Subject To – Real Estate Investing For Beginners

Subscribe to my YouTube Channel right here.

Subject to is a strategy one of multiple strategy of acquiring control of a property. Okay, it’s a strategy to acquire control of the property because just because I bought something subject to doesn’t mean I actually have to own the property. Which is interesting, right? It is the process of buying a home without having to qualify without having to assume the loan without having to show bank records, takrut fax records, proof of funds, or anything really, what you’re doing in subject to is you’re taking over somebody else’s existing debt. And you are taking over the property.

So what happens in a subject to transaction is, somebody owns a house, that house has a mortgage to Wells Fargo, you the buyer, instead of paying off that mortgage to Wells Fargo, you simply take ownership of the property by transferring the deed or the the own the certificate of ownership into your name, but the mortgage always plays in the sellers name. So the way I look at is this Cody, do you do you buy things with credit card? Yes. Okay, so what kind of credit card yeah, by the way, a Mac star. Okay, so Cody’s an Amex guy. I’m an Amex guy too. I buy it literally the first card on my wallet right here is an Amex.

It’s one of two things I carry on my wallet is an MX right? So everything is paid for with somebody else’s money. We agree with that. Right? So you go to the grocery store. Cody, let’s say you go down to the grocery store to Albertsons bashes Smith’s Kroger’s, whatever it is, wherever you are in the country, and you buy $200 worth of groceries with your American Express. Who owns the those groceries? I do. You’re telling me that even though you use American Express’s money to buy those groceries, those groceries are not owned by American Express. Correct. Okay, that’s interesting. Okay.

Get access to my Mini-Course and the first three days of Zero to Hero: How to Overcome Fear.

So what happens is you get a receipt, right? You get the certificate of ownership, or the receipt of those groceries and you walk out of that store. And if the security guard stopped you and said, How do I know you own those groceries? What would you show them? The receipt receipt. Okay, but hold on, but you still use American Express’s money. Yes. Okay. So this is very similar to buying a house. Okay. So what happens is, when you go down to a bank, and you go, I want to buy that house over there, the bank loans the money to you to buy the house.

And, weirdly, the bank doesn’t own that house, the bank loaned you the money, you have a debt just like you do to the credit card company, you make a minimum payment, or you can pay it all off in one fell swoop if you decide to do so. But when you buy a house, the receipt of that house is called a deed, or the certificate of ownership is called a deed. Okay, in a grocery store. It’s called a receipt with a house. It’s called a deed. But it’s basically the same exact thing it shows who has ownership.

So Cody, let’s say you walk outside of that grocery store. Yep. And I run up to you. And I go, bro, I have no time. I have to hurry and get back to this party I have at my house, I will pay you for all of the groceries in your cart. Plus $20. And you go, okay, great. So what could what then happens is I go, Well, I’m not going to pay $200 in cash. What I’ll do is I’ll just pay off your American Express next month. Could we technically do that? Yeah, why not? So I just subject to your groceries.

Yeah, I didn’t even have to come. I didn’t have to even go through the store. I didn’t have to pick out the things I want. I didn’t have to wait through the line. I didn’t have to do anything. I literally just took over your American Express payment and next month, I’ll make your American Express payment when the money comes to me. Okay. So the way I told this story ones is I told the story of essentially, let’s say Cody, you go, Alright, I’m gonna go out, and I’m gonna have a big barbecue. I’m gonna buy hot dogs. I’m gonna buy buns. I’m gonna buy ketchup, mustard, all that kind of stuff.