Whether you are a seasoned investor or just a beginner, likely you have heard of the acquisition strategy of “Subject To.” I am here to tell you that this needs to be a key tool in your investment tool belt! My favorite variation of this technique is purchasing “Subject To”. Wow, if you want to clear a room, just start throwing those two word combos around! Non-investors and some investors alike are puzzled by this terminology. OK, so what is a “Subject To,” you ask? Well let me tell you: It is one of the most profitable forms of acquiring investment property with little or no money out of your pocket. Do I have your attention? Yes, I said potentially NO MONEY DOWN! Do you know anyone that would turn down a profitable deal with little or no money out of pocket? But for the wise investor, this method allows you to become the owner of record and leave the mortgage in the seller’s name! Here is the concept: First you find a motivated seller (or better yet, they find you!). Most of the time, these sellers are going to have little or even no equity in their properties. This may be true or simply their impression of value. One of the most important questions you can ask is “What is your payoff?” Follow this up by asking, “Would you sell it for that amount?” If you don’t ask, you won’t know. This will save you a lot of time (and money!). Once you have determined your seller is motivated enough to proceed, you explain that you can purchase their home by leaving the existing financing in place. You can obtain ownership, while the loan stays in the sellers’ name.
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