Month: January 2021

Taking a property “subject to” the existing mortgage means that you get the deed but you do not take over liability for the loan. The loan stays in the previous homeowner’s name. Subject To Deals (aka Get the Deed) are one of the most creative ways to take control of a property while also helping a seller that is no longer able to be financially responsible for the loan.

“Subject-To” (aka Get the Deed) is a real estate financing technique that all serious investors should know and understand. It’s a hybrid between taking some responsibility with a sandwich lease option and taking full ownership responsibility. But your risk is minimized because the seller’s name remains on the mortgage (but not on the deed).

“Subject-To” (aka Get the Deed) gives you full control while minimizing risk.

Little or No Money Down and NO Credit Needed!

A great amount of flexibility comes with this method of control. Everyone of these deals is going to be unique. In many cases, the seller will be several mortgage payments behind when they realize giving up the deed is in their better interest rather than going through a foreclosure. Little money down could be the amount in back payments that you assume when you sign your name to the deed. But even if there is a little money down, it doesn’t have to come out of your pocket.

Among your many options is to have the seller continue making partial payments towards the mortgage until the back payments are made up. But ideally, you don’t want to have to rely on the seller for anything after you have the deed to the property. Your preferred method can be for you to begin making the mortgage payments and use another way to bring the mortgage current. That gives you complete control moving forward without any reliance on the seller. One way to do this is using a lease option to move in a tenant-buyer. You could use all or part of the tenant-buyer’s option fee to pay the mortgage back payments.

Using Subject To Deals (aka Get the Deed) means you don’t have to share any of the rent payment with the previous owner. You can craft a lease option without needing to meet the needs of the previous owner. The lease period can be as long or as short as you and the tenant-buyer decide. You control the maintenance responsibilities. You have full control of the lease option.

Taking over the seller’s existing mortgage means you do not have to apply for a new mortgage in your name. Everything moves very fast. No application fees. No credit checks. No income verification. No appraisals.

NO Credit Needed!

Why a Seller Will Sell But Keep the Mortgage

This can be a win-win scenario for both the seller and the investor. Sellers can avoid foreclosure and the devastating impact that it has on their credit by allowing you to take over their existing payments. Importantly, in their time of financial need, the seller will have monthly on-time payments recorded on their credit report as you make the mortgage payments in their name.

Among the many creative ways to structure Subject To Deals is refinancing the loan at some point in time. After you’ve made several on-time payments, many lenders are very willing to refinance the loan into your name with favorable terms and conditions. A good time to do this can be shortly after the previous owner has made up all of the back payments owed. Another is to lower the payments on a high-interest loan. And another is when a lease option buyer takes out a new loan in their name. Or whatever makes the best WIN-WIN-WIN for everyone involved.

As an ethical real estate investor and problem solver, you are the “Knight in Shining Armor” that relieves the seller’s headache and saves their credit!

The seller is helped and will thank you!

How Investors Profit with Subject to Deals (aka Get the Deed)

As an investor, you want to control as many properties as possible with as little of your own money as possible. The Subject to deal is a clear leader among the best methods to do this. Typically, you don’t even make a down payment. You simply take over the payments on the existing mortgage. Then you have complete control to earn your profit any way that you choose.

If the seller has some equity in the property (but can’t make the payments), you may have to pay more for the property than is remaining on the mortgage. But that doesn’t mean you need to make a lump-sum payment. You can defer the payment. You can use other people’s money with a lease option to pay the seller. You can simply make a second mortgage or wrap-around mortgage payment to the seller each month. And there are other creative solutions, but the bottom line is you have full control of the property with subject to deals!

With nothing down and no credit, you financially benefit from subject to deals in these and other ways:

Lease options. Subject to deals begin with little or no cash but are easily transformed into highly profitable lease options with 3 paydays!

Appreciation. Over the long term, you can depend on real estate values to go up.

Inflation. Once the sales price is locked in, the value of future dollars used to pay off the mortgage are worth less than today’s dollars (with a fixed-rate loan).

Positive cash flow. By following proven and sound business practices, every one of the properties that you control will generate cash into your bank account every month. You’ll earn a passive income whether you are at the beach, on the mountain, or working at another job.

Depreciation. Unlike personal residences, investment houses can be depreciated on your income taxes each year. Other types of businesses typically pay between 35% or more of profits in taxes. Depreciation is a huge advantage for real estate investors.

Tax shelter. Occasionally, real estate deals do result in financial setbacks (often temporary). Losses can be used to tax shelter other income you have. There are many write-offs you may be able to take – thanks to real estate.

Subject To Deals (aka Get the Deed) are a great way to invest using other people’s money.

Subject to deals (aka get the deed), is only one on a long list of creative ways to control more properties by using other people’s money. Compounding your profits is done by mixing and matching it with all of these other proven methods.

1. Investing In Real Estate with Lease Options.
2. Advanced strategies for Buying and Selling with Lease Options.
3. Your Wealth Building Arsenal.
4. Add Personalized Coaching.
5. Cooperative Lease Options.
6. Expand to Get the Deed “Subject To.”
7. Round it all out by Working with Realtors.

Happy Investing!

Wendy Patton

For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.

If you found this information useful, please visit again soon at wendypatton.com.

For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.

What did you think of this article? Please leave a comment below.

I SHARE IT ALL HERE! Everything you need to start and finish any sandwich lease option! The Wealth Building Arsenal contains all of the details you need for working with sellers, working with buyers, working with Realtors, and working with other investors.

Everything I’ve learned myself and from others over more than 25 years is right here.

Whether you are a brand new part-time investor or an experienced full-time investor, this is the entire sandwich lease option process on steroids.

Sandwich Leases Give Options to Investors Also

Every investor’s circumstances are different. Some have more than enough money to immediately begin making complex (and highly profitable) deals. Others are just beginning as investors and need methods requiring little or no money for the first deal or two. Those with plenty of experience will quickly understand the processes and be able to adapt these to their unique situations. The less experienced will benefit best from the step-by-step process that begins at the beginning with specific scripts for talking to sellers and buyers.

The Wealth Building Arsenal is my complete lease-option system. It includes ALL FOUR Lease Option courses: Cooperative Lease Options, Buying on Lease Options, Selling on Lease Options, and Working with Realtors^®.

For beginning investors, the cooperative lease option module requires the fewest steps to obtain the fastest profits. It also includes the contracts needed to write a rock-solid deal.

More experienced investors may want to begin with the advanced Working with Realtors^® module to rapidly build a network that can bring in 5, 8, or more deals every month. Other sandwich lease option courses warn you to stay away from real estate agents because of the possible complexity. I don’t. Instead, I’ve taken on this highly profitable challenge by finding solutions that make this another WIN-WIN-WIN-WIN system for investors, agents, sellers, and buyers. Another name I have for this module is the ‘Million Dollar system.’

Moderately experienced investors will probably be most comfortable in the middle between the seller and buyer with a standard sandwich lease option. With this system, you’ll have everything you need to lease option a property from a seller and sublet it to a tenant-buyer. The best part of any sandwich lease option is always the spread in the middle of the deal.

Regardless of where you begin, along with the detailed process, you’ll have all of the forms, contracts, and checklists needed to succeed with your very first deal.

Creating Your Wealth Building Arsenal – One Step at a Time

When you jump in with both feet, you instantly have all of the tools at your fingertips. This goes way beyond the scripts that I share for talking to sellers.

For instance, what do you know about handyman specials? Do just the words “handyman special” send shivers down your back? They shouldn’t. What I know about sandwich lease options is that I can’t provide enough homes for people who are looking for a handyman special. There is a lot of money to be made with these houses. The technique you’ll learn works in most areas of the country except in areas where the city requires certification or landlord licensing. They don’t work in those areas because the city won’t allow homes that aren’t perfectly up to code to be rented. However, sometimes these homes only need paint or a few simple items corrected. But sometimes they do need some major issues corrected.

You can’t expect to know everything all at once but you do want all of the information instantly available when you do need it. What do you know about HUD Section 8 tenants? Something you’ll want to know one day soon is that with a sandwich lease option, the payments, or most of them, come directly to you from the state (lowers your risk).

The Wealth Building Arsenal gives you all of the tools, including Strategies for Reducing Your Taxes and how to Exercise Your Option to Hold on for Another Twelve Months when it suits you.

You’ll Want a Business System to Organize Your Success

I get it. For your first deal or two, you’ll be completed absorbed with every detail and won’t have any trouble keeping track of the paperwork. But confidence and success quickly kick into high gear. By about month 3 and your 15^th sandwich lease option, you’ll fully understand how important an organized business system is. Obviously, the more success you have, the more files you’ll need to maintain. Three years from now, you might have 135 active properties in various stages of buying/selling, tracking rent payments, rehabs, finalizing tenant-buyer financing and you’ll have an administrative nightmare if you don’t have proven business systems in place.

What you need is an easy to follow and consistent system. A system that is the same for your first deal as well as the deals you’re working on in year three. A system that allows you to pick up any file that is at any stage of the process and know exactly what is going on at that moment. And at a glance, you want to know what needs to happen next.

I find the best system is color-coded so that I always know what I’m looking at or what I’m looking for. My system keeps track of every document and every conversation with both sellers and buyers. Probably, you’ll never need all of the documentation, but if you ever do need it, you will have it.

Success also means you’ll need good accounting software. You’ll want a system set it up for itemized reports per property, per expense account, per LLC, or whatever you want.

The Wealth Building Arsenal covers it all!

The Wealth Building Arsenal for sandwich lease options is the system that lets you keep track of it all. It has the details to succeed, beginning with your very first deal. It provides the big picture that shows you which of the four processes is best suited for a particular deal. From A to Z it’s all here.

After many years of experience, one of the documents that I depend on the most today is the one showing all of the properties I own, the current tenants, their lease option expiration date, and what utilities they are responsible to pay. It also shows the lease option expiration date with the seller. All of the details are in the file, but at a glance, I know where I am at with every one of my active properties at any given moment.

Best of all, I know every tenant who should be completing their financing and when that big payday is going to happen!

Whether you want to jump in with both feet using the Wealth Building Arsenal or learn a simple single process before taking on the next more profitable step, EVERYTHING YOU NEED IS RIGHT HERE!

1. Cooperative Lease Options.
2. Investing In Real Estate with Lease Options.
3. Advanced strategies for Buying and Selling with Lease Options.
4. You’re Wealth Building Arsenal.
5. Add Personalized Coaching.
6. Expand to Get the Deed “Subject To.”
7. Round it all out by Working with Realtors.

By Wendy Patton

For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.

If you found this information useful, please visit again soon at wendypatton.com.

For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.

What did you think of this article? Please leave a comment below.

You certainly have responsibilities to your tenant-buyers. But tenant-buyers also assume responsibilities once they sign the option to purchase agreement. Along with their right and privilege to buy the house, comes their responsibility to follow through on their sandwich lease option responsibilities.

Lease Option Fees are NOT REFUNDABLE – even though some people will try to get them back. They might make up stories to get their option fees back.

Lease Option Fees are Nonrefundable

This is probably the darker side of sandwich lease options but a very few tenant-buyers do change their minds about completing the purchase. Although I love being a professional in the sandwich lease option business, every type of business encounters an occasional difficult client.

Fortunately in this business, difficult clients tend to be rare. Remember, you are helping them fulfill a lifetime dream of becoming a homeowner when no one else wants to give them a decent chance at it. Almost all of your clients will be very happy with the opportunity for ownership and will eagerly fulfill their responsibilities. But when a problem comes up…

Honest and open communication solves most problems.

The signed paperwork is legally binding but open communication avoids and resolves misunderstandings. I make an extra effort to keep communication open with both the seller and tenant-buyer in all of my sandwich lease option deals. Still, I find it especially important to keep communication flowing with the tenant-buyer. Their right and privilege to become a homeowner require that they qualify for a loan even though they have a damaged credit rating. I consistently communicate to the tenant-buyer that they have a responsibility to work toward this (and I give them tools to do it).

The other important communication that needs to happen is a clear understanding of the rights and responsibilities that the option fee purchases for the tenant-buyer. (Yes, they are buying responsibilities.) The time to begin this is before the paperwork is signed. An important step is having the tenant-buyer explain to you how they understand key clauses of the agreement and have them initial those clauses, along with signing the contract.

A sandwich lease option also allows the tenant-buyer to walk away from the deal – by forfeiting the option fee.

The Tenant-Buyers Right to Walk Away – At a Cost

Both you and the seller have given the tenant-buyer the exclusive right to purchase the house under the agreed-to terms. But that exclusive right comes at the price of the option fee.

There are reasons for a tenant-buyer to walk away. One of the benefits of a sandwich lease option is for the tenant-buyer to “test drive” the house and neighborhood. Becoming a homeowner means they will live in the house for many years and probably send their kids to the local schools. They want to make sure the house and neighborhood are a good fit and have the right to buy the house once they know it fits their dream and needs. But maybe it isn’t a good fit. Maybe the couple divorces or they don’t get along with the neighbors. Maybe they don’t put in the effort to clean up their credit rating. There are a few reasons that can make the tenant-buyer change their mind.

A (very) few tenant-buyers will ask for the option fee back if they change their mind. Don’t refund the option fee if you have not done something wrong or there is not an unforeseen problem that makes the house uninhabitable. You have worked for the option fee. You and the seller have given up your rights to sell or lease the house to anyone else for a long period of time. You have created all of the sandwich lease option paperwork and helped the others understand the benefits (and responsibilities) of the process. You’ve managed the process. You do not have to return the option fee when you have completed your responsibilities.

The option fee pays for the right and privilege to purchase a home. Whether or not the tenant-buyer meets the terms of the option is up to them.

Maintenance Responsibilities for Sandwich Lease Options

Maintenance is another place to be sure you have open communication with the seller and tenant-buyer. It is also an area that you must understand your own responsibilities because you are the meat in the middle of a sandwich lease option.

A big benefit for you and the seller in a sandwich lease option is little or no maintenance – the tenant does it all!

From the beginning, make it clear to the tenant-buyer that they are responsible for all maintenance – major and minor. But at the same time, you need to be sure the house is kept in good repair for the sake of both you and the seller. The sandwich lease option course explains several very good techniques for keeping the house in good repair and holding the tenant-buyer responsible.

Most of my sandwich lease option deals are in Michigan. We have brutally cold winters here. There has been an occasion when a furnace broke during the coldest part of the winter and the tenant-buyer didn’t have the money to make the repair. You could be mean and tell the tenant-buyer to act like the homeowner they want to become by freezing and suffering until they can afford the repair. But you’re not mean and you do want to keep good relationships with the tenant-buyer.

There is a solution that keeps a good relationship and still holds the tenant-buyer responsible for the maintenance of the house. The first step is to talk to the tenant-buyer and be sure they have thoroughly considered all of their options. You may even be able to suggest a few options they have not yet considered.

If the tenant-buyer cannot come up with a solution, you and/or the seller may want to arrange to pay for the repair. I use the broken furnace during a cold Michigan winter example because this is a time when I would go ahead and make the repair.

But… I add the cost of the repair to the purchase price that the tenant-buyer will pay at closing.

I realize that sounds like a brutal example but when you think about it for a moment, it is a Win-Win. The tenant-buyer doesn’t have to suffer and they still get to buy the house. Still, you hold them responsible for the maintenance and aren’t stuck with the cost. Communication is still a powerful tool. Before you send out the maintenance company, you want to explain that you will help them out but the cost will be added to the purchase price. You never know, the tenant-buyer might suddenly find a way to make the repair themself so that you never have to pay for it.

The power of a good sandwich lease option process is that it gives you WIN-WIN-WIN solutions to even the most difficult situations!

What else do you need to learn about the sandwich lease option process? It’s all in the courses below:

1. Investing In Real Estate with Lease Options.
2. Advanced strategies for Buying and Selling with Lease Options.
3. Your Wealth Building Arsenal.
4. Add Personalized Coaching.
5. Cooperative Lease Options.
6. Expand to Get the Deed “Subject To.”
7. Round it all out by Working with Realtors.

By Wendy Patton

For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.

If you found this information useful, please visit again soon at wendypatton.com.

For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.

What did you think of this article? Please leave a comment below.

Working with Realtors^® is cooperative rather than competitive once you give this unconventional approach a little thought. This is such a powerful technique that the Lease Option Action and Achievement Plan that is part of every one of my courses recommends that you include it in your business plan the very first week.

Getting started is as easy as adding your business name to the Working with Realtors® Presentation that is provided – it’s as simple as cut, paste, and GO!

The main message that you and the presentation deliver about working with Realtors^® is the innovative approach and edge it gives Realtors^® to sell more of their listings. This unique and seldom thought of tactic is NOT competitive because it enables Realtors^® to sell listings that otherwise rarely sell.

Lease Option Investors are NOT Competitors with Realtors^®

When you begin working with Realtors^®, your first message is straightforward – you will deliver the buyers they need for difficult to sell houses. As a lease option investor, you provide Realtors^® an extension to their services that other Realtors^® cannot offer. The services you offer don’t apply to the majority of the Realtor’s^® listings. But the Realtor^® can decide at any time that your services are the right solution for a problem he/she has.

The Realtor® has control by deciding when to engage your services.

What you do is suggest that your lease option services are often a good fit when the Realtor^® has hard to sell listings because:

Listing Not Selling? For whatever reason, traditional buyers are not making offers. Houses languishing on the MLS for too many weeks send up a red flag to all buyers that something is not right with the house – even if there is nothing wrong. A fresh approach using a lease option will entice plenty of unconventional buyers.

Seller Needs Debt Relief? The seller needs cash right now. A traditional sale takes months to bring to the closing table where the seller pockets his/her money. A lease option can put money in the seller’s pocket in a day or two.

Seller Has No Equity? What the seller owes on the mortgage is very close to the market price. Because the seller’s listing price has to be very high to cover the Realtor’s^® commission, no serious offers are being submitted. Lease options have an answer to this situation.

Lease option buyers routinely make serious offers at the full asking price.

Seller Willing to Lease? Some sellers would rather have cash flow from the house rather than a big check from a sale. But they don’t want the hassles of being a landlord. A sandwich lease option can be the answer these sellers are looking for. This might be the situation with an inherited house or one that is in probate and can generate income for everyone until the estate is settled. There are many reasons a seller wants to lease for a while before selling the house.

Seller Doesn’t Need Any/All Cash Out? The taxes that will be owed are a common reason why a seller doesn’t want all of the cash at one time. Maybe it is a rental house that the landlord wants to sell before retiring from his/her day job. They don’t want all of the cash the same year when they will have a high salary and be paid for accumulated benefits when they retire. There are many reasons why a seller doesn’t want all of the cash at one time.

Home is Vacant? There are many times that a house is vacant and the seller is paying the mortgage for the vacant house and another one that they are living in. Maybe they transferred to another city. Or they unexpectedly had to move into a nursing home. Or there is a new marriage with two houses. Or the last tenant moved out of a rental and the seller no longer wants to be a landlord. All of these scenarios are about paying two mortgages that are financially killing them and they need to start generating income from the house by the end of this week or next week at the latest. A lease with an option to purchase can be the perfect answer for all of these problems and many more!

The listing side of the commission is paid to the Realtor^® as soon as you take control of the home. This is very important to share. All of the details are in the Working with Realtors^® course.

Pocket Buyers Can be Heroes by Working with Realtors^®

You can refer to your services as a “pocket buyer.” Realtors^® know what “pocket listings” are. These are exclusive listings a Realtor^® has that are not advertised on the open market. The seller has reasons why they only want the listing known to a few select buyers. The Realtor^® has exclusive discretion to reveal the listing only when appropriate. You being a “pocket buyer” is similar. The Realtor^® only calls on your services when it is appropriate for a specific seller.

I use the words “Lease Purchase” when working with Realtors^®. It sounds more like a guarantee than an option. After all, you are guaranteeing to pay the listing commission as soon as you take control of the property. Until you explain it, few Realtors^® are going to understand how low risk a lease purchase is for them. They have an unfounded fear that they will never see a penny or if they do, it will be in several years when the sale closes (maybe). Not True! Following my proven process, you, the Realtor^®, the seller, and the buyer all come away winners on day one! WIN-WIN-WIN-WIN!!!!

Certainly, there are also many other ways that lease options help Realtors^®. It saves them marketing expenses for a house that might never sell. It means a quicker sale rather than letting a hard to sell house languish on the market. It makes their client happy when they have a creative solution that other Realtors^® don’t have. Happy clients refer more business to the Realtor^®. The Realtor has more time to spend on other houses that are attractive to traditional buyers. When working with Realtors^®, the list of benefits goes on and on and on and…..

There is true value for both of you when the realtor gains you as a repeat client and you work with a Realtor^® who clearly understands how he/she will benefit from sandwich lease options.

Working with Realtors^® can be the most influential way to obtain access to an almost unlimited number of sellers with a need for sandwich lease options. But this is still only one of the many ways that lease options will make you wealthy:

1. Investing In Real Estate with Lease Options.
2. Advanced strategies for Buying and Selling with Lease Options.
3. Your Wealth Building Arsenal.
4. Add Personalized Coaching.
5. Cooperative Lease Options.
6. Expand to Get the Deed “Subject To.”
7. The time-proven method for Working with Realtors^®.

By Wendy Patton

For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.

If you found this information useful, please visit again soon at wendypatton.com.

For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.

What did you think of this article? Please leave a comment below.