I need to get rid of a rental property, an investor offered to do a subject 2.?

I don't have much equity in the house and it needs repairs and I am sick of dealing with the slug renters. How does sub 2 work. What happens with my yearly tax statement? What happens if I die? What if he dies? No one else will give me the cash for the entire mortgage.

"Subject to" is subject to your existing mortgage.
In other words you walk away from the property with a live, existing mortgage - your current mortgage with your name STILL on the original mortgaage documents AND STILL in the original first position with your monthly payment STILL due and payable.

In other words, you're STILL left "holding the bag".

IF you thoroughly trust the person you're doing the deal with There's nothing wrong with this deal.

There is another way to do the deal AND you STILL have control of your property AND you still make sure your monthly payments and expenses are being paid:
Its called "Contract for Deed". This document is not recorded. Until the Buyer fulfills his/her/their end of the contract, there is no transfer of the property.

Buyer takes care of ALL Maintenance and repairs. The Buyer puts up with the tenants and all the relatreed issues. You MIGHT have to get rid of the current tenants and provide a vacant property. This point is negotiable.

The taxes, sewer and trash as well as the insurance continue to be paid because the Buyer pays YOU AND you continue making those payments as you normally would.

Until and unless the Buyer fulfills all the terms and conditions of the Contract for Deed, there is no transfer of title and no closing/settlement/escrow.

Thanks for asking your Q! I enjoyed answering it!

VTY,
Ron Berue
Yes, that is my real last name!

3-21-08 Hello hyacinth!!
Thank you very, very much. I鈥檓 honored my answer was chosen THE BEST!

When I received the notice, it REALLY helped make my day MUCH better!

Again, Thank You Very Much!

Very Truly Yours,
Ron Berue Report It

If he buys the property 'subject to' the existing mortgage debt, you are still responsible for it. He is not formally assuming it. Any late payments will be reported in your credit bureau. And if he defaults, you get the credit hit. There are other risks involved. For example, your note almost certainly contains a 'due on sale' clause. This allows the lender to call your loan due and payable if you transfer title to the property without their knowledge and consent. Now, most lenders are up to their eyeballs in foreclosures so they aren't likely to look for more trouble. But it is a factor you should consider.
If you die, why worry about it? If he dies, your credit could be at risk since likely nobody will step into his commitment on the property. In short, it's a risky way for you to sell. But it is done often when someone has just had enough of a property, like you seem to have had. Be careful!

need to be real careful with these deals. They just want to take over your mortgage payment and any equity you have in the property so they can do a rent to own with a buyer. What happens when their buyer trashes the house, they do not make the payments and you are left holding the bag ?