Posted by Russ Sims on February 10, 2001 at 11:50:57:
“Subject to” refers to buying a home “subject to” the seller’s financing.So you as buyer take title to the home (usually by means of a land trust or PACTrust) and you simply take over the seller’s payments. The loan stays in the seller’s name for a period of time you agree on, say 3 to 5 years. You may then sell the home and offer it as a lease/option or owner contract and you can require that your buyer refinance and cash you out in 3 to 5 years (or whatever), so that you can then pay off the original seller’s underlying loan and collect what will hopefully be a nice back end profit. This is a very powerful way to aquire homes zero down with no loan in your name!!