EP 100: Is a Class Action Lawsuit Coming for a Subject To Investor?

Is Subject To dead?

That question is circulating heavily right now after multiple lawsuits surfaced in Florida involving an investor who acquired dozens of properties Subject To and allegedly stopped making payments. As foreclosure filings increase and sellers and private lenders come forward, rumors of a potential class action lawsuit have followed.

NOTICE: All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

In this episode, Courtney walks through what is actually happening, what is alleged versus proven, who is being impacted, and what Real Estate investors, agents, sellers, and private lenders should be paying attention to right now.

This conversation is not about panic. It is about accountability, risk, and doing Real Estate the right way.

What We Cover in This Episode

-Why multiple lawsuits in Florida have sparked renewed concern around Subject To deals

-How Subject To transactions work and why seller credit is always at risk

-Allegations of missed payments leading to foreclosure on Subject To properties

-The ripple effects on sellers, including damaged credit and potential employment or financing consequences

-How private money lenders may also be exposed when lending in second position on Subject To deals

-Why low, no, or negative equity Subject To deals are especially dangerous

-Red flags agents and sellers should recognize when reviewing Subject To offers

-The difference between bad faith actors and legitimate creative Real Estate operators

-Why volume Subject To strategies without reserves create systemic risk

-How public lawsuits and news coverage can impact the broader creative finance industry

-Why informed consent, transparency, and reserves matter more than ever

-Whether this situation could lead to increased regulation or additional legal action

-Why Subject To is not dead, but why execution and ethics matterKey Lessons for Investors, Sellers, and Lenders

-Subject To deals transfer title while leaving the loan in the seller’s name, creating long-term responsibility

-Missed payments do not just hurt investors. They directly harm sellers and lenders

-High cash flow strategies do not replace equity or proper capitalization

-Private money in second position on low equity deals carries extreme risk

-Sellers and agents should be cautious when Subject To offers include upfront cash on upside-down properties

-Vetting the buyer matters as much as the deal structure

-Creative Real Estate strategies require experience, reserves, and discipline

Courtney’s Perspective

Creative financing did not start on social media and it will not end because of one bad actor. Subject To has existed for decades and continues to be a viable solution in the right situations.

However, this case is a reminder that Subject To is not beginner-friendly, not volume-friendly without infrastructure, and not appropriate for low or negative equity deals in most cases.

Doing good business means making payments even when it hurts, maintaining reserves, and ensuring all parties understand the risks before closing.

Final ThoughtsThis situation is still unfolding. Civil lawsuits are active, rumors of a class action exist, and there may be additional legal or regulatory developments ahead.

Rather than jumping to conclusions, this episode encourages investors and professionals to slow down, pay attention, and recommit to ethical, informed, and responsible Real Estate practices.

Subscribe if you found this helpful and you can connect further with Courtney at CourtneyFricke.com.