Subject To or to not Subject To?

[Jordan Alexander]

Hi everyone,

I follow Pace Morby and a couple of other creative finance masters on social media. When it comes to creative finance, I personally lean more towards seller finance as I like getting to work with owners and building relationships with them. I'm not opposed to subject to, but my fear is whoever I am taking over the existing mortgage from will not continue making the payments. How do you mitigate this risk? Is it just as simple as entering your account information in their mortgage payment portal and making sure the payment comes from your account? Thoughts?

Thank you!

[Shiela R.]

Interesting that this isn't covered with the "masters". SMH.  I've always gotten a signed "authorization to release loan info" from the owner on record.  Then you can talk to the mortgage company or payment processor yourself. You are taking over the payments. 

It really depends on your market and the owner's needs if sub to is even possible.

[Nicole Heasley Beitenman]

I'd never enter into a sub-to agreement unless I was the one making the payments. What's common practice? I'd talk to some investors experienced in sub-to, and possibly an attorney. 

[Jordan Alexander]

Quote from @Shiela R.:

Interesting that this isn't covered with the "masters". SMH.  I've always gotten a signed "authorization to release loan info" from the owner on record.  Then you can talk to the mortgage company or payment processor yourself. You are taking over the payments. 

It really depends on your market and the owner's needs if sub to is even possible.

 Thank you Shiela! I appreciate it!

[Jamie Banks]

@Jordan Alexander I'm taking a creative financing course now and I'm learning that a lot of investors pay the mortgage that they acquired after the sub2 deal closed from a servicing account.

[Jordan Alexander]

Quote from @Jamie Banks:

@Jordan Alexander I'm taking a creative financing course now and I'm learning that a lot of investors pay the mortgage that they acquired after the sub2 deal closed from a servicing account.

 Hi Jamie! Thank you for letting me know. That makes sense!

[Eliott Elias]

Use a third-party servicing company.

[Raj Konda]

Hi Jordan, Did you go thru with Subject To?  Curious as I m evaluating an opportunity but it is a new area for me, so checking

Thanks

raj

[Paul Cijunelis]

You make the payments. I have subto deals and pay the mortgage. If you are worried about this there are companies that handle servicing these payments automatically on a scheduling system if you have a bunch of them.