Why You Should Use Lease Options in 2024

Why Explore Lease Options? 

 

Selling real estate with Lease Options has more upside than many investors or homeowners realize. And a lot less downside. The downside is better than being “just” a landlord… Here, I share my knowledge and information with homeowners exploring their selling options. Read more on different creative financing strategies to add to your toolkit here. 

The biggest benefit from selling with Lease Options is the ability to almost immediately begin bringing in an income from a property that is otherwise draining an owner financially. When you have a vacant home that you are making payments on, turning it into positive cash flow is a benefit. The new income can cover the mortgage payment and hopefully more to give you cash flow.  You will also collect a nonrefundable option fee from the tenant buyer in the beginning of the transaction (usually 3-5% of the sales price). And last, but not least, you will receive the difference between what you owe the seller and what the tenant buyer is paying you for the home (should be a good amount more). (Read more about getting started with Lease Options HERE.) 

Benefits When Selling Real Estate with Lease Options 

Done correctly, selling on a Lease Option brings you much better tenants. This is where several of the benefits are at when selling real estate with Lease Options. 

Tenantbuyers have skin in the game. This begins with the nonrefundable option fee. Tenant– Buyers understand if they become delinquent with the rent or fail to comply with other terms, they will be out the option fee. Traditional tenants only risk a small security deposit. 

Tenants are better qualified financially. People wanting to purchase a home are more motivated than average tenants. They don’t get into your house until they come up with the option fee. They have demonstrated the ability to manage and save money. You will want to do a credit and background check. Tenantbuyers should meet with a mortgage broker to understand the steps needed to qualify for a mortgage before the end of the option period. Overall, these are among the most financially sound tenants you can find. 

Tenant-buyers reduce your ownership costs. Few traditional landlords shift maintenance and repair costs to the tenant. However, this is common when selling real estate with Lease Options. Tenant-buyers can certainly be contractually responsible for yard care. And they can be responsible for other upkeep. Maybe it’s a fresh coat of paint, cleaning leaves out of the gutters in the fall, or repairing a fence that blows down in a windstorm. Typically, there will be a financial limit. The anticipation of ownership encourages them to take better care of the property. And you won’t be getting calls on Sunday morning to deal with a plugged toilet.  Normally you can build the repairs into the option agreement – not the rental agreement.  If a tenant (or tenant-buyer) needs a repair done you have to do it, however, there are ways to word the details in the option agreement to add those to the final purchase price, etc. (Read more on how to screen potential tenant-buyers HERE.) 

Deal Structure When Selling Real Estate with Lease Options 

Selling real estate with Lease Options is about creative financing. You are free to customize the agreement in almost any way that you want. I do believe in win-win agreements. You want to completely protect yourself and get top dollar for your house. Also, the agreement should positively motivate the buyer to complete the deal so that he/she gets their home and you get your money. Read more on different creative financing strategies to add to your toolkit here. 

**I encourage you to use three separate contracts. One is the lease/rental agreement, option agreement and sales contract/purchase agreement. Separate agreements protect you as the seller in case any repairs are outlined in the option agreement discussed above.  If you have to evict the tenant you can evict based on the rental agreement/lease.* 

Typically, the option fee goes towards the down payment (only when the purchase is completed and a lender knows how to apply it) and this fee should be documented in the option contract – not the lease agreement. If for any reason a lender will not allow the option fee to be applied as the down payment then you should reduce the purchase price by the same amount. That is the fair and ethical way to do it. (All downloadable forms, contracts and instructions are included in my full courses.) 

Almost everything else is negotiable. Usually, the purchase price is agreed to at the beginning of the option period. However, there are methods to establishing the price shortly before the sale closes. You also have a lot of flexibility when writing the maintenance/repair agreement (but in the option agreement not the lease/rental agreement). 

There needs to be a contract clause clearly explaining what happens if conditions of the lease agreement aren’t fully met. There also needs to wording describing what happens if the purchase isn’t completed before the option period expires. In a seller’s market, you want to be able to sell to another buyer. You may also want to be able to collect another fee to extend the option period. In a buyer’s market, you may prefer language enabling you to waive an additional option fee. What works best for both you and the tenant/buyer is what should go into the agreements. 

For many reasons, selling real estate with Lease Options is better than most sellers realize. When the tenant/buyer completes the purchase, the seller accomplishes the goal of selling the house and also earns rent from the beginning. In addition, Lease Option buyers are willing to pay top dollar due to their unique circumstances. The seller receives more money for the home. 

There are even more benefits to selling with Lease Options. Hopefully, you now understand why Lease Options are one of the safest and lowest entry point ways to invest in real estate.  

There will be details to work out. As soon as you have the conversation started, you’re going to want to have all of the tools that you’ll need in your toolbox: 

 

 

As always, I love to hear back from you on any questions or success stories that you have. Connect with me here: WendyPatton.com/Connect 

 

To Your Success, 

Wendy Patton 

How To Find Opportunities for Lease Options

The Best Time to Start Investing is TODAY!

The best time to invest in real estate was 20+ years ago. The second-best time is now. If you’re young and in your 20s or 30s or 40s, in 20 years you’ll be glad you invested today. Based on my decades of experience, I know how true this is. And I know that leases with an option to purchase are the best low-cost way to get started.

Another major advantage is that Lease Options are the least risky but highly profitable niche for investors getting started (short of being given a house). Although rent to own has been a popular way to invest in homes for many years, it’s still unfamiliar to many people. That’s why I continue to help people understand how this works. And why I often explain how to find rent to own aka Lease Option properties.

Finding these properties is different from finding traditionally financed sales. Almost always, the seller is motivated to immediately start generating cash flow and finalize a sale in the not-too-distant future. When you do find a Lease Option or RTO (rent to own) seller, you want to learn what that person’s motivation is before drawing up a Lease Option offer. When you know their motivation, you can more easily put together an enticing offer that is a win-win. (Read more on how to find motivated sellers HERE.)


How to Find Rent to Own/Lease Option Properties That Work for You

Today’s market is beginning to lean in favor of buyers. That’s an advantage for investors that know how to find rent to own aka Lease Option properties. As the sellers’ market slightly softens, there will be more sellers looking for a way to generate cash flow from a house that didn’t sell quickly. But that doesn’t mean the seller has given a single thought about a Lease Option arrangement. Very few will be advertising for this opportunity. (Read more about the terms of Lease Options HERE.)


What you need to do is find these sellers and help them understand why a rent to own or Lease Option is a good cash flow opportunity for them (assuming it is). 


Once you have their interest, then you can structure the deal/offer. After they are in contract then you can do a Sandwich Lease Option.  This is where you find a Tenant-Buyer and Lease Option the same property to them with different terms. By being in the middle, you create three distinct profit points for yourself (an option fee upfront from your tenant buyer, monthly cash flow and the profit on the property sales price when it closes).


You want to begin by talking to local real estate agents. Although agents don’t typically specialize in how to find rent to own aka Lease Option properties, you need agents who are most active in your local market, to know what you are looking for. Agents know sellers with a listing that hasn’t sold and the seller is getting anxious.  Usually the seller will say something to the Realtor like, “if my home doesn’t sell soon we might have to rent it”.   Agents also talk to each other often. Even if the two or three you talk with don’t have any leads for this strategy, they probably know other agents that have what you are looking for. (Read more on working with real estate agents HERE.)


Reluctant Landlords – How to Find Rent to Own Properties


While reluctant landlords are always worth pursuing for Lease Options, you’ll find even more of these as the sellers’ market softens. Reluctant landlords tend to be people who have already taken action to create cash flow from a vacant property. You offer to not only keep their rent cash flowing but to also the real possibility of selling the property. A double win for the reluctant landlord.


“For Rent” signs can be an even better opportunity for how to find rent to own properties. These can be either an experienced landlord with yet another vacant house they need to clean and find a new tenant for, or a want-to-be seller reluctantly getting into the landlord business.


Experienced landlords with vacancies have familiarity with both buying and renting real estate. They consider themselves to be professionals and will be open to creative types of real estate transactions. When the house is vacant, they also have motivation to sell creatively.


Key to how to find rent to own properties is about knowing the other person’s motivation and offering a creative solution that works for both you and the seller. What’s important is that you have a thorough understanding of what you are offering and can explain it in a way that both the new and the experienced landlord easily understands. (Read more about working with real estate investors HERE).


There are Many Ways for How to Find Rent to Own Properties


Another method for how to find rent to own properties is by searching for houses in your location of interest and simply asking the seller if they are interested in participating in a rent to own agreement. Again, be sure to have a solid pitch ready to go. Also, take the time to get to know the seller on a friendly basis. You’re likely going to have a relationship with him or her for a year or two.


These are only a few of the ways of how to find rent to own properties. Others include well-worded advertisements in local classified thrift newspapers, bandit signs, and of course craigslist. The Sandwich Lease Option is a great strategy to invest.   You first take control of the property with a contract. (these contracts can be found on my website also)  You then put a Tenant-Buyer in place that takes on most of the homeownership responsibilities until they make the purchase and take on full ownership. The Sandwich Lease Option lets you make a big profit for a small investment. Besides showing how to find rent to own properties, I’d enjoy showing you all of the other insider techniques I’ve developed over the years. Everything from effectively explaining the benefits to sellers to creatively writing deals that close. (Read more on other strategies HERE.)


Remember, the best time to invest in real estate was 20 years ago. The second-best time is now.


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. It’s because I have been very blessed with this strategy that I share the Sandwich Lease Option System with others.

Click here to read more about Lease Options and other ways to invest…


As always, I love to hear back from you on any questions or success stories that you have. Connect with me here: WendyPatton.com/Connect


To Your Success,

Wendy Patton


Lease Option Strategies for Success: Navigating the Current Market

Now is the time to take bold and calculated action… The real estate market has changed dramatically over the past decade. Today it’s relatively common for a home seller to encounter an investor (or at least know they are out there). As a result of this knowledge, sellers are more open to putting together creative deals.

As an investor, your advantage over other buyers is offering flexible purchase options to sellers.

What You Have to Offer to Sellers

Retail buyers offer sellers a long drawn-out process that starts with negotiating, moves on to inspections, followed by more negotiating (and possibly expensive repairs), followed by a long mortgage approval process that requires an appraisal, and sometimes even more negotiations. During this long grueling process, there is no guarantee that the sale will ever get to the closing table.

Through flexibility and creativity, you (as an investor) can put cash in the seller’s pocket as soon as tomorrow afternoon or next week. You can work with the sellers’ realtor or you can work directly with the seller. With a sandwich Lease Option, you can guarantee to make the seller’s mortgage payment that’s due next week.

Sandwich Lease Option investors are problem solvers!

There are always motivated sellers in the marketplace. Not all sellers will be motivated to sell on a Lease Option agreement, but there will always be more than you need if you know how to find them! Today, the real estate market is more open to creative solutions than ever before. This means more opportunities for investors.

All you need is a way to start the conversation….

Getting the Conversation Started

At the top of my website, you can get my Seller Scripts for free by filling out the form. This is key to getting started. Before you do anything else, you have to gain the seller’s interest in what you can do for them. Sometimes, sellers will call you looking for answers and sometimes you make calls on houses being advertised for sale. Right from the second you pick up the phone, you need a plan that engages the seller to learn what you can do for them.

Here is how you get started….

Before you make the call to a potential seller, look up information on the home in public records if you can. You should be able to see when the person purchased the house and how much they paid for it.  You can closely estimate what a potential seller’s monthly mortgage payments are and how much equity they have in the house. You’ll also know how much the property taxes are. You can look at comparable sales to know what the current market value is. With this information at your fingertips, you’re ready to make the call.

Investor: I’m calling about the house you have for sale. What can you tell me about it?

Then you let the seller talk. They’ll tell you things like it has 4 bedrooms, 1-1/2 baths, and 1,800 square feet. Hopefully, they tell you it’s in very good shape and has been recently renovated. If they don’t tell you about upgrades, you want to ask them if renovations have been made. You want to learn what renovations have been made and when. For sandwich Lease Options, you’re looking for nice white-picket-fence houses that are ready to move in. You don’t want the trouble and expense of a fixer-upper.

If the house interests you, you want to ask how much they are selling it for (even if the price is listed in the advertisement). From your research, you should know it’s worth it. In this example let us say it is $240,000 but they might be asking $250,000. This is where you begin to let them know that you are an investor.

Investor: Let me tell you a little about myself. I buy 3 or 4 houses each month (if you do). Some of those I buy for cash to flip but those need to be deeply discounted. Those houses are usually foreclosures, short sales, or owned by the bank. Can you tell me if you can take something less?

Note: “Let me tell you a little about myself” is an important transition to begin letting them know you are an investor.

Seller: I can probably go as low as $240,000.

Investor: Is that as low as you can go?

Sometimes you have to be comfortable with silence during the conversation. At this point, you want to wait for the seller to make you a lower offer.

Seller: I can’t go any lower than $237,000.

Investor: I can probably pay more if you sell on contract. Would you be willing to take monthly equity payments until I cash you out?

Seller: I’m not sure I understand. Can you explain that?”

“Would you be willing to take monthly equity payments until I cash you out?”

Offering equity payments is a major shift in the conversation. You want the seller to ask you to explain what you are offering. This allows you to tell them about flexible options and to learn more about what is motivating them to sell the house.

Moving the Conversation and the Deal Forward

Next, repeat your equity payments offer with some clarification and begin expanding on the benefits.

Investor: Will you allow me to make your monthly payment and take care of all the maintenance until I cash you out? Especially if I can get you more money for your house?

Seller: I’d like to hear more so that I can consider that.

Investor: Can I come to look at the house to make sure that I’m interested in it? We can talk more about what I can offer you at that time. When would be a good time for you?

Seller: Sometime tomorrow works for me.

Investor: What time tomorrow? Morning, noon, or evening? One other question, are you the only owner? (You want anyone with a vested interest to be at the meeting when you explain what you are offering.)

Seller: Tomorrow at 7:00 in the evening would be good.

Investor: We’ll meet at 7:00.

***end of conversation***

Can you do that?

Can you make 10 phone calls until you have a $40,000 profitable deal?

Can you do that again and again until you are making $100,000 or more every year?

There will be details to work out. As soon as you have the conversation started, you’re going to want to have all of the tools that you’ll need in your toolbox:

  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.

Click here to read more about Lease Options and other ways to invest…


As always, I love to hear back from you on any questions or success stories that you have. Connect with me here: WendyPatton.com/Connect


To Your Success,

Wendy Patton

Syndication Investing: A Great Passive Investment Strategy

Are you looking for a way to diversify your investment portfolio and to earn passive income? Syndication investing in real estate might be the perfect strategy for you. In this blog post, I will explore the definition of syndication investing, its importance and benefits, how it works, advantages, risks and considerations and tips for success to encourage you to explore this investment strategy further.


Firstly, let’s define syndication investing in real estate. Syndication investing involves pooling funds from multiple investors to collectively invest in real estate projects. This allows individual investors to access larger and more lucrative deals that they may not be able to pursue on their own. Syndication deals are typically led by experienced real estate professionals known as syndicators or sponsors, who handle the day-to-day operations and management of the investment.  They get paid the bigger portion of the deal for finding, managing and overseeing it. Click here to sign up to be notified of the next Syndication Opportunity available.


So why is syndication investing important and beneficial?


One of the key advantages is diversification. By investing in multiple properties or projects through syndication, you spread your risk across different assets and markets. This can help protect your investment from the volatility of a single property or market. Additionally, syndication investing provides an opportunity to earn passive income and potentially achieve higher returns compared to traditional investment avenues.


Now, let’s delve into how syndication investing works. The syndication process begins with the syndicator identifying a real estate opportunity, such as a commercial property or a multi-family residential complex. They then create a legal entity, such as a limited liability company (LLC), to hold the investment. Next, the syndicator presents the opportunity to potential investors, who contribute their funds to the entity in exchange for ownership shares or units. The syndicator manages the investment, handles property management, and distributes profits to the investors.


When considering syndication investing, it’s important to understand the advantages it offers. As mentioned earlier, syndication allows you to access larger real estate deals that may be out of reach for individual investors. This can lead to higher potential returns on your investment. Additionally, syndication provides an opportunity for passive income, as the syndicator takes care of the day-to-day operations and management of the investment. This allows you to focus on other aspects of your life while still earning income from your investment.


However, it’s crucial to be aware of the risks and considerations associated with syndication investing. Like any investment, there are potential risks involved. These can include market fluctuations, property-specific risks, and the performance of the syndicator. Before investing, it’s important to conduct thorough due diligence and research on the syndicator, the investment opportunity, and the real estate market. Understanding the legal and financial aspects of syndication deals is also essential to protect your investment.


To ensure successful syndication investing, here are some tips to keep in mind. Firstly, find reputable syndicators with a proven track record of successful investments. Research their past projects, performance, and reputation in the industry. Secondly, evaluate investment opportunities carefully and analyze potential returns. Consider factors such as location, market trends, property condition, and projected cash flow. Lastly, build a network of like-minded investors and stay informed about the real estate market. Attend industry events, join online communities, and seek advice from experienced investors to expand your knowledge and opportunities.


Click here to sign up to be notified of the next Syndication Opportunity available.


Looking for other ways to diversify your income? Click here to read on other topics!


As always, I love to hear back from you on any questions or success stories that you have. Connect with me here: WendyPatton.com/Connect


To Your Success,

Wendy Patton


Subject-To Deals: The Best Time to Start

If you’re an investor looking for creative ways to acquire property with minimal investment, I highly recommend studying Subject-To deals. Now is the perfect time to start exploring this financing method that allows you to take over the existing loan on a mortgage without putting your name on the mortgage.


What better time could there be then RIGHT NOW to take over mortgages. There are tons of mortgages that are between 2.5-4%.   Imagine the low monthly payments compared to current rates!  These should be a key strategy right now for investors!


Some people mistakenly believe that Subject-To deals are illegal due to the “due on sale” clause found in most mortgage contracts since the 1970s or 1980s. However, this is a contractual issue, not a legal one. While the loan holder could enforce this clause, they would have to incur their own legal costs to do so. (See my Subject-To contracts in my course HERE) Subject-To deals are a form of owner financing, where the investor takes over the seller’s existing loan instead of applying for a new one. This saves time, money, and the hassle of qualifying for a new mortgage. By adhering to the terms of the original loan contract, investors can take ownership of the property without putting up much of their own money.


There are several things to consider when you structure Subject-To deals. The main one involves making monthly payments directly to the lender using the original loan account number, mailing address, and due date. As long as the payments are made on time, the lender is less likely to call the note due using the “due on sale” clause.  Also, the insurance policy needs to name the previous owners (with the exact same names as was on the loan) as additional insured.  The lender must also show on the insurance policy as the lender.


Investing in Subject-To deals offers several advantages. Firstly, it allows you to take ownership of a property without significant upfront costs. Additionally, you avoid the time-consuming and expensive process of obtaining a new mortgage. By taking over an existing loan, you eliminate loan fees and other costs associated with a new mortgage. Read more on Getting Properties with “Subject-To” Financing HERE.


There are reasons why lenders are unlikely to call the loan due as long as it remains current and your insurance is done correctly. Legal costs and government scrutiny of nonperforming loans discourage lenders from taking back properties. 


If you’re looking for creative and low-cost investment techniques, Subject-To deals are worth exploring. The real estate investment market offers ample opportunities for profitable deals, and I share my knowledge and success with others to help them attain financial freedom.


Now is the best time to start studying Subject-To deals and take advantage of the benefits they offer in the real estate investment market. Get started with my Subject-To course HERE!


Watch my full Subject-To Presentation for FREE here!


As always, I’d love to hear your questions or success stories. Connect with me here: WendyPatton.com/Connect


To Your Success,

Wendy Patton


The Role of AI in Streamlining Lease Options and Subject-Tos

In this blog post, I will explore the role of AI in streamlining Lease Options and Subject-To deals. We’ll discuss the importance of streamlining these processes for investors and real estate agents, and how AI can play a crucial role in making these transactions more efficient and effective.

To start off, let’s provide a brief explanation of Lease Options and Subject-To deals in real estate investing. Lease Options allow potential buyers to lease a property with the option to purchase it at a later date, while Subject-To deals involve taking over the existing mortgage payments of a property without formally assuming the loan. These strategies offer flexibility and opportunities for both buyers and sellers in the real estate market. 

Read more about Lease Options here:The Rise of Lease Options: A Win-Win Solution

Read more about Subject-To deals here: What is a Subject-To?

Streamlining Lease Options and Subject-To deals is crucial for investors and real estate agents. By reducing the time and effort required to complete these transactions, investors can maximize their profits and minimize risks. Real estate agents can also benefit from streamlined processes as it allows them to serve their clients more efficiently and effectively. AI can play a significant role in streamlining Lease Options and Subject-To deals. Through advanced algorithms and machine learning, AI can automate various tasks such as property valuation, market analysis, and contract generation. This not only saves time but also ensures accuracy and consistency in the process. Plus – no tech experience required!

The effectiveness of AI in streamlining Lease Options and Subject-To deals has been proven through real-life case studies. For example, AI-powered platforms have successfully helped investors and agents identify profitable Lease Options and Subject-To deals, resulting in increased profits and successful transactions. These success stories highlight the potential of AI in transforming the real estate industry.


While AI can greatly enhance the process of Lease Options and Subject-To deals, it is important to strike a balance between automation and human expertise. While AI will do most of the work for you, it is crucial to have human oversight, data validation, and continuous learning. AI should be seen as a tool to augment human expertise and judgment, rather than replace it entirely. You will still need to have basic knowledge and understanding of the topics. To get all of the forms, contracts, step-by-step video instructions and more, visit my store here.


In conclusion, AI can play a crucial role in streamlining Lease Options and Subject-To deals in real estate investing. By automating tasks, improving accuracy, and enhancing efficiency, AI can help investors and agents maximize their profits and minimize risks. However, it is important to remember that human expertise and judgment are still essential in ensuring successful transactions. By striking the right balance between AI automation and human involvement, the future of incredible Lease Options and Subject-To deals looks promising.

As always, I love to hear back from you on your questions! Do you have a topic you’d like for me to discuss? Connect with me here: WendyPatton.com/Connect

To Your Success,

Wendy Patton


Screening and Qualifying Tenant-Buyers for Lease Option Deals: Ensuring a Successful Partnership

Lease Options have become even more relevant and attractive than ever before. This is because they offer a way for investors and renters to navigate the uncertainties of the real estate market and find mutually beneficial solutions. To read more about how Lease Options benefit Investors and Renters, go to my previous blog: The Rise of Lease Options: A Win-Win Solution for Investors and Renters

Thoroughly screening potential Tenant-Buyers is crucial in Lease Option deals as it helps minimize risks and ensures a mutually beneficial agreement. 

By asking just a few questions, you can make more informed decisions and select Tenant-Buyers who are more likely to fulfill their obligations and maintain the property in good condition. This screening process increases the chances of a successful and profitable lease option deal for both parties involved. Get my full Script to Qualify Buyers in my course here!


You are asking these questions to find out more about them.  Example are they renting now or do they live with mom and dad?  You are also qualifying that they are calling on your lease option property vs a Section 8 rental.  

Getting the Tenant-Buyers’ Financial Picture:

The best way to screen a potential Tenant-Buyer is over the phone or in person. A simple conversation can give you all the information needed to see whether or not it is a win-win situation.

The first question to ask is “What price range would you like to keep your rent in?”

Their answer will give you their budget for rent as well as their monthly income. For example, if they reply “$1,800” then the income needed would be $5,400-$7,200/month (based on the standard requirement of 3-4 times the rent). You can confirm this before moving forward.

Next, you will want to ask what their budget is for what they can put down (this is really the Option Fee however they won’t know that terminology).  To find out what they can put down, I just ask the question.  How much are you working with to put down on a home?  (notice I did not call it a down payment). Once you have their financial picture, you will need to find out their timeline and what they are looking for. (Read my last blog to read about another option – Getting Properties with “Subject-To” Financing)

Does the Financial Picture Fit?

You will now have to see if the financial picture fits what they are looking for. You can do this by asking them:

  • “What area have you been looking in?”

  • “What specifics are you looking for in a home? Bedrooms? Garage?”

  • “What is your goal date to move-in?”

These few questions will immediately let you know whether or not they will qualify for what they are looking for. If they do not qualify, don’t delete their contact information! Instead, let them know what would be needed and set a date together to follow up.

Now if they do qualify, let’s talk about the importance of thorough screening. You want to make sure that your Tenant-Buyers are financially capable of fulfilling the lease option agreement. Consider evaluating potential Tenant-Buyers based on criteria such as income stability, credit history, and references. This will help you determine their suitability and minimize any risks.


  • Assessing Tenant-Buyers’ rental history and references

  • Verifying Tenant-Buyers’ employment and income

  • Conducting background and credit checks

  • Setting clear criteria and standards for Tenant-Buyers

In conclusion, screening and qualifying tenant-buyers for Lease Option deals is essential for ensuring a successful partnership. By asking a few key questions and obtaining their financial picture, you can determine if they are a good fit for the agreement. By setting clear criteria and standards for Tenant-Buyers, you can increase the chances of a profitable and mutually beneficial lease option deal.

Read about finding Tenant-Buyers on my previous blog, here: Marketing Lease Options to Tenant-Buyers

My Lease Option courses have everything you need to qualify Tenant-Buyers HERE.

As always, I’d love to connect with you and hear about your journey to financial freedom. Connect with me here: WendyPatton.com/Connect

To Your Success,

Wendy Patton


Getting Properties with “Subject-To” Financing

Welcome to the world of “Subject-To” Real Estate Investing! In this blog post, we will explore the concept of acquiring properties with little or no money down by buying them “Subject-To” the existing financing. At the end of this blog, you can watch my FULL Subject-To presentation. 🙂


“Subject-To” real estate acquisition involves purchasing properties that already have an underlying mortgage in place. While there is a transfer of ownership at closing, the mortgage remains unchanged. As an investor, you can take advantage of the existing financing, which is often the best option available for a property.


You might be wondering why a seller would sell a property but still keep the mortgage in their name


The answer is simple – they need to get rid of the property. As an investor your role is to relieve them of this “major headache” for whatever reason they have.  We are there to solve a problem for the seller. 


However, it’s important to note that the seller must be motivated because the mortgage will still be on their credit report until it’s paid off. This means that you may not pay off the loan for years. 


You have various options for dealing with the property, such as:

  • Leasing it

  • Assigning it.   (NO do not do this with a Subject To – otherwise the seller is not really protected by that new buyer)

  • Lease Optioning it to a Tenant-Buyer

  • Selling it outright

  • Move into it


The seller trusts that you will make their payments and protect their credit, which is crucial for maintaining ethical and legal practices in this business.


To help you navigate the process of acquiring properties “Subject-To” the existing financing, my course provides all the necessary forms/contracts along with audio/video instructions. However, it’s advisable to consult an experienced local real estate attorney to make these documents state-specific for you.


If you’re new to the concept of Subject-To deals, I recommend reading or listening to my book, “Investing in Real Estate with Lease Options and Subject-To Deals.” This comprehensive resource will provide you with a thorough understanding of Subject-To real estate investing and help you determine which forms to use and when.


Given the increasing number of foreclosures and the growing importance of credit scores, people are becoming more aware of how crucial their credit scoring is. As an ethical real estate investor and problem solver, you have the opportunity to be the “Knight in Shining Armor” who relieves their headaches and saves their credit. So go out there and find some low-interest rate or already paid-down mortgages!


Happy investing!

To Your Success,

Wendy Patton

Watch My FULL Subject-To Presentation Below!