What is a Subject-to deal? #realestateinvestor

Name: What is a Subject-to deal? #realestateinvestor
Uploaded: 2024-03-09T21:39:19+00:00
Duration: 24 s
Channel: Tyson Smith
Description: In this concise YouTube monologue, Tyson Smith defines a "subject-to" transaction as a creative financing technique where a buyer purchases a property…

9 Mar 2024 · 0 min

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In this concise YouTube monologue, Tyson Smith defines a "subject-to" transaction as a creative financing technique where a buyer purchases a property while keeping the existing mortgage in the seller’s name. The mortgage is not paid off; instead, the buyer assumes responsibility for making the payments, even though the debt legally remains attached to the original owner. Smith notes that there are variations of subject-to deals, but the core principle is the unchanged ownership of the loan and the buyer’s payment obligation. He emphasizes that this is an advanced real estate strategy and advises that it is unsuitable for beginners.

Subject-to is a form of creative finance where you purchase a property using the underlying debt, meaning the mortgage that is currently on the property doesn't go anywhere. It doesn't get paid off. Instead, you become responsible for it. Now, there are certain nuances depending on the kind of subject-to deal, but the underlying principle here is that the debt stays in the owner's name, but you become responsible for making the payment. Very advanced real estate strategy, in my opinion. I don't think it's for beginners.