Christian OsgoodCEO, Multifamily Strategy · CEO at Multifamily Strategy

Seller Financing vs Subject To? Which is better? #multifamily

10 Apr 2023 · 1 min

Watch on YouTube

0:31

Seller financing lets a property owner with no debt transfer a free-and-clear title to a buyer who pays over time, secured by a promissory note and deed of trust. The deed of trust protects the seller by placing a lien on the property, preventing the buyer from selling without paying off the debt.

Chapters

What is subject-to and seller financing? Seller financing, or if you're out of the states, vendor financing, is where you go up to someone who has low to no debt and they transfer title with free and clear title, meaning there's no liens on the property. They are not in distress, their property is doing okay, and they're going to take payments over a certain period of time. The way you establish these payments is what's called a promissory note, a promise to pay. Problem with the promise is it's only as good as what backs it. So typically you have a promissory note and a deed of trust, which lets them, put a lien against title so that you can't sell it without paying them off.