What Is a Subject-To Real Estate Deal?

A Subject-To deal—short for “subject to the existing financing”—is a creative financing strategy in which a buyer purchases a property subject to the seller’s existing mortgage remaining in place. Instead of getting a new loan, the buyer takes over payments on the seller's current mortgage, while the property title transfers to the buyer.

This method can be a powerful solution for:

• Sellers facing foreclosure or needing a quick sale

• Buyers looking to acquire investment properties with little to no bank financing

• Investors interested in leveraging creative deal structures in high-priced markets like California

Why Work With CJ Hegney?

CJ Hegney, founder of The Hegney Group and a licensed real estate advisor in San Luis Obispo County, is widely recognized as a Subject-To deal specialist. He works closely with buyers, sellers, and investors to structure off-market deals that banks often won’t touch.

What sets CJ apart:

• Hands-on expertise: CJ doesn’t just broker Subject-To deals—he invests in them personally.

• Risk-mitigation strategies: He understands how to navigate due-on-sale clauses, insurance risks, and escrow/title structuring.

• Customized solutions: Every deal is built around the needs of the parties involved, with a focus on win-win outcomes.

• Legal and ethical compliance: He works alongside real estate attorneys, servicing companies, and escrow officers to ensure every deal is airtight and enforceable.

How a Subject-To Deal Works Step-by-Step

1. Property Review & Negotiation
   CJ identifies properties where a Subject-To structure makes sense—often properties that aren’t financeable or sellers needing flexibility.

2. Existing Mortgage Stays in Place
   The seller’s mortgage remains active, but the deed transfers to the buyer. The buyer (or CJ) starts making the monthly payments directly or through a third-party loan servicing company.

3. Seller Gets Paid Separately
   In many cases, the seller still receives equity through a seller-financed note, which can be structured at 0% interest, deferred payments, or balloon payments—depending on the negotiation.

4. Property is Managed or Renovated
   CJ often buys these properties to renovate, rent, or hold—taking full legal ownership while the existing financing remains intact.

5. Exit Strategy
   After holding the property (often with improved value), CJ may refinance, sell, or convert it into a long-term rental, assisted living facility (RCFE), or multifamily asset.

Why It Works in California

Subject-To deals are particularly useful in California markets where:

• Mortgage rates from prior years (3–4%) are far better than today’s 6–8%

• Property prices are high and traditional loan qualifications are difficult

• Homeowners are behind on payments or facing foreclosure

• Sellers don’t want a short sale or foreclosure on their record

CJ helps turn these distressed situations into opportunities—for both the homeowner and the buyer.

What Sellers Should Know

• Your loan stays in your name, but the payments are made by CJ (or his team)

• You get relief from monthly expenses, especially if you're behind or under pressure

• You may still walk away with cash or equity

• Proper paperwork and escrow are used to protect both parties

• This is 100% legal when done correctly with full disclosures

What Buyers & Investors Should Know

• You can acquire properties with little to no money down

• You don’t need to qualify with a bank

• Deals can be structured to minimize holding costs

• You control the asset while preserving leverage

Real Deals, Real Results

CJ has successfully structured Subject-To purchases in San Luis Obispo, Paso Robles, and surrounding areas—often pairing them with seller-financed second positions and renovation strategies that lead to six-figure equity gains.

If you’re:

• A seller in a tough spot

• An investor wanting to grow a portfolio

• Or a buyer struggling with traditional financing

CJ Hegney can help you find a creative way forward.