Wholesaling Subject-To Deals in Georgia

The short answer

Can you wholesale subject-to deals in Georgia?

Sometimes, but the structure is risky and a Georgia attorney should review every deal. The loan stays in the seller’s name, so the seller still carries the risk.

In a subject-to deal, the buyer takes title and makes the payments, but the loan is not paid off. Most Georgia mortgages use a security deed with a due-on-sale clause. The lender may demand full payment if the home is sold. Federal law lets lenders do this in many cases. Read our due-on-sale clause guide before you offer one of these deals.

Wholesaling a subject-to deal is harder than a cash assignment. Your buyer must be able to make the payments, and the seller must understand that the loan stays in their name. Write everything down, including who pays the taxes and insurance, what happens if a payment is missed and how the buyer will prove each payment was made. Our subject-to guide covers the basics, and our creative financing guide compares other options.

The opportunity

Why subject-to deals appeal to Georgia sellers

Some Athens owners owe more than they can sell for, or are behind on payments and want to avoid foreclosure. A subject-to deal can stop missed payments from hurting their credit. Athens also has steady student and university demand, so rental buyers may want homes with low-rate loans. Still, never promise a seller that the loan will be safe. Athens has older homes near campus and newer ones toward Watkinsville, and values differ a lot between them, so check comps for the exact street before you talk numbers. Remember too that taxes and insurance must stay current. Our negotiating guide helps you stay honest.

Lead sources

Where to find subject-to leads in Georgia

• Pre-foreclosure notices. Owners who got a notice of sale may want options. See notices of default.
• Lis pendens and filings. Check lis pendens records for distress.
• Landlords with loans. Some owners want out but have little equity.
• Expired listings. Owners who could not sell may accept a deal that takes over payments.
• Referrals. Mortgage brokers and attorneys sometimes know owners who need help.

Your exit

Who buys subject-to deals in Georgia

Buyers are usually investors who want a low rate or families who can afford the payment but not a new loan. They need to understand the due-on-sale risk and sign a clear agreement. A buyer who plans to refinance within a year or two should say so up front, since rates and credit can change.

Get the loan details first: balance, rate, payment, taxes and insurance, and whether payments are current. Ask for a payoff statement from the servicer with the owner’s written consent.

Step by step

How to start wholesaling subject-to deals in Georgia

1. Get loan facts. Collect statements and confirm the balance and status.
2. Check the title. Look for other liens and ask an attorney about the security deed.
3. Explain the risk. Tell the seller and buyer about the due-on-sale clause in writing.
4. Check insurance. Make sure the policy names the right people.
5. Run the numbers. Use the MAO calculator and the ARV calculator.
6. Sign with an attorney. A Georgia attorney should draft and review the papers.
7. Close and monitor. Use an investor-friendly title company and keep proof of payments.

A couple in Athens had taken a job out of state. They owed $212,000 at a low rate and were two payments behind after a layoff. They wanted to avoid foreclosure and move on.

You explained the due-on-sale risk to them and to your buyer in writing. An attorney drafted the papers. The buyer, a local landlord, agreed to bring the loan current and make payments.

The sellers got $6,000 for moving costs and kept a clean record on the loan. Both sides signed papers that explained the risk. You earned a $7,500 fee, and the buyer got a home with a low rate. Six months later the loan was current and the sellers’ credit had begun to recover.

Georgia rules to know

Georgia rules for subject-to deals

Georgia uses security deeds, and foreclosure is non-judicial. Under O.C.G.A. 44-14-162.2, the lender must send notice at least 30 days before a power-of-sale foreclosure. Courthouse sales are generally held on the first Tuesday of the month. If a buyer misses payments, the seller’s credit and the home are both at risk.

Federal law generally lets lenders enforce due-on-sale clauses, with some exceptions. Whether a subject-to deal creates legal risk for you depends on the facts, including how you describe it and who you tell. Georgia has no clear wholesaling statute, and broker law in O.C.G.A. 43-40-1 can apply. Use an attorney. See our guide on legality.

Learn it with a mentor

Learn creative deals with care

Subject-to deals need clear papers, honest talks and a lawyer who has seen them before. Mentorship students bring us their deal terms and we help them see the risks.

FAQ

Subject-To Deals in Georgia: common questions

Keep going

More Georgia wholesaling guides

Read the full Georgia wholesaling guide or pick another situation below.

Guides that go deeper