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

Atlanta, Georgia
Creative Real Estate Financing
1yFollow

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

Consuela Adams
Wholesaler · Atlanta, GA · Member since 2020 · 14 posts · 4 votes

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!

1Reply
34 views

Most Popular Reply

Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
1y
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”.  
Private Mortgage Financing Partners, LLC
WebsiteView Page
2Reply
See this reply in the discussion

8 Replies

Jump to latestLatest
  • Ken M.
    Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
    1y
    Quote from @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!

    .
    Okay, you've got me stumped on this one. Your statement: "Property has little to no equity"
    If the cost is $242K on the mortgage and the ARV is $350K–$360K, even if you put $70,000 into it, that's $312,000 into it and $48,000 equity. What am I missing?

    Subject To rentals don't need the same level of finish a flip needs.

    I'd need to know what it would rent for and how much Principal, interest, Taxes, insurance, (PITI), & HOA fees if, any would come to to get a basic idea if it's possible to cash flow.





    1Reply
  • Corby GoadeBusiness Member
    Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
    1y

    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? 

    2Reply
    • Consuela Adams
      OP
      Wholesaler · Atlanta, GA · Member since 2020 · 14 posts · 4 votes
      1y
      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! 
      0Reply
    • Corby GoadeBusiness Member
      Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
      1y
      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. 

      1Reply
    • Don KonipolBusiness Member
      Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
      1y
      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”.  
      Private Mortgage Financing Partners, LLC
      WebsiteView Page
      2Reply
  • Benjamin AakerPro Member
    Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
    1y

    Doesn't look like it will work as subject-to. The owner really needs to be significant equity to make it work. Only other long-shot option would be to talk with the seller and the bank about a short sale. 

    1Reply
  • Stanley Yeldell
    Member since 2025 · 116 posts · 52 votes
    1y

    Hey Consuela, great questions and solid breakdown of the situation. Here are some insights:

    Is this a good candidate for a Subject To deal?

    Potentially, yes. The key here is the 7% interest rate — it’s not super low, but it could work if the cash flow numbers line up.

    You’ll want to calculate the projected rental income vs. the mortgage payment + any other holding costs to see if the property will cash flow as-is.

    Consider if the $60k-$70k rehab can be financed through private money, as you mentioned, or structured as a separate note.

    Documentation to Verify Feasibility:

    Mortgage Statement (to verify remaining balance, interest rate, and monthly payment).

    Payoff Letter (to confirm exact payoff amount and any prepayment penalties).

    HOA Information (if applicable).

    Property Tax Status (are there any delinquencies or liens?).

    Insurance Info (will the current policy transfer or need updating?).

    Additional Information to Collect:

    Market Rent Analysis: What are similar units renting for? Can you cash flow after accounting for mortgage, insurance, taxes, and any repairs?

    Seller’s Motivation: Are they behind on payments? Facing foreclosure? Understanding the urgency can open up more negotiating leverage.

    Condition Assessment: Is that $60k-$70k rehab accurate, or could there be more hidden costs?

    Partnering vs. Wholesaling:

    You could wholesale it to a creative finance investor who specializes in SubTo deals, but if you’re looking to gain experience and keep some cash flow, consider structuring it as a joint venture with the experienced flipper.

    They could handle the rehab while you handle acquisition and SubTo structuring, splitting equity or cash flow based on contributions.

    Would you like any more details on structuring a SubTo agreement or partnering on a deal like this?

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free