Subject To

When a property is purchased and the loans on the property remain in place, the house is said to be purchased Subject To the existing financing. Many investors abbreviate this by calling the process buying houses Subject To.

With almost all of the more recent loans having a Due On Sale Clause, buying houses Subject To as a real estate investing strategy has some additional challenges and risks associated with it.

Subject To and Land Trusts

Many investors, when they purchase properties Subject To will use a Land Trust. Using a Trust will use the name of the Trust on public record (instead of your personal or business name).

Subject To As A Form Of Owner Financing

Buying houses Subject To can look a lot like buying a property with Owner Financing, or in cases where there seller will be receiving additional payments beyond what is owed, will actually include Owner Financing.

This can make this strategy very attractive for buying when getting a new bank loan is impossible (like when you are buying with a Corporation or LLC that is not able to get a loan) or not desirable.

Lease Option Versus Subject To

Functionally Lease Option and Subject To are similar, but mechanically they are some very important differences like who the owner of the property is.

Closing Subject To Deals

Some Title Companies will not close Subject To deals. Some will. I attended a continuing education seminar for Real Estate Agents sponsored by a major national Title Company and given by a prominent Real Estate Attorney that that was teaching Real Estate Agents how to broker Subject To deals and the Title Company was welcoming the opportunity to close the deals. So, if the Title Company you are considering using is telling you they can’t and you know you want to do Subject To deals, you need to interview more title companies.

Paperwork For Buying Subject To

How do you get the paperwork for buying properties Subject To. I personally recommend you have an Attorney draft up your agreement for buying properties creatively Subject To the existing financing. There are books and courses that will tell you you can use just about any contract and you probably can until something goes wrong. Then you’ll wish you just had an attorney do it. So, why not just have an attorney do it for you to begin with?

Other Investment Strategies

Buying properties Subject To is just another investment strategy. Consider also:


This is usually referenced from:

See also…