Subject to ?

[Mark Forest]

I know the legal definition of taking a property “subject to” is that I would take over the payments of the mortgagor. I would not be liable if I could no longer make those payments.

How do the mechanics of this work? What considerations do I make as to the amount of payments made and to be made? Do I simply just start paying the bills as they come in using my checking account and the old owner is out of the picture? Please elaborate. Thanks to all for your help.

[Jim Sharp]

You can also "wrap" the sub2 loans to make the payment do able. Ie. If the seller has a $1,300 payment and the property would only rent for $1200. You could do a wrap around mortgage with it stating that you are only due to pay $1,100. You'll want to make sure the seller has a viable job to continue taking the negative cash flow.

If the seller is behind on payments and you catch them up, you'll be helping them out. You should make sure you can make the payments.