How do you make money from a subject 2 deal?

[Drayden Morgan]

Can someone help me understand how do you make money from a subject to deal if the mortgage is already the same amount as the areas rental rates?

[Robert Gilstrap]

@Drayden Morgan several ways actually; principal paydown, equity appreciation, future rent appreciation, tax savings, you control the property in an upswing market, etc. but from a big picture the advantage of a subject to is that you have near zero risk to control a large appreciating asset. Think about your IRA retirement account. Every month you put in say $300 out of your paycheck towards your retirement and it's invested in something (usually the stock market). You hope at the end of 30 years you have a nice retirement nest egg but the reality is you have no guarantee that the money you have invested will even be there or it could actually lose value or not appreciate at all. Unlikely but still possible right?

Buying property that doesn't cashflow well is really no different from a big picture right? If you had to put $300/month into a rental property every month because you just broke even would you be in great shape after 30 years? Of course! In fact you would arguably be in a hell of a lot better shape spending that $300/mo on a sub to property than on stocks when you factor what rents will be like in 30 years, the savings you achieved during that time frame, the fact that the property is now paid off completely, etc. To me it's a no brainer and I have dozens of subject to properties.