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4 Minutes Read

How to Find Subject-To Real Estate Deals: 5 Effective Strategies


Subject-to real estate investing allows investors to acquire properties without having to qualify for a traditional mortgage. By taking over the existing financing while keeping the loan in the seller’s name, investors can leverage creative financing to grow their portfolios with minimal capital. But the challenge many investors face is how to find subject-to real estate deals effectively.

In this guide, we’ll break down five proven strategies, step by step, to help you find motivated sellers and close more subject-to deals.

1. Target Motivated Sellers

The key to finding subject-to deals is identifying sellers who are highly motivated to sell their properties quickly. These sellers are often in situations where traditional selling methods are not ideal.

Step 1: Identify Motivated Seller Types

Look for homeowners facing:

  • Foreclosure – Sellers who are behind on mortgage payments and need a fast solution.

  • Divorce – Divorcing couples may want to sell their property quickly to divide assets.

  • Job Relocation – Owners moving to a new city may not have time for a traditional sale.

  • Inherited Properties – Heirs who inherit properties may not want to deal with management or expenses.

  • Financial Hardship – Sellers struggling with debt, job loss, or medical bills.

Step 2: Use Public Records & Databases

To find these sellers, utilize:

  • Pre-foreclosure lists (accessible through county records or foreclosure listing services like PropStream or Zillow).

  • Divorce filings (available in court records).

  • Probate records (for inherited properties).

  • Eviction filings (landlords dealing with bad tenants may want to sell quickly).

Step 3: Reach Out to Sellers

Once you have a list of potential sellers, contact them using:

  • Direct mail – Send handwritten letters or postcards offering a solution.

  • Cold calling – Use scripts to explain how you can help them avoid foreclosure.

  • Door knocking – If comfortable, approach homeowners in pre-foreclosure in person.


2. Leverage Online Marketing and Lead Generation

Many motivated sellers search online for solutions when they’re struggling to sell their homes. Having an online presence can help attract these sellers to you instead of constantly hunting for them.

Step 1: Create a Seller-Focused Website

Set up a simple website explaining how subject-to financing can help sellers avoid foreclosure or financial distress. Optimize it with keywords like:

  • "Sell my house with mortgage still in place"

  • "How to sell my house fast without a realtor"

  • "Avoid foreclosure options"

Step 2: Run Paid Ads

Use Facebook and Google Ads to target homeowners in distress. Example ad targeting options:

  • Homeowners who have owned their homes for at least five years

  • People searching "how to stop foreclosure"

  • Geographic targeting in areas with high foreclosure rates

Step 3: Utilize Social Media & SEO

  • Create blog posts and YouTube videos explaining subject-to deals.

  • Post success stories and tips on Facebook, Instagram, and LinkedIn.

  • Join local real estate investing Facebook groups to network.


3. Build Relationships with Real Estate Professionals

Networking with the right professionals can provide consistent leads on subject-to deals.

Step 1: Connect with Local Realtors

Many agents come across sellers who can’t afford to list traditionally. Build relationships by:

  • Attending real estate networking events.

  • Offering finder’s fees for leads on distressed properties.

  • Explaining how subject-to deals work and how they can still earn commissions.

Step 2: Work with Bankruptcy & Divorce Attorneys

Lawyers handling bankruptcies, divorces, and estate planning deal with clients needing fast sales. Build partnerships by:

  • Offering a win-win solution for their clients.

  • Creating educational materials for attorneys to provide to clients.

Step 3: Partner with Wholesalers & Bird Dogs

Wholesalers often pass on deals with little equity—which is perfect for subject-to transactions. Establish relationships with wholesalers and offer to take these deals off their hands.


4. Use Driving for Dollars & Bandit Signs

Sometimes, the best leads come from physically scouting neighborhoods where homeowners may be struggling.

Step 1: Drive for Dollars

  • Look for vacant or distressed properties with overgrown yards, boarded-up windows, or deferred maintenance.

  • Write down the address and use county property records to find the owner.

  • Contact them with an offer to buy their home subject to the existing loan.

Step 2: Use Bandit Signs

  • Place signs in high-traffic areas with messages like:

    • "Behind on Mortgage? We Can Help! Call [Your Number]"

    • "Sell Your House Fast – No Banks Needed!"

  • Stick to intersections, grocery stores, and busy streets.


5. Target Expired Listings & FSBOs (For Sale By Owner)

Sellers who couldn’t sell their homes through traditional methods may be open to a subject-to deal.

Step 1: Pull Expired Listings

  • Use MLS or online platforms to find homes that sat on the market for months without selling.

  • Contact owners and offer a creative financing solution.

Step 2: Target FSBOs

  • Many FSBO sellers struggle to find buyers.

  • Search Zillow, Craigslist, and FSBO listing sites.

  • Offer to take over payments instead of traditional financing.


Final Thoughts: Finding Subject-To Deals Takes Consistency

Finding subject-to deals requires persistence and multiple lead sources. By implementing these five strategies—targeting motivated sellers, leveraging online marketing, networking, driving for dollars, and contacting FSBOs/expired listings—you can build a steady pipeline of opportunities.

Quick Recap:

✅ Motivated Sellers – Use public records and direct outreach. ✅ Online Marketing – SEO, ads, and social media to generate inbound leads. ✅ Networking – Realtors, attorneys, and wholesalers can send you deals. ✅ Driving for Dollars – Physically scout distressed properties. ✅ FSBOs & Expired Listings – Target sellers struggling to sell traditionally.

If you stay consistent with these strategies, subject-to deals will start finding YOU. Which method are you excited to try first? 🚀



Market Insights & Strategies

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03.22.2025

How Subject-To Deals Work in Real Estate: A Step-by-Step Breakdown

Subject-to real estate investing is a powerful strategy that allows investors to acquire properties without having to qualify for a traditional mortgage. This creative financing method can be an excellent way to build a real estate portfolio with little to no money down. In this guide, we will provide a detailed, step-by-step breakdown of how subject-to deals work, their advantages and risks, and how you can successfully implement them in your investing strategy.What is a Subject-To Deal?A subject-to real estate deal occurs when a buyer takes ownership of a property while leaving the existing mortgage in the seller's name. The term "subject to" refers to the fact that the purchase is subject to the existing financing remaining in place. In this scenario, the investor agrees to make the mortgage payments on behalf of the seller, but the original loan remains in the seller’s name.Unlike traditional home purchases that require a buyer to secure new financing, subject-to deals allow investors to bypass lenders and acquire properties with minimal cash upfront. This strategy is particularly useful when dealing with distressed sellers who need a fast solution.Step-by-Step Breakdown of a Subject-To DealStep 1: Identify Potential DealsFinding the right properties for subject-to deals requires targeting motivated sellers who are eager to offload their homes. These situations often include:Homeowners facing foreclosureSellers struggling with financial hardshipOwners dealing with divorce or relocationLandlords tired of managing rental propertiesProperties with little to no equityInvestors can find these opportunities through:Direct mail campaignsOnline foreclosure listingsNetworking with real estate agentsDriving for dollars (physically scouting distressed properties)Step 2: Approach and Negotiate with the SellerOnce a potential deal is identified, the next step is to communicate with the seller to discuss a subject-to arrangement. The key to negotiation is demonstrating how this deal benefits both parties.Benefits to the Seller:Avoids foreclosure and credit damageRemoves mortgage payment burdenEnables a faster sale without costly repairs or commissionsKey Points to Negotiate:Mortgage payment amount and termsWhether any additional money is needed upfront (sometimes sellers request a small sum)Transfer of property ownership while mortgage remains in placeResponsibility for taxes, insurance, and maintenanceStep 3: Conduct Due DiligenceBefore finalizing a subject-to deal, thorough due diligence is essential to avoid potential pitfalls.What to Check:Mortgage Terms: Review the existing loan terms, including interest rate, remaining balance, and whether the loan is current or in default.Title Search: Ensure there are no liens, judgments, or encumbrances on the property.Property Condition: Assess necessary repairs or renovations.Due-on-Sale Clause: Some mortgages contain a due-on-sale clause, which allows the lender to demand full repayment if ownership changes. Though rarely enforced, it is a risk to consider.Step 4: Draft and Sign Legal DocumentsProper documentation is crucial to protect both the buyer and the seller. The key legal documents in a subject-to transaction include:Purchase Agreement: Outlines the terms of the deal and agreement to take over mortgage payments.Warranty Deed or Quitclaim Deed: Transfers property ownership from the seller to the buyer.Disclosure Agreement: Acknowledges the seller understands they remain responsible for the mortgage loan.Power of Attorney (Optional): Allows the buyer to handle matters related to the mortgage, such as requesting payoff statements or making inquiries with the lender.It’s advisable to work with a real estate attorney to ensure compliance with local laws and to safeguard against potential issues.Step 5: Close the Deal and Take OwnershipOnce the paperwork is completed, the transaction can be closed, and ownership is transferred. Unlike traditional real estate transactions, subject-to deals often do not require a title company or lender involvement, making the closing process quicker and less expensive.At this stage, the investor begins making payments on the existing mortgage while taking full control of the property.Step 6: Implement an Exit StrategyAfter acquiring a subject-to property, investors have several options for making a profit:Fix and Flip: Make improvements and sell the property at a higher price.Rent and Hold: Lease the property to tenants for long-term cash flow.Lease Option: Rent the property with an option for the tenant to buy later.Seller Financing: Resell the home using owner financing to another buyer.The chosen strategy depends on market conditions, property condition, and investment goals.Pros and Cons of Subject-To DealsAdvantages:✅ No Need for Bank Financing: Buyers don’t have to apply for a new mortgage. ✅ Little to No Money Down: Investors can acquire properties with minimal upfront capital. ✅ Faster Closings: Without bank involvement, transactions close quickly. ✅ Helps Sellers in Distress: Provides a way for struggling homeowners to move on from financial burdens. ✅ Potential for High Returns: With the right exit strategy, subject-to deals can yield significant profits.Risks and Challenges:⚠️ Due-on-Sale Clause: Lenders can demand full loan repayment, though this is rare. ⚠️ Seller’s Credit Risk: If the investor fails to make payments, the seller’s credit is at risk. ⚠️ Legal Complexities: Subject-to deals must be structured correctly to avoid legal issues. ⚠️ Market Dependency: If property values drop, profitability may be affected.Tips for a Successful Subject-To InvestmentWork with Motivated Sellers: Ensure the seller genuinely needs the arrangement to avoid complications.Stay Transparent: Clearly explain risks and benefits to the seller.Make Payments on Time: Avoid jeopardizing the seller’s credit or risking foreclosure.Use a Trust or LLC: Some investors place properties in a trust or LLC to reduce due-on-sale clause risks.Consult a Real Estate Attorney: Legal guidance ensures proper contract structuring and compliance.ConclusionSubject-to real estate investing is an excellent strategy for acquiring properties with minimal upfront capital and avoiding traditional financing hurdles. By understanding the step-by-step process, negotiating effectively, and structuring deals correctly, investors can build a profitable real estate portfolio while helping distressed sellers.While subject-to deals offer numerous benefits, they also come with risks that require careful management. With the right approach, due diligence, and proper execution, this creative financing method can be a game-changer in real estate investing.If you’re looking to get started, research local laws, connect with experienced investors, and start networking with motivated sellers. The opportunities in subject-to real estate investing are vast—if you know how to leverage them effectively.

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