Blog Colorado Real Estate Investing mentor Michael Jake – here’s a video on how to buy houses subject to the existing financing – an advanced real estate investing technique requiring no cash, no credit, a typical no money down deal. for more real estate investing training go to


How to Buy Houses “Subject To” – Real Estate Investing Training Video #buy #RealEstate in #Canada

Therefore keep the words of this covenant, and do them, that you may prosper in all that you do. – Deuteronomy 29:9


  • It is possible. You need to know and abide by your state's laws. For instance in CO, you have to use a state approved disclosure contract and give them 3 days to cancel in writing.
    You would catch up back payments, make the loan current and then have time to rent, sell, lease option or even retail to end user.
    I would NOT suggest you ever do a lease back.
    I prefer doing sub-2 deals on houses with current A paper loans.

  • You don't "go over" the due on sale clause, you simply ignore it & make the monthly payments.

    Mortgages say that the mortgage holder HAS the right to declare it due in full if the title is transferred (such as in a "subject to" transaction) but there is no legal or contractual requirement for the seller to TELL the mortgage company a transfer has taken place.

    As long as payments are made and stay caught up until the property is paid off – by resale or payoff – then there should be no problem.

  • My assumption is that the buyer (new deed holder) will not be able to claim mortgage interest on his tax return, but the seller still will, since the mortgage is still in his name, even though the title / deed is not.

    My reading is that the interest deduction may be taken by whoever is responsible for the loan (promissory note), and the seller still is.

    Is that correct?

  • @MicrowaveDisplaycom – you can claim the deduction for payments you have made. The lender reports it under the SSN of those who qualified for the loan, but it's their right, not obligation to take it. If you make the interest payments then you can claim the interest deduction. Talk to your CPA about it.

  • Why don't you live in MI … T_T

  • How do you pay without alerting the lender that someone else is making the payment?

  • @HJosephD – we automate all our payments via online banking…but I don't think that's what you really want to know. The lender has some 8/hr employee opening up payments and posting them to accounts. There's no checks and balances for "did the name on the check match the name on the loan". Lenders will typically get a "red flag" if changing of the insurance is not done properly.

  • do you need to record your name on the "DEED" for this this transaction, then refinance to get the seller name off the loan?

  • I don't refinance houses I buy "subject to"

  • If you have an example on how to fill out a subj to contract completely PLEASE let me know!

  • BTW, I definitely subscribed, Your Awesome!

  • Wouldn't a Subject To transaction trigger the due at sale clause?

  • it could. There are very specific steps you have to do to avoid that, including how you take title, how you get insurance (adding anyone on loan as additional insured), but doing it correctly (I've done hundreds of these) I've never had one called due. I do disclose to sellers and I tell them what my backup plan is if it were to happen (I have 2, neither of which is pay off they loan).

  • Ok so, what in detail are the specific steps and what are your backup plans?

  • Hi Michael, thanks for a great video, a homeowner agreed to turn over her house to me (2 months behind on payments) and recorded the deed to my name without going to title company. Everything was rushed because she could no longer afford the home. Can I still talk to the lawyer or title company about this so I can sell the home someday? Also, can i get my own insurance? adding my name on her title insurance may trigger "due sale clause"

  • I get a title policy in the name of the trust I purchase the property under. Title policy won't trigger due on sale. new insurance policy needs to have the seller (anyone on loan) listed as additional insured (should be a TRUST buyer). If you have an authorization to release signed at closing you can use that for a payoff request when you go to resell. just give account number, last 4 of SSN and DOB from authorization to release to title company and they can request a payoff on resale.

  • i still cant really distinguish the difference between the "Subject to" and "Rent to own" or "Owner finance". I guess its the fact that there is a loan and you are soley in controll over the loan?

  • What about the taxes at the Sub-2 closing table? Are they paid off when you take title? If so, by whom?

  • Are the back payments paid for out of your pocket first, before you start paying the existing finances?

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