(Watch the YouTube video of this episode here)

Subject-to deals are everywhere right now, but most investors skip the proper paperwork and end up with a handshake agreement. We just closed on a distressed flip in Sweet Home, OR using a 3.25% existing mortgage, and we're breaking down the 6 documents that make a subto actually safe: wraparound promissory note, third-party servicer, deed of trust, deed-in-lieu, insurance POA, and due-on-sale acknowledgment. This is how you protect yourself and the seller.

Key Moments

• (00:00) Introduction and Why Subto Is Hot Right Now
• (01:34) The Sweet Home Deal: Property, Numbers, and Why Subto Made Sense
• (04:18) How Subject-To Actually Works: Title, Mortgages, and Seller Risk
• (09:56) The Naked Subto Problem and Our 6-Document Solution
• (12:10) Breaking Down All 6 Safeguards
• (19:48) Advanced Structures, Deal Strategy, and Investor Protections
• (25:40) Closing Thoughts and How to Invest With Us

5 Key Lessons

1. Don't let a 3.25% rate walk out the door: When a seller can't sell conventionally, and you can inherit a below-market mortgage, a subto isn't just creative — it's the only math that works.
2. Get the paperwork or get burned: A handshake subto is called "naked" for a reason — you're exposed, the seller's exposed, and everyone's pretending it'll be fine until it isn't.
3. Wrap the mortgage before you wrap up the deal: A wraparound promissory note turns the seller into a lender, gives them legal recourse, and actually helps their debt-to-income ratio after a year.
4. Give the seller a way out before they need one: A pre-authorized deed-in-lieu skips the foreclosure nightmare entirely — clean, fast, and fair for everyone involved.
5. The due-on-sale clause is a lion that rarely bites — but document it anyway: Banks want payments, not headlines. Acknowledge the risk in writing, build in a cure window, and move on.

Let's build your wealth and improve housing, together.

I spent 12 years as a data scientist at HP and purchased $5M worth of real estate over 15 years using my own money. Now, I'm partnering with busy professionals to diversify their investments and generate passive income through real estate syndications and short-term flips—without dealing with tenants, toilets, or tantrums.

At Furlo Capital, we believe real estate isn't just a transaction; it's a partnership. Our value-add approach creates win-win situations where residents thrive, and investors build wealth. We're not just in this to make money—we want to make a difference.

If you're ready to diversify from stock market volatility and want reliable, steady returns, let's build your wealth and improve housing, together.Want to dive deeper into my investing thesis and strategy?

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