What is a subject to real estate purchase?

Good question.

A subject to real estate purchase is where you agree to make payments on the seller’s mortgage and it is not paid off when the house is sold. So the seller receives something from you like a down payment or catching up past due payments on their loan and you get ownership of their property.

For example, say you find a seller that has a 1,000,000 house and you want to purchase it but you don’t want to put down a lot of money and you also don’t want to get a bank loan.

Say the seller is behind on payments perhaps one or two months or more in some cases. You would offer to catch up the payments to the seller and possibly pay him a down payment.

But the seller transfers the ownership of the house. Technically this will violate a due on sale clause that the seller has with his bank but the bank is now getting monthly payments from you so it is not likely to stop you from making the payments.

Maybe you get ownership of a million dollar house for just 10,000 or 20,000 down with a deal like this. You still have to make payments on the mortgage debt though. You need proper training to do deals like this but this is the basic idea of how a subject to purchase works.

There is a lot more to these types of purchases but they can be useful as a technique. If you would like to learn more, contact www.benjaminzmiller.com to learn how to do these and other investment techniques.

I hope that helps and good luck with your investing!

Benjamin Z Miller
www.benjaminzmiller.com