Lex Levinrad Real Estate Investor, Speaker, Author & Mentor

On today's podcast episode, I talk about buying houses subject to the existing mortgage. This investment strategy is also known as "assuming the mortgage" or buying "subject to".  As prices have pulled back around 15% from the peak, many sellers are realizing that they will not be able to get their Zillow estimate if they sell their house. There are a lot of people who purchased houses 3 years ago when interest rates were as low as 2.5% or 3% (on a 30 year fixed rate mortgage). Today the rate is 6.5% which is more than double what the rate was just 3 years ago. This has created an opportunity with many motivated seller leads where sellers are calling us and trying to sell their house. As an example, let's look at one of the leads that called my office recently. This was a young couple who had purchased their house for $225,000 a few years ago. They had put down $25,000 and their original loan balance was $200,000. Their interest rate was 3%. The interest component on their 30 year mortgage was a monthly payme