Real estate deals which are subject to the existing mortgage are creative ways to invest in real estate which can come with unique risks and benefits. Knowing what those are, can give you a better picture of the process and whether it is right for your investment strategy.
Risks
One of the first things you learn about how to invest in real estate is that accurately evaluating the risks of each deal is the key to success. This is true about “subject to” deals as well. Some of the risks include the lender calling the note due when they find out about the deal. If the lender is not willing to work with you, then you will have to refinance or have the property repossessed. This can subject you to fines from the seller as well as from the lender and any tenants you have in the property. When you …