If you’re on a quest to dive into real estate investing without a hefty upfront cost, understanding how to find subject-to properties is your golden ticket.

It’s a savvy approach that lets you secure properties under their existing mortgage terms. In a world where interest rates are climbing to new heights, these existing terms often outshine what you’d secure with a fresh mortgage.

Now, you might be wondering, “Where can I unearth these subject-to opportunities?” Fear not; I’m about to unveil the secrets.  Read below to find out how to uncover the hidden gems of subject-to deals.


  • Subject-to real estate enables buyers to acquire properties without new mortgages, taking over existing payments.
  • Finding subject-to properties involves connecting with investor-friendly agents, attending events, using social media, exploring FSBO listings, reaching distressed homeowners, collaborating with wholesalers, and considering auctions.
  • Risks include mortgage responsibility, seller’s liability, due-on-sale clause, property condition, legal guidance, and impact on future loan qualification.

What is Subject To Real Estate?

Subject to real estate is a way to buy a house without a new mortgage. Instead, you take over the seller’s existing mortgage and agree to make the payments.

How Does a Subject To Deal Work?

Buying a house through a subject-to deal works like this:

  • Finding a Seller: You find a homeowner who wants to sell their house but still has a mortgage to pay off.
  • Agreement: You and the seller agree to take over their mortgage payments. You won’t get a new loan; instead, you’ll manage the existing loan.
  • Paperwork: Sign a contract committing to make payments on the seller’s mortgage. This agreement doesn’t change the original terms of the loan. You’re just taking responsibility for making the payments.
  • Ownership: Even though you’re making payments, the house’s ownership doesn’t transfer to you. It stays in the seller’s name until you repay the loan or transfer the title.
  • Responsibility: You pay the mortgage and any repairs on the house. But remember, the mortgage is still in the seller’s name until you settle it or make other legal changes.

Fully understand the existing mortgage’s terms, including potential closing costs and verify that you can manage the payments before entering into a subject-to deal.

Finding Subject-To Properties

You can take several steps to increase your chances of locating potential deals when finding subject-to properties, including:

Contact investor-friendly real estate agents:

Local real estate agents specialize in assisting buyers and sellers, including investors.

Contact agents with experience with investment properties or who work with distressed homeowners. They may have access to exclusive listings or be aware of subject-to opportunities in the market.

You can tap into their network and increase your chances of finding suitable properties by leveraging their expertise.

Wondering where to find investor-friendly agents?  Check out the agent listing on BiggerPockets.


Attend real estate networking events:

Real estate meetups, seminars, and networking events are excellent places to connect with other investors, professionals, and potential sellers.

Engaging in these communities lets you stay informed about market trends and gain valuable insights from experienced individuals.

Networking events provide opportunities to discuss subject-to deals, share knowledge, and discover off-market properties.

My recommendation is to check out your local real estate investing group and meetup for real estate events happening in your area.


Utilize social media platforms:

Join real estate investor groups on platforms like Facebook or LinkedIn.

These online communities offer opportunities to engage with fellow investors, share interests, and seek advice or recommendations.

By actively participating in these groups, you may come across potential subject-to properties that other investors want to sell or transfer.

Explore “For Sale By Owner” (FSBO) properties:

Some homeowners choose to sell their properties without involving a real estate agent. These FSBO properties can be attractive options for subject-to deals as there might be more negotiation flexibility.

Look for FSBO listings on online classified platforms, local newspapers, or even by driving around neighborhoods.


Connect with distressed homeowners:

Distressed homeowners, such as those facing foreclosure or late mortgage payments, can be a potential source of subject-to deals.

Find potential properties using software to build target lists such as:

  • Propstream
  • PropertyRadar
  • ListSource

Develop strategies to connect with these homeowners through targeted direct mail campaigns, door-knocking in specific neighborhoods, or using services that provide leads on distressed properties.

Collaborate with wholesalers:

Wholesalers specialize in finding off-market deals, including subject-to properties.

Establish connections with wholesalers in your area who can provide you with access to their inventory of potential subject-to opportunities.

If you aren’t sure where to start, go to real estate networking events, ask other investors, and start to build relationships with wholesalers.  

Consider real estate auctions:

Real estate auctions, such as foreclosure or tax lien sales, can be another avenue for finding subject-to properties.

Attend local auctions to explore distressed properties that qualify for a subject-to deal.

Thoroughly research and understand the auction process to make sure that you’re making informed decisions.

Be sure to consult with professionals such as real estate attorneys and financial advisors to make sure that you understand the legal and financial implications of taking over a property subject to the existing mortgage.

Types of Subject To Real Estate Deals

Buyers and sellers can consider different types of subject-to real estate deals.

Here are a few common ones:

  1. Traditional Subject-To Deal:
    In this type of deal, the buyer takes over the seller’s existing loan balance from the seller and continues making the payments as agreed upon.
  2. Wraparound Subject-To Deal:
    With a wraparound subject-to deal, the buyer creates a new mortgage that “wraps around” the existing mortgage. They make one payment to the seller, who then uses it to cover the original mortgage payment.
  3. Equity Share Subject-To Deal:
    The buyer and seller agree to split the equity in the property in an equity share subject-to deal. The buyer pays the seller their share of the equity over time.
  4. Lease Option Subject-To Deal:
    In a lease option subject-to deal, the buyer leases the property from the seller with a chance to purchase it in the future. The buyer may also assume the existing mortgage during the lease period.

Each type of subject-to deal has its unique features and considerations. Understand the terms and work with professionals, such as real estate agents or attorneys, for a successful transaction.


Benefits of Subject-To Properties

Subject-to properties offer several advantages for both buyers and sellers.

Here are some benefits to consider:

  • Low upfront costs: Buyers can acquire a subject-to property through the seller’s mortgage company without needing a large down payment or qualifying for a new loan. It makes it more accessible for buyers with limite
  • d funds who don’t meet traditional lending criteria.
  • Faster transactions: Since subject-to deals don’t involve lengthy loan approval processes, you can complete the transaction more quickly. It benefits both buyers and sellers who want to close the deal efficiently.
  • Flexible financing options: Buyers can assume the existing mortgage balance, which may carry more favorable terms than obtaining a new loan. It can result in lower interest rates, saving the buyer money.
  • Preserve credit: A subject-to deal can help them avoid further damage to their credit for sellers facing financial difficulties or the possibility of foreclosure. They can alleviate their financial burden and protect their credit score by transferring the mortgage to the buyer.
  • Potential profit: Buyers who acquire subject-to properties can benefit from potential appreciation in the property value. The buyer may have the opportunity to sell the property at a higher price and make a profit if the property value increases over time.
  • Avoiding foreclosure: Subject-to deals provide an alternative to foreclosure for sellers struggling to make mortgage payments. They can avoid the negative consequences of foreclosure on their credit and personal finances by transferring the mortgage to a buyer.

Subject-to deals requires careful consideration and legal guidance to confirm compliance with all regulations and a smooth transaction for all parties involved.


Risks and Considerations

While subject-to properties offer benefits, there are also risks and considerations that buyers and sellers should be aware of.

Here are some important factors to keep in mind:

  • Mortgage Responsibility: Buyers who take over the existing mortgage in an owner financing or subject-to deal become responsible for making the monthly payments. It could lead to foreclosure and negative consequences for their credit if they fail to make payments.
  • Seller’s Liability: Sellers should understand that even though the buyer assumes the mortgage, they may still be legally responsible for the loan until it’s paid or refinanced. Sellers should consult with legal professionals to make sure they are protected.
  • Due-on-Sale Clause: Mortgage loans often include a due-on-sale clause. Lenders can demand immediate loan payment if the transfer of property ownership occurs. Not all cases may enforce this clause, but buyers and sellers should know the potential risk.
  • Property Condition: Buyers should thoroughly inspect the property before entering into a subject-to deal. They should be aware of any repairs or maintenance needed and consider the property’s overall condition.
  • Legal and Financial Guidance: Subject-to deals involves complex legal and financial aspects. Both buyers and sellers must seek professional guidance from real estate attorneys or experienced professionals to navigate the transaction successfully.
  • Future Loan Qualification: Buyers should know that assuming an existing mortgage may impact their ability to qualify for future loans. When assessing their financial situation, lenders may consider the assumed mortgage as a liability.

Subject-to deals require careful consideration, research, and expert advice to protect the interests of both parties involved.

Understand the risks and consult with professionals throughout the process.


Tips for Subject To Real Estate Investing

Investing in subject-to real estate can be exciting and rewarding. Here are some simple tips to guide you along the way:

  1. Research First: Conduct thorough research before venturing into subject-to real estate investing. Take the time to understand the property, its history, and the neighborhood.

Look into property values, crime rates, school districts, and amenities. This research will provide valuable insights and help you make informed decisions.

  1. Check the Mortgage Terms: Review the existing mortgage terms when investing in subject-to properties. Understand details such as the interest rate, remaining balance, monthly payment amount, loan maturity date, and potential prepayment penalties.

Knowing these details will help you assess whether the deal aligns with your investment goals.

  1. Build a Good Relationship with the Seller: Establishing open and honest communication with the seller is key to a successful subject-to transaction. Take the time to listen to their situation, understand their motivations, and build trust.

A good relationship with the seller can lead to smoother negotiations and increase the likelihood of a mutually beneficial agreement.

  1. Have a Backup Plan: Real estate investing always carries some risk. It’s important to have contingency plans in place to mitigate unforeseen challenges.

Consider scenarios such as changes in market conditions, unexpected repairs, or a sudden need to sell the property. You can adapt to unexpected circumstances and protect your investment with backup plans.

  1. Stay Organized: Effective organization is important when dealing with subject-to properties. Keep all documents, agreements, and communication related to the transaction well-organized.

It includes copies of the original mortgage or trust deed, title documents, contracts, and any correspondence with the seller. Staying organized will give you a smooth process and make it easier to refer back to important information when needed.

  1. Work with Professionals: Consider enlisting the support of real estate professionals who have experience with subject-to transactions.

A knowledgeable real estate attorney can provide legal guidance, review contracts, and assure compliance with local regulations. Partnering with a real estate agent specializing in investment properties can help you navigate the market and identify suitable subject-to opportunities.

  1. Be Mindful of Market Conditions: Always check the real estate market and understand its current trends. Monitor supply and demand, interest rates, and economic indicators.

This information will help you decide when to invest, hold, or sell subject-to properties. Staying informed about market conditions will help you maximize your return on investment.

  1. Stay Informed about Laws: Real estate laws and regulations can vary by location. Stay up to date with the legal aspects of subject-to transactions in your area.

Consult with a real estate attorney or conduct thorough research to confirm compliance with local laws, including disclosure requirements, transfer taxes, and specific subject-to transaction regulations.

  1. Build a Network: Networking in real estate can provide valuable insights and opportunities. Attend industry events, join local real estate investor groups, and connect with other professionals in the field.

Building a network will allow you to learn from experienced investors, access potential deals, and receive support throughout your subject-to investing journey.

  1. Learn Continuously: Real estate is a dynamic industry that constantly evolves. Commit to continuous learning by staying abreast of industry trends, investment strategies, and regulation changes.

Read books, attend seminars, listen to podcasts, and follow reputable real estate blogs to expand your knowledge. Continuous learning will let you make the right decisions and adapt to the ever-changing real estate landscape.

What’s The Difference Between Subject To And Loan Assumption?

A “subject to” and a loan assumption are two different ways of taking over someone else’s mortgage.

With a subject-to transaction, the buyer takes over the existing mortgage payments of the seller without formally assuming the loan.

They continue making purchase price payments on the seller’s behalf, but the original seller remains responsible for the loan. With a loan assumption, the buyer formally assumes the mortgage and becomes personally liable.

This involves taking over both the responsibility for making payments and the legal obligations associated with the loan.

While subject-to involves taking over payments without assuming the loan, loan assumption involves taking over both payments and legal responsibility for the loan.


Mastering how to find subject-to properties is a valuable investment of your time and effort. While it may present challenges initially, each deal you navigate will sharpen your ability to understand the seller’s needs and offer effective solutions as a real estate investor.

In fact, I’ve witnessed a fellow investor build an impressive portfolio of homes using this very approach, even in today’s competitive market. This success story proves that with dedication and consistent effort, achieving results is not only possible but also rewarding.

So, don’t hesitate to try this strategy – your path to subject-to property success begins with taking that first step.

Find Subject-to Properties FAQs

Is a subject-to deal suitable for first-time homebuyers?

Yes, it can be a good option, especially if you have a limited down payment. Just be sure to understand the process and responsibilities.

Do I need a lot of money to invest in subject-to properties?

No, one advantage of subject-to investing is that it typically requires less upfront capital than traditional real estate purchases. It’s a great strategy when you have no/limited money to invest in real estate.

Are subject-to properties a good investment?

Subject-to properties can be a profitable investment strategy, but you should conduct thorough research and due diligence before making any decisions.

Understanding the market, property values, and rental demand is necessary. Exploring seller financing as part of the deal structure can also provide additional financial benefits for buyers and sellers.