Subject to

By: Donald Morant

Purchasing real estate can be handled in many different methods. With the market slow down it requires us as real estate entrepreneurs to be more creative and to re-calibrate how we make offers. One of the best methods to acquire properties in this market is 'Subject To' also referred to as 'Getting the Deed'. This approach will allow you to acquire properties with little or no money down. But the major difference in today's market 'subject to' deals must have equity that meet you're buying criteria. This method will allow you to purchase thousands of dollars of equity with little or not money down.

What is 'subject to'? 'Subject to' is getting the deed to a property without getting a new mortgage. Instead, the seller signs over the deed to the home 'subject to' the existing mortgage. The existing mortgage stays in the sellers' name. The buyer/ investor makes the mortgage payments on the exiting loan and does not get a new loan. This is an excellent method to acquire as many homes as you like. The only limitations are with your ability to structure deals that will work for you and the seller.

What are some of the advantages of 'subject to'?
Ã?â‚??The title is in your name or your company name. You have full ownership.
Ã?â‚??The mortgage note in not in your name (you have the ethical responsibility to pay the note)
Ã?â‚??Some very motivated sellers will pay you to take the deed.
Ã?â‚??It is much easier to prove 'seasoning of title' when you sell or want to refinance
Ã?â‚??When you are on the title you will have long term gain vs. short term if you hold the home for longer than 12 months.

There are many things to consider when making an offer on a property 'subject to'. What is the current market condition for real estate in your area? Are homes going up in value or down or is the market flat? Does this home have equity or not? All these factors make a major difference in how you will structure your deal. Also make sure you get a good attorney on your team to close these deals. In today's market you don't want to do table top closing.

But remember that you are seeking to get homes without having to go to the bank and that there is a large supply of sellers in most markets who are ready to sell. And lenders have tightened lending requirements that limit the number of buyers. Do your homework to cash-in on what is happening in your market today. Start making offers today on homes that meet your criteria. Be persistent and target market directly to those sellers that need your help to get out of their homes quickly without paying commissions. Go for the deed!

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