Sub to means “subject to the existing financing”.
On the HUD 1, during closing, there’s a line that says “what loans are being taken subject to the existing financing”. In commercial. property loans are taking subject to the existing financing all the time.
What’s important in sub 2 investing is that you are ethical and responsible about paying your part every month. That’s why part of our training we teach you your payment goes directly to the loan servicer of the underlying financing. That way, the loan gets paid down and there won’t be any problems with the existing financing. We always give a sub to offer to the seller if there is an existing loan.
What better way to buy property!
If there is equity, we will couple the subject to offer with a “promissory note” with no payments for 5 years. Anytime we can get a nothing down transaction AND we can help the seller make more money.
Subject to is used with Land Trust due to the due on sale clause. This allows us to protect ourselves from having the loan called. See Land Trust Course.
So, every real estate investor needs good subject to the existing financing training. Get yours today!