced flipper. However, after digging into the numbers, I’m thinking this may be better suited as a Subject To deal instead.

Property Details:

• Owner still owes $242K on the mortgage.

• ARV for similar properties is around $350K–$360K.

• Rehab estimate is roughly $60K–$70K.

• Seller says the monthly mortgage payment is around $1,100 at ~7% interest.

• Property has little to no equity, so it's not ideal for a traditional fix and flip.

Given the numbers, a flip would only work if I could buy it well below the existing mortgage balance, which clearly isn’t the case. So now I’m wondering:

1. Could this be a good candidate for a Subject To deal?

If so, what should I look for to confirm if this structure makes sense?

2. What documentation do I need from the seller to verify if creative financing is even an option (e.g., mortgage statement, payoff amount, loan type, etc.)?

3. What other information should I be collecting to analyze whether this is a good opportunity?

4. If this is a viable Subject To deal, is it possible to partner on it with another investor, or would it be better to wholesale it to a buyer who specializes in creative finance? 

I appreciate any insights from those who have experience with these types of deals. 

Thanks in advance!

[Don Konipol]

Quote from @Corby Goade:

Quote from @Consuela Adams:

Quote from @Corby Goade:

You need at equity or cash flow to make most deals work. This one has no equity and a loan at 7%, which is basically market rates, so anyone could get a mortgage on this property at the same rate the sellers have. What is the upside here? Why are you spending time on this one? 

Rent in the area is between 2,000 and 2400. The area will.most definitely appreciate with ARV is the 400/500K! 

 But what makes THIS property unique? Sounds like you could buy any property and get the same appreciation. 

Anyone who thinks they can predict real estate prices is too young or inexperienced to have been through 2008 - 2011.  Or been through Detroit’s numerous “comebacks”.  Or invested in any mid size mid western city in the last 50 years.  It all seems SO OBVIOUS, when it’s the only experience you’ve had.  My dad, who was a stock market speculator, told me something 60 years ago about the stock market that’s true in real estate and any investment “ never mistake brains with a bull market”.