Secret Insider Technique #2 For Buying Real Estate: “Subject-To” Deals

By Gregg Cohen

It’s time to reveal my Secret Insider Technique #2 for Buying Real Estate (how’s that for a marketing spin ) Just in case you missed my last blog post, I am devoting the next couple of articles on my favorite techniques for buying real estate that don’t require you to use any cash, credit or need a bank for any reason. Now, let’s roll right into Secret Technique numero dos:

If you'd like to read my special report that has all 3 of the Secret Techniques, just click here!

Secret Insider Technique #2:

Take over properties “Subject-To” and build your real estate portfolio!

Now, as you can tell from my previous Secret Insider Technique, I love Seller Financing. The only thing about Seller Financing offers is the property needs to be owned free & clear in order for them to work like I described earlier. So what happens when the seller already has a loan on the property?

Don’t worry, my good friends. This is where Secret Insider Technique #2 comes into play! This technique is called taking over properties “Subject-To” (short for “taking over properties subject-to the existing mortgage”, for you brainiacs out there!)

Subject-To investing allows you to buy a property from a seller by merely taking over their payments on their existing loan. You might have heard of an assumption of mortgage before, and Subject-To investing is similar, however there are some major differences (I want to make it clear that Subject-To investing and assuming a mortgage are NOT the same thing!)

When you take over a property Subject-To, you agree to continue to make the monthly mortgage payments for the previous owner. The loan will remain in the previous owner’s name and the bank will not be notified of the change in ownership. This means the loan will actually continue to show up on the previous owner’s credit report and you will just be making the monthly payment for the seller.

Now, why is this so powerful?

1. You don’t need any credit to do this transaction!
2. You don’t have to put any cash down!
3. You have no limit to the number of properties you can acquire this way!

Let’s put some numbers behind this to see how a deal like this would work out:

Market Value of Property: $130,000

Seller’s Asking Price: $100,000

Current Loan on Property: $100,000

Current Monthly Payment: $700

Projected Monthly Rent: $950

You agree to purchase the property from the seller by taking over the property Subject-To. Your plan is to rent the property for $950 per month.

So, you assuming you know how to handle the paperwork (we can give you a hand with that!), you have now set up the following deal for yourself:

Purchase Price: $100,000

Down Payment: Zero!

Equity: $30,000

Monthly Cash Flow: $250

Now, I don’t know about you, but that looks like a winner to me! And the best thing about this deal is you didn’t have to use any of your own cash or credit. You can literally get a deal like this done is a week! That’s some powerful stuff. So make sure you add the Subject-To technique to your real estate tool belt to start growing your real estate portfolio immediately!

And stay tuned for the next blog post where I will be revealing the 3rd and final Secret Insider Technique…