For the investor, subject-to investing is really one of the great inventions of the real estate market. In this type of investment, the seller usually wants to or needs to get out of the property quickly. The homeowner may be in financial distress and may need cash quickly, or may need to move fast. In either case, the homeowner simply cannot wait the 98 days that a property takes, on average, to sell. This means that the seller is willing to be more flexible and it also means that the investor buying the property has a golden opportunity for bigger profits.

In subject-to purchases, the investor gets ownership of the property and the homeowner leaves his or her current financing in place for the investor or buyer's use.

The investor usually gives the seller some sort of money in exchange for the equity the homeowner had in the property. However, this type of investment is highly flexible, so that in some cases it is possible for an investor to take control of a property with no money or very little money down.

Once the investor has taken over the property, there are many profitable options available. One good option is to offer the property for resale with financing already in place. This means that you offer your buyers both financing and the home, which can mean more interested buyers ? not to mention more profits.

Investors who have bought a property subject-to can offer no qualifying loans along with the property to buyers. This can be attractive to buyers who have not established great credit, but it does not necessarily mean that investors have to take great risks. In many cases, investors can offer no qualifying loans to buyers who have a good credit history but who cannot get a great rate because of a recent job change or move, that has affected their credit. In these cases, an investor can get a $6000 or even $12 000 down payment on a property and can charge a higher interest rate as well to cover the risks associated with financing. For example, an investor can advertise owner financing and can raise a 7% rate to a 9% rate and enjoy greater profits while still giving buyers a good deal. Many buyers are attracted by owner financing because it means less hassle with banks and less time spent with loan officers. Buyers are often willing to pay a little extra for the convenience and this can be a great benefit for investors.

Investors who succeed at subject-to investing also often take pains to improve the value of a home, so that they can get more equity and a better asking price from it. Plus, if the buyer needs to refinance in a year or two, the investor can get more cash from the refinancing.

The bottom line is that subject-to investing can mean great profits with little risk. Some investors in the know risk as little as $1000 on this type of investment, and profits in the tens of thousands of dollars are quite common with these deals. Of course, these profits are not automatic. Investors need to learn the ins and out of subject-to selling and real estate investing before they risk any of their money.