{
  "slug": "subject-to-deal-math",
  "title": "Subject-To Deal Math Calculator",
  "heading": "Subject-To Deal Math Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/subject-to-deal-math",
  "summary": "Model equity captured and monthly spread on a subject-to acquisition.",
  "description": "In a subject-to deal, you take title to a property while the existing mortgage stays in the seller's name and you make the payments — no new loan, no qualifying, no due-on-sale trigger event unless the lender chooses to enforce it (a real risk worth understanding, not a footnote). This calculator computes the equity you're effectively acquiring (property value minus the existing loan balance minus any cash you pay the seller), the monthly cash flow spread between market rent and the existing PITI payment, and your cash-on-cash return based only on the cash you put in — which is often just closing costs and any seller payment, not a full down payment. That capital efficiency is the entire appeal of subject-to: you control an asset and its equity for a fraction of the capital a traditional purchase requires. The tradeoff is the due-on-sale clause risk in nearly every conventional mortgage, meaning the lender can technically call the loan due upon transfer of title, even though enforcement in owner-occupant-to-investor subject-to deals is statistically uncommon.",
  "formula": "Equity captured = Property value − existing loan balance − cash to seller; Monthly spread = Market rent − existing PITI payment; Cash-on-cash = (Monthly spread × 12) ÷ total cash invested.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=subject-to-deal-math",
  "inputs": [
    {
      "id": "propertyValue",
      "label": "Property value",
      "kind": "number",
      "hint": null,
      "default": 280000,
      "unit": "$",
      "min": 1,
      "max": null
    },
    {
      "id": "loanBalance",
      "label": "Existing mortgage balance",
      "kind": "number",
      "hint": null,
      "default": 210000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "existingPiti",
      "label": "Existing monthly PITI payment",
      "kind": "number",
      "hint": null,
      "default": 1650,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "marketRent",
      "label": "Market rent (or your rent if owner-occupying)",
      "kind": "number",
      "hint": null,
      "default": 2200,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "cashToSeller",
      "label": "Cash paid to seller at closing",
      "kind": "number",
      "hint": null,
      "default": 8000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "closingCosts",
      "label": "Closing / transfer costs",
      "kind": "number",
      "hint": null,
      "default": 3000,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "equityCaptured",
      "label": "Equity captured at acquisition",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "monthlySpread",
      "label": "Monthly cash flow spread",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "cashOnCash",
      "label": "Cash-on-cash return",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "annualSpread",
      "label": "Annual cash flow",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "totalCashInvested",
      "label": "Total cash invested",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Property value: 280000 $",
      "Existing mortgage balance: 210000 $",
      "Existing monthly PITI payment: 1650 $",
      "Market rent (or your rent if owner-occupying): 2200 $",
      "Cash paid to seller at closing: 8000 $",
      "Closing / transfer costs: 3000 $"
    ],
    "outputs": [
      "Equity captured at acquisition: $62,000",
      "Monthly cash flow spread: $550",
      "Cash-on-cash return: 60%",
      "Annual cash flow: $6,600",
      "Total cash invested: $11,000"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter property value ($).",
      "Enter existing mortgage balance ($).",
      "Enter existing monthly piti payment ($).",
      "Enter market rent (or your rent if owner-occupying) ($).",
      "Enter cash paid to seller at closing ($).",
      "Enter closing / transfer costs ($).",
      "Read your equity captured at acquisition on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "propertyValue": 168000,
        "loanBalance": 126000,
        "existingPiti": 1000,
        "marketRent": 1325,
        "cashToSeller": 5000,
        "closingCosts": 1750
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "propertyValue": 280000,
        "loanBalance": 210000,
        "existingPiti": 1650,
        "marketRent": 2200,
        "cashToSeller": 8000,
        "closingCosts": 3000
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "propertyValue": 448000,
        "loanBalance": 336000,
        "existingPiti": 2650,
        "marketRent": 3525,
        "cashToSeller": 13000,
        "closingCosts": 4750
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What is the due-on-sale risk in plain terms?",
      "a": "Nearly every conventional and FHA mortgage has a clause letting the lender demand full repayment if title transfers without their consent. In practice, lenders rarely enforce this on performing loans because it costs them money to call a loan that's being paid on time, but it is a real contractual right, and rate environments where the underlying rate is well below market increase the incentive for a lender or loan servicer to enforce it."
    },
    {
      "q": "How is this different from a wraparound mortgage?",
      "a": "In a straight subject-to, the buyer pays the existing lender directly (or through a servicing arrangement) and there's no new note between buyer and seller. A wraparound adds a new note from buyer to seller at a rate that's typically higher than the underlying loan, with the seller keeping the spread, which changes the cash flow and risk allocation from what this calculator models."
    },
    {
      "q": "Why would a seller agree to this?",
      "a": "Common motivations: they're behind on payments and want to avoid foreclosure, they're relocating and can't sell for enough to cover the loan plus costs, or they inherited a property with a mortgage they don't want to keep paying. The seller's credit stays tied to the loan until it's paid off or refinanced, which is a real risk for them if the buyer stops paying."
    },
    {
      "q": "Should equity captured count as immediate profit?",
      "a": "No — it's paper equity, not cash, and you only realize it by selling or refinancing later. Treat it as a factor in total return alongside cash flow, not as money in hand, and remember you're also taking on the loan payment obligation and property management responsibilities that come with it."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/seller-financing-note-yield",
    "https://www.revenuelab.fyi/toolbox/hard-money-bridge-cost",
    "https://www.revenuelab.fyi/toolbox/brrrr-refinance-capture"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Subject-To Deal Math Calculator (https://www.revenuelab.fyi/toolbox/subject-to-deal-math)"
}