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Subject-To Cash Flow Calculator

Subject-to: buyer takes title, seller's existing mortgage stays in place. Buyer makes the payments directly. Common for distressed sellers who need out and investors wanting low-rate assumption. This calculator models cash flow on the deal including due-on-sale risk.

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Monthly cash flow

$75

Annual cash flow

$900

Cash-on-cash ROI

7.2%

Total cash invested

$12,500

Effective rent (after vacancy)

$2,115

Total monthly cost

$2,040

Instant equity (price − loan)

$45,000

How the math works

Rent $2,250 × 94% vacancy = $2,115 effective. Minus $1,380 P&I + $290 tax + $95 ins + $275 mgmt = $2,040. Monthly cash $75 = $900/yr. On $12,500 invested: 7.2% cash-on-cash. Plus $45K instant equity.

Subject-to shines when the seller is motivated and the existing loan is low-rate. A 3.5% assumed mortgage vs 6.75% new loan = hundreds of dollars a month in better cash flow. Do the legal setup right and keep reserves for the payment no matter what.

How to Use

  1. Enter purchase terms: inherited mortgage P&I, tax, insurance, HOA.
  2. Enter rental income and operating cost.
  3. See net monthly cash flow and ROI on any cash you put in.

Frequently Asked Questions

What's due-on-sale risk?

Most conventional mortgages have a due-on-sale clause — lender can call the loan in full if the borrower transfers title without consent. In practice, lenders rarely enforce on paying-current loans, but it's real risk. Dodd-Frank makes enforcement harder but not impossible.

How do I protect the seller?

Put property in a land trust and assign beneficial interest. Mortgage still reads seller's name but trust mechanics provide legal insulation. Have a RE attorney draft to ensure state-specific compliance.

Who pays what tax?

Buyer is now on title — pays property tax directly. Escrow can continue servicing through the old mortgage's escrow account (lender typically doesn't notice title change). Alternatively, buyer pays escrow separately.

Is subject-to legal?

Yes everywhere in the US, but enforceability varies by state. All parties need full disclosure (seller knows they're still on the mortgage). Consult a RE attorney and make sure your paperwork is airtight.

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