If you’re looking 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 strategy that lets you control properties under a seller’s existing mortgage terms. In today’s world where interest rates are climbing, the seller’s existing terms often outshine what you’d get with a new mortgage.

    One of my fellow investors has used the subject-to strategy to add over 60 homes to his portfolio. He’s doing these types of deals in today’s market in 2024, and he also works with real estate agents. This strategy works. 🚀

    You came on this post because you want to know how to find subject-to properties, so let’s get into it.

    TL; DR.

    • Subject-to real estate means that you buy single-family properties without new mortgages. You take over existing payments.

    • You can find subject-to properties by connecting with investor-friendly agents, attending events, using social media, exploring FSBO listings, reaching distressed homeowners, collaborating with wholesalers, and considering auctions.

    • There are some risks like mortgage responsibility, seller’s liability, due-on-sale clause, property condition, legal guidance, and impact on future loan qualification.

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    What is Subject-To Real Estate?

    Subject-to real estate is a way to buy a house without a new mortgage loan. Instead, you take over the seller’s existing mortgage and agree to make the payments. Note that this is not the same as a mortgage assumption.

    My friend who is doing these deals in today’s market finds motivated sellers who want to preserve their credit score and need to sell the house fast. He pays the equity difference between the current mortgage and what the seller could sell for. From there, he assumes the existing mortgage and then rents out the house.

    He gave me a recent example of a seller who is being transferred for his job and needed to sell fast. My friend paid $100k in cash to cover the seller’s equity and then took over a mortgage at a 3% interest rate. From there, he’s renting the house and pocketing $2000 per month. The return on this is huge. He invested $100k and clears $24k a year which is a 24% return. 😲

    As you can see, these deals are worth finding!

    How Does a Subject-To Deal Work?

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

    1. Find a Seller: You find a homeowner who wants to sell their home but still has a mortgage to pay off.

    2. Create an Agreement: You agree with the seller to take over their mortgage payments. You won’t get a new loan; instead, you’ll manage the existing loan.

    3. Sign the Paperwork: The buyer and seller 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.

    4. Understand 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.

    5. Take 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.

    Be sure you fully understand the terms of the existing mortgage, including potential closing costs, and verify that you can manage the payments before entering into a subject-to deal.

    The Top 7 Ways of Finding Subject-To Properties

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

    Investor Friendly Real Estate Agents

    Local real estate agents specialize in assisting buyers and sellers, including investors. My friend works with agents that understand this structure and the agent still gets paid their normal commission. So, it’s a win/win for everyone.

    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.

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



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

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

    Check out your local real estate investing group and meet up for real estate events happening in your area.

    Real estate meetups

    Social Media

    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. As an example, my friend found a subject-to deal but it was in another state. He found an investor to handle the deal and my friend got paid a finder’s fee.

    For Sale By Owner (FSBO)

    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 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:

    • ReiPro
    • Propstream
    • PropertyRadar

    • ListSource


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

    If the seller offers owner financing, you could use that as a way to purchase the property. Check out some other creative financing options here to learn more ways to finance purchasing your property,


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

    Get connected 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 begin to build relationships with wholesalers.  

    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.

    Just be sure you research and understand the auction process before you buy property this way.

    Be sure to consult with real estate attorneys and financial advisors. This way, you understand the legal and economic 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:

    • 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.

    • 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.

    • 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.

    • 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.

    Types of subject to deals - traditional, wrap around, equity share, lease option

    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 limited 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 sale 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 prevent the negative consequences of foreclosure on their credit and personal finances by transferring the mortgage to a buyer.

    Benefits for sellers to do subject to - preserve credit, avoid foreclosure, flexible financing, faster transactions,

    You should get legal guidance and other expert guidance on Subject-to deals just to make sure you understand all the nuances and details. As an example, my friend had a few houses hit by a storm that received insurance payouts for repairs. He had challenges cashing the checks because of how he set up the insurance for these subject-to properties. He worked it out but it’s an area to be aware of if you go down this path.

    Risks and Considerations

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

    • 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 involve 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. Lenders may consider the assumed mortgage as a liability when assessing their financial situation.

    risks of subject to: mortgage, seller liability, legal guidance, due on sale clause, property condition, future loan.

    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. 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.

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

    3. Have a Backup Plan: Real estate investing always carries some risk. It’s essential 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.

    4. Stay Organized: Effective organization is critical 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.

    5. Work with Professionals: Consider enlisting the support of real estate professionals who have experience with subject-to transactions. A knowledgeable real estate attorney or real estate agent can provide legal guidance, review contracts, and confirm compliance with local regulations.

    6. 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.

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

    8. 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.

    9. Learn Continuously: Real estate is a dynamic industry that constantly evolves. Commit to continuous learning by staying aware 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.

    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. Basically, the bank doesn’t know about the transaction.

    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. The bank is involved in the transaction.

    Source: Reisift


    Knowing how to find subject-to-properties is worth the time and effort. While it may take you a bit to get started, each deal you handle will sharpen your ability to understand the seller’s needs and offer practical solutions.

    When you consider today’s market, the price of homes and the current interest rates, subject-to deals are a fantastic opportunity. The return on your investment is high and you can build a portfolio of cash-flowing properties for less money than getting a new mortgage.

    So, don’t hesitate to try this strategy if you find an opportunity for a subject-to property.

    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 do due diligence before making any decisions.

    Understand the market, property values, and rental demand. You don’t want to buy a property and find out you can’t rent it for cash flow.