Subject-To lets a buyer take ownership of an RV park while the seller's existing loan stays in place. This guide walks through exactly how the structure works mechanically, the step-by-step process from finding the deal to closing, the documents involved, and the risks you need to plan for.
Subject-To in one paragraph
In a Subject-To purchase, the seller signs a deed transferring ownership of the park to the buyer. The seller's existing mortgage is not paid off and is not formally assumed. It stays in the seller's name, and the buyer takes title "subject to" that loan. From closing forward, the buyer makes the loan payments, runs the park, collects the income, and pays the expenses. The seller is paid for their equity separately, in cash at closing, through a seller note, or both.
The mechanics: who holds what
Ownership (title)
Moves to the buyer at closing by a recorded deed. The buyer is the legal owner of the park and its business assets that are included in the sale.
The existing loan
Stays exactly as it is: same lender, same rate, same payment, same balance, and still in the seller's name. The lender usually is not a party to the deal.
Who pays the loan
The buyer, every month, usually through a third-party loan servicer so both sides can verify payments were made on time.
The seller's equity
Price minus loan balance. Paid as cash at closing, a seller-carried note secured by the park, or a mix of the two.
Taxes and insurance
The buyer pays them. If the loan has an escrow account, those payments flow through the loan payment. Insurance must be updated to cover the new owner.
Operations
The buyer takes over reservations, staff, utilities, vendors, and licenses. Income and expenses belong to the buyer from the closing date.
Step by step: from finding the deal to closing
Find a seller who fits Subject-To
Subject-To works best when the owner has an existing loan with terms worth keeping and wants out more than they want top-dollar cash. Common situations: retiring or tired owners, owners who moved away, parks with deferred maintenance, or owners with modest equity. Off-market outreach finds these sellers far more often than public listings. See our guide on finding off-market deals.
Get the loan facts in writing
Before you talk price, ask for a recent mortgage statement and the loan documents. You need the lender name, current balance, interest rate, monthly payment, whether taxes and insurance are escrowed, the maturity date, any balloon payment, prepayment terms, and whether the loan is current. Commercial park loans often mature or balloon sooner than home loans, so a near-term maturity changes the whole plan.
Underwrite the park
Collect 2 to 3 years of income and expenses, monthly occupancy or booking reports, the site count by type (full hookup, partial, tent, cabins), and a list of monthly or long-term guests. Check that the park's net operating income comfortably covers the existing loan payment in the slow season, not just the busy months.
Structure the offer
Price = existing loan balance + seller's equity. Decide how the equity is paid: cash at closing, a seller second note, or both. Spell out who pays closing costs, the closing date, what personal property is included (golf carts, equipment, reservation software, signage), and how deposits and prepaid reservations are handled.
Disclose the structure clearly
The seller must understand that their loan stays in their name, that the lender could call the loan due under the due-on-sale clause, and how they will be protected. A written disclosure signed by the seller is standard practice among careful Subject-To buyers.
Sign the purchase agreement
Use a purchase agreement prepared or reviewed by a real estate attorney in the park's state, with a Subject-To addendum stating the property is sold subject to the existing financing. Include a due diligence period and your contingencies.
Complete due diligence
Run the full checklist below: title search, survey, utilities, zoning and permits, environmental, insurance quotes, and a physical inspection of roads, pads, hookups, and buildings.
Set up servicing and insurance
Open an account with a loan servicing company that will collect your payment and pay the lender, giving both sides payment records. Bind a new insurance policy naming you as the insured and keeping the lender as mortgagee, so the lender's interest stays covered.
Close with a title or closing company
The seller signs the deed and the closing documents. The deed is recorded. Equity cash is paid, any seller note is signed and recorded, and the servicing account is set up to start with the next payment due.
Take over operations
Transfer utilities, the reservation system, websites and listings, bank accounts for park income, business licenses, and vendor contracts. Tell guests and staff about the new ownership.
Hypothetical example
| Agreed purchase price | $900,000 |
| Existing loan balance (stays in place) | $650,000 |
| Seller's equity ($900,000 − $650,000) | $250,000 |
| Equity paid in cash at closing | $100,000 |
| Equity paid by seller second note | $150,000 |
| Total to seller ($100,000 + $150,000) | $250,000 |
After closing, the buyer pays the existing loan payment each month through a servicer and also pays the seller's $150,000 second note on whatever terms the two sides agreed. Both payments need to fit inside the park's net operating income with room to spare.
The due-on-sale clause: the main risk
Most mortgages include a due-on-sale clause, which lets the lender demand the full balance if the property is transferred without its consent. Transferring a deed subject to the loan is generally not illegal, but it can give the lender the right to call the loan. Lenders don't always enforce it, but you must plan as if they might.
- Keep payments perfectly on time. Late payments draw attention.
- Have a backup plan: reserves, a refinance path, or partners who can step in if the loan is called.
- Keep the lender's interest insured.
- Have an attorney explain how your state's laws and the specific loan documents apply.
Other risks to plan for
- Balloon or maturity date: know exactly when the loan must be paid off and how you will do it.
- Seller protection: the seller's credit depends on your payments. Servicing and clear documents protect both sides.
- Seasonality: the park must carry the payment in the off-season.
- Loan covenants: commercial loans may require reports or have other terms. Read the note and mortgage in full.
Documents involved
- Purchase and sale agreement with a Subject-To addendum
- Seller disclosure and acknowledgment of the existing financing
- Deed (recorded)
- Existing loan documents, mortgage statement, and payoff or balance letter
- Promissory note and mortgage or deed of trust, if the seller carries a second note
- Loan servicing agreement
- Insurance policy with the lender as mortgagee
- Bill of sale for equipment and business assets
- Assignment of guest contracts, deposits, and service agreements
- Settlement statement from the title or closing company
RV park due diligence checklist
- Income and expense statements for 2 to 3 years, plus bank statements to verify
- Occupancy and reservation reports by month; nightly vs. monthly vs. seasonal mix
- Site inventory: hookup type, amperage (30/50 amp), pad condition, pull-through vs. back-in
- Water source (city or well), sewer or septic, and any permits for those systems
- Electrical capacity and condition of pedestals and lines
- Zoning, the park's operating permits, and any limits on length of stay
- Title search, survey, easements, and access
- Flood zone, environmental concerns, and insurance quotes
- Condition of roads, bathhouses, laundry, office, and store
- Existing loan documents, payment history, and maturity or balloon date
Protecting the seller (and your reputation)
A Subject-To deal only works long term if the seller is treated fairly. The seller is trusting you with their credit. Careful buyers build protections into the deal so the seller can see it is being handled properly:
- Third-party servicing: the servicer collects your payment and pays the lender, and the seller can check payment status.
- Payment reserves: some buyers set aside several months of loan payments in reserve so a slow season never causes a late payment.
- Clear written disclosures: the seller signs an acknowledgment that the loan stays in their name and that the lender could call it due.
- Insurance in place: the policy protects the property and keeps the lender listed as mortgagee.
- A defined exit: state in writing when and how you intend to refinance or pay off the loan.
Common mistakes to avoid
- Skipping the loan documents. Buying without reading the note and mortgage can hide a balloon, a variable rate, or covenants that change everything.
- Underwriting only the peak season. RV park income can drop sharply in the off-season. Model the slowest months.
- No reserves. Pumps fail, roads wash out, and storms happen. A Subject-To buyer can't miss a payment.
- Paying the seller directly with no records. Use a servicer so there is a clean payment history.
- Forgetting the business side. Reservations, deposits, online listings, and staff must transfer smoothly or income drops right after closing.
- Not planning the exit. Know whether you will refinance, sell, or hold, and on what timeline.
Subject-To vs. other structures
Formal assumption
The lender approves you and you take over the loan officially. It's cleaner but slower, and many loans don't allow it or charge fees.
Seller financing
The seller carries a note instead of an existing loan staying in place. Best when the park has little or no debt. See our seller financing guide.
Wraparound
The seller carries a new note that wraps around the existing loan. The buyer pays the seller, and the seller (or a servicer) keeps paying the original lender.
Glossary
- Due-on-sale clause
- A loan term letting the lender demand full payment if the property is transferred.
- Loan servicer
- A company that collects payments, pays the lender, and keeps records.
- Mortgagee
- The lender, listed on the insurance policy so its interest is protected.
- Net operating income (NOI)
- Income minus operating expenses, before loan payments.
- Seller second note
- A loan from the seller for part of their equity, secured behind the existing loan.
How it works with ParkSourced
- Join the buyers list. Tell us how you buy (cash, creative finance, or either) and which park types you want through the private access form.
- We source off-market. We reach out directly to park owners and look for sellers open to terms like the one in this guide.
- We do a first-pass review. Before a deal goes out, we gather what the seller provides, such as the rent roll, utility setup, and the proposed terms, so you can decide quickly whether it fits.
- You get first look. List members see the deal before it goes anywhere else. If it fits, we connect you with the seller.
- You and your team close. You run your own due diligence and close with your own attorney and title or closing company. ParkSourced does not give legal, tax, or financial advice.
Questions? Email parksourced@gmail.com.
Frequently asked questions
Is Subject-To legal?
Transferring a deed subject to an existing loan is generally legal, but it can trigger the lender's due-on-sale clause. Rules and practices vary by state, so work with a local real estate attorney.
Do I need the lender's permission?
Not to transfer the deed, but without the lender's consent the lender may have the right to call the loan due. A formal assumption with the lender's approval is a different, slower process.
Does the seller get paid anything?
Usually. The seller receives their equity as cash at closing, a seller-carried note, or a mix. Sellers with little equity sometimes accept mostly debt relief.
What happens if the lender calls the loan?
You would need to pay it off, typically by refinancing or selling. That's why reserves and a backup plan matter.
Can I refinance later?
Many buyers plan to refinance into their own loan once the park performs better or before a balloon date, depending on the lending market at that time.
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