Field Property Partners
Sub2 / Mortgage Takeover

123 Sub2 Test St, Birmingham AL

Saved 5/21/2026, 10:40:03 AM · ID 9
yellowHybrid
Sub2 advantage
1.36% below market
Existing 5.00% vs current market 6.36% · saves ~$98/mo vs new financing
Purchase price
$200,000
Buyer purchase price
$210,000
Your markup
$10,000

Sub2 takeover

Existing balance$120,000
Existing rate5.00%
Remaining amortization25 years
Monthly payment$702

Carryback (Hybrid)

Amount$60,000
Rate5.00%
Amortization30 years
Monthly payment$322

Cash structure

Seller equity$80,000
Down payment to seller$20,000
Your markup$10,000
Buyer cash invested$30,000
Total monthly debt service$1,024

Buyer monthly cash flow

Gross rent$2,200
Vacancy($110)
Effective rent$2,090
Property tax($250)
Insurance($120)
Management($167)
Maintenance($110)
Sub2 P&I($702)
Carryback P&I($322)
Monthly cash flow$419

Buyer returns

Annual cash flow
$5,030
Cash-on-cash
16.8%
Cash invested
$30,000

Disclosures (operator reference)

Seller disclosure (subject-to): About your existing financing: Your current mortgage will remain in your name after closing, with the buyer making the payments. This is called a 'subject-to' purchase. While the buyer is contractually obligated to make these payments and most do so reliably, you should know that if they ever stopped paying, your credit would be affected. We can discuss strategies to protect you, including ways to confirm the buyer's payment performance over time.

Buyer disclosure (due-on-sale): Due-on-sale clause: The existing mortgage contains a standard due-on-sale provision. While banks rarely call performing loans, this is a known risk in subject-to acquisitions. Buyers should plan refinance contingencies accordingly.

Notes

  • Rate spread only 1.4% (existing rate ~equal to current market) — Sub2 advantage marginal
  • EMD at risk: $20,000 — confirm buyer pipeline before opening escrow

Contracts

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Owner & property context

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