Subject-To deals, short for “subject to existing financing,” involve the buyer taking over the existing mortgage payments on a property without formally assuming the loan. In this scenario, the buyer gains control of the property via a deed while the seller’s mortgage remains in place. This is one of the best real estate investment strategies that is particularly useful when the seller is facing financial challenges or needs to sell quickly.

This allows you to help the seller to get out from under their home!

For real estate agents, this is not a good strategy to offer to your sellers. This strategy leaves the seller at future financial risk for the mortgage, so I would not recommend it for that. If your seller is having trouble selling their home traditionally, you can consider Sandwich Lease Options. (Read more here: How to Approach Sellers With a Sandwich Lease Option (Offering Solutions that Sellers Need)

For those ready to learn more on Subject-Tos… Start with my book: Investing in Real Estate with Lease Options and Subject Tos (2023 edition). When you are ready to do deals and learn more on this topic, check out my course Get the Deed: Subject-To course gives you everything you need to get started! My course comes with video, audio and booklet training including step-by-step instructions for all forms and contracts needed.

Utilizing Subject-To Deals:
As an investor, buyer, or seller, understanding when and how to use Subject-To deals can be a game-changer. Here are some key scenarios where these strategies can be advantageous:
– When the seller is motivated to sell quickly.
– When the property has an existing mortgage with favorable terms.
– When you want to avoid the costs and time associated with obtaining a new loan.
– See more examples on when to use Subject-To at my previous blog here: How And When To Use “Subject To Deals”

Subject-To deals offer experienced investors in the United States unique opportunities to navigate the real estate market. By leveraging these creative financing tools, investors can gain flexibility, control, and potentially lucrative deals. However, it is crucial to educate yourself thoroughly on the intricacies of these strategies before diving in. Understanding the legal and financial implications is essential to ensure a successful outcome.

Remember, knowledge is power in the world of real estate investing, and Subject-Tos are a fantastic tool to have in your toolkit. Open the door to real estate investment opportunities by investing in your education on them first.

To Your Success,
Wendy Patton

In the world of real estate investing, Lease Options have been one of the most powerful tools for investors, real estate agents, buyers and sellers…

These creative financing strategies offer unique opportunities to navigate the complexities of the market. In this post, I will delve into the fundamentals of Lease Options, exploring the benefits and how they can be effectively utilized.

Understanding Lease Options:
A Lease Option, also known as a lease purchase or rent-to-own agreement, is a contractual arrangement that allows a potential buyer to lease a property with the option to purchase it at a predetermined price within a specified timeframe. This arrangement provides flexibility for both parties involved, as it allows the buyer to test the property before committing to a purchase, while giving the seller a buyer so they can exit from the property.
The benefit of Lease Options for investors and real estate agents is that they can create more opportunities for their clients and themselves. Understanding Lease Options in the real estate market is crucial for maximizing profits.

Utilizing Lease Options:
As an investor, buyer, or seller, understanding when and how to use Lease Options can be a game-changer. Lease Options open up more doors vs. traditional real estate deals. Here are some key scenarios where these strategies can be advantageous:
– When you want to test a property before committing to a purchase.
– When you have limited funds for a down payment.
– When you want to secure a property in a competitive market.

For those ready to learn more on Lease Options… I cover Buying and Selling with Lease Options in my video, audio and booklet training including step-by-step instruction for all forms, contracts in my Sandwich Lease Options course. My courses have all been updated this year with my current techniques and tips for success with Lease Options. You can also learn more on my Blog Archive and YouTube for free!

Lease Options offer experienced investors unique opportunities to navigate the real estate market. By leveraging these creative financing tools, investors can gain flexibility, control, and potentially lucrative deals. However, it is crucial to educate yourself thoroughly on the intricacies of these strategies before diving in. Understanding the legal and financial implications is essential to ensure a successful outcome.

Remember, knowledge is power in the world of real estate investing, and Lease Options can be powerful tools in your arsenal. So, take the time to educate yourself, seek guidance from experienced professionals, and embark on your journey towards financial success.

To Your Success,
Wendy Patton

I want to make sure that you are ready for the change in the economy that is happening.

This is the time to protect and grow your wealth…

Watch my video below:

The New Year begins with everything you need to close your first lease option deal in the next 30 days! Nothing gets you off to a faster start than cooperative lease options! And your big bonus is that it leads directly into sustainable full sandwich lease options that pay you for years to come!

Using time-proven and standardized contracts and forms let you insert your information once to reuse it deal after deal.

Your Cooperative Lease Option Timeline (Checklist)

Make 2% to 5% on cooperative lease options. On a $250,000 house, that comes to between $5,000 and $12,500. Of course, on a $325,000 house, the numbers are much bigger. Opportunities are waiting for you.

There are three primary goals when flipping these cooperative lease options.

1. Simply flipping deals quickly for fast cash!
2. Making quick cash on deals that don’t have enough equity for you to stay in long term.
3. Other deals you don’t want to stay in (when you’re too busy with bigger sandwich lease options).

For every cooperative lease option, especially when getting started, the most important form to closely follow is the checklist. This is how you walk step-by-step through the easy to follow process to be sure you don’t miss anything. The checklist is also a valuable tool even after you have plenty of experience with sandwich lease options. While you focus your attention on more profitable deals, you can have an assistant work on the cooperative lease options by following the checklist.

Even if you are not yet working with an assistant, but are busy with other deals, the checklist keeps you on track to collect a fast and simple bonus paycheck from a cooperative lease option.

In real estate, “Time is of the Essence.”

Cooperative Lease Options Lead to Sandwich Lease Options

With a cooperative lease option, you are in and out of the deal very fast. You don’t babysit the tenant-buyer. You don’t have to spruce up the property. You don’t collect rent checks from tenants and write checks to the seller. You don’t have to make sure they maintain the property. You don’t have to check in with the tenant-buyer to be sure they are making progress toward obtaining a loan to finalize the purchase.

Cooperative lease options eliminate most of your responsibilities but still deliver a healthy payday!

As you’ve probably read in my previous blogs, the cooperative lease option is the 1-payday technique that gets you started toward the 3-paydays that come with sandwich lease options. With the cooperative lease, you collect a healthy fee (4-figures or more) by flipping the option to a tenant-buyer that works directly with the seller through the remainder of the lease option process.

You don’t have to work the back end of the deal with the tenant-buyer. But as soon as you master the front end of the process, you are ready to move on to full sandwich lease option deals that have all 3-paydays!

Cooperative Lease Options for the Option Fee

There are other versions of the cooperative lease option such as wholesaling to another investor. However, this version of the Cooperative Lease Option works well when the seller doesn’t leave much meat on the bone for you or another investor to stay in a sandwich lease option for a year or two. Sorry to say but this could also be a time when the seller is being greedy. More likely, the seller just doesn’t have enough equity in the house to afford to share with you in exchange for your knowledge and expertise. But greed is greed, and you should always be very cautious when working with a seller motivated by greed. What this is about is how you can structure a deal when the seller needs to sell a house but just doesn’t own enough equity to be able to share.

Cooperative lease options are about finding a buyer that wants a lease option and connecting him or her with a seller wanting the same thing. You are the middleman flipping the lease option directly to the tenant-buyer for a fee. An example of a seller without enough equity to share is when the seller’s mortgage balance is equal to the sales value of the house. For some reason (divorce, job relocation, illness, etc.) they need to sell the house but will be stretched to pay off the mortgage at the current value of the home. This is a time the seller is motivated to make a creative sale because they probably can’t afford to pay a Realtor^® commission either.

That means the seller welcomes having a tenant-buyer generate rental income that is higher than the mortgage payments until the tenant-buyer qualifies to complete the purchase (the seller gets some extra income until the deal closes). The tenant-buyer is also willing to pay top dollar for the house, which helps the seller pay off the high mortgage and also puts some money in his/her pocket.

This is a win-win-win for the seller, you as the investor, and for the buyer.

What you are doing in a cooperative lease option is bringing the seller and tenant-buyer together for a lease option and you collect an option fee from the tenant-buyer but then you step out of the deal. The seller and buyer complete the sale before the end of the option period.

How to Structure Cooperative Lease Options

This might seem more complicated than it is. It’s really remarkably simple. This is nothing more than a creative solution that most people never think about. First, you use one of the many methods I share to find a seller in a bit of a pickle that needs some help with this type of creative selling.

Then you explain, in a general way, how a lease with an option to purchase works. What’s important here is that you do gain some control over the property. You do this by signing a purchase option agreement between you and the seller for some “consideration.” When it comes to a cooperative lease option, you want the option fee you pay the seller to be very small. Maybe as small as between $1 and $10. This is important because your profit comes from the much higher option fee that you collect from the tenant-buyer. If you pay too much to the seller, the tenant-buyer fee will only be reimbursing you rather than earning you a decent fee in exchange for your work and knowledge of how to put the deal together.

The purchase price you have under contract in a cooperative lease option is the same price you offer the tenant-buyer. What you want from the tenant-buyer is the full “traditional” option fee. A traditional option fee is between 2% and 5% of the purchase price. At 3% on a $300,000 purchase price, the option fee you collect is $9,000. Once you collect the traditional option fee, you “flip” the purchase option agreement (you paid $1) to the tenant-buyer.

After collecting your full option fee, you step out of the deal.

Time is of the essence! Get started today with cooperative lease options to quickly advance your real estate career in the New Year!

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

To Your Success,

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.

Sandwich lease options are successful for many reasons. You control the property without owning it. Profits are very healthy with 3 income streams. It’s
easy to get out of if everyone isn’t happy. And unlike most real estate investments, you can have as many sandwich lease options in progress at the
same time as you want.

Sandwich lease options are also easy to put together as long as
you have a process that pays attention to the details.

The nuts and bolts along with tips for success are what follow…

Sandwich Lease Option Nuts and Bolts

A sandwich lease option happens when an investor leases a property from an owner (seller) and then subleases it to a tenant-buyer. The purpose of the sandwich lease option is for the tenant-buyer to complete the purchase at a future date that is typically 12 to 18 months in the future. The investor has a separate contract with the seller and another with the tenant-buyer. The fact that the investor is in the middle of the two contracts is the reason it is called a sandwich lease option.

The first contract basics with the seller include the monthly rent, any upfront costs, the purchase option fee the investor pays the seller, the purchase cost, and terms. The terms are where most of the details come into play. Details like how long the option period is and who is responsible for maintenance.

The second contract of a sandwich lease option is between the investor and the tenant-buyer. It has many of the same basics such as monthly rent, upfront costs, the purchase option fee the tenant-buyer pays the investor, the purchase cost, and terms. This is where the investor builds in his or her 3 profit points that include the purchase option fee, the monthly rent spread, and the final purchase price.

Writing the two contracts correctly is key to a successful sandwich lease option.

More Tips for a Successful Sandwich Lease Option

Follow these and other tips in the course materials to make your sandwich lease options go off without any major issues and so that you (as the investor)
achieve the most security, income, and fairness for everyone involved.

Tip #1. Qualify the seller. This is a tip that you aren’t likely to find anywhere else. Most investors focus on qualifying the tenant-buyer as being able to
qualify for a mortgage to buy the home in a reasonable amount of time. Before you get to that point, you need to first qualify the seller. You need to verify
information like the seller’s equity in the home, their house mortgage payment, and make sure there are no liens on the property other than the
mortgage. You use the mortgage payment information to be sure there is enough spread for you to earn a profit on the monthly rent. You use the equity
to determine that the final purchase price leaves profit for you after the mortgage is paid in full.

Tip #1 is critical to a successful sandwich lease option.

Tip #2. Keep the seller in the loop. Sandwich lease option investors must be honest and upfront. A few investors think they can get more sellers under
contract if they don’t tell them what they are doing. A common bad move is to imply to the seller that you’ll be living in the house rather than being upfront
that you’ll be leasing it to a tenant-buyer. This can blow up on a deceitful investor for many reasons. It might be as simple as the seller showing up at the
front door the day the tenant-buyer is moving in to see how things are going. It will almost always happen long before you get to the closing table or at the
closing table after you have had the deal in place for a year. Deceit will give the seller legal reasons to break the deal with you and you will no longer be
able to complete your deal with the tenant-buyer. Be upfront and honest from the beginning to make everyone comfortable with the arrangement. Your job
as the investor in the sandwich lease option is to solve problems and make the process smooth, so do that!

Tip #3. Have your contract with the seller longer than with the tenant-buyer. This should be intuitive. If your contract with the seller is shorter than
with the tenant-buyer, they could wait for the first contract to expire and cut you out of the deal.

Tip #4. Screen the tenant-buyer. Failing to perform due diligence on the tenant-buyer will put you at the highest risk of the deal not being completed
because the tenant-buyer cannot qualify for a mortgage in a reasonable amount of time. If you don’t screen properly, your problems could start as soon
as they fail to pay the second month’s rent, or you find they are not taking proper care of the home. The Sandwich Lease Options course goes into deep
detail about this subject but among the most essential are:

– Run a background check. It should include evictions, criminal activities, and employment.

– Run a credit check. You need to establish what credit score you will accept and more. The tenant-buyer does not need an 820 credit score but it should not
be so low that it will take five years to qualify for a mortgage. You want to go through the details of the report. A few late pays two years ago are probably
going to be fine. A bankruptcy six months ago is not going to get fixed any time soon.

– Determine their stability for both employment and where they have been living. You need some verifiable income information to assure they will be able to correct their credit problem and qualify for a mortgage. You also need to know they have stable employment rather than changing jobs every six or eight
months. Being stable enough to complete a sandwich lease option deal also means they have a history of living in one place for more than six months or a
year.

– Don’t discriminate. This is for your protection as well as being fair to all applicants. Not following fair housing laws could get you fined or in other
trouble with the law. Know your local and federal discrimination laws and adhere to them.

Tip #4 is critical to a successful sandwich lease option.

Tip #5. Arrange to pay the seller’s mortgage. Failing to do this risks that you send the owner a payment each month only to later learn the bank is
foreclosing on the property because the owner decided to pocket the money rather than pass it on to the bank. There are several ways you can arrange to
stay on top of the mortgage payments.

Tip #6. Legally record your option contract with the seller at the appropriate county administrative department. This puts a “cloud” on the title. The owner will not be able to sell the property until it’s cleared. Otherwise, the owner might decide to sell to another buyer. Your only recourse would be to enforce
your contract with the owner by filing an expensive and stressful lawsuit.

Treat your sandwich lease options as a chance to create a Win-
Win-Win for everyone. Your reward is 3 paydays — Now from the
option fee, Overtime from the rent spread, and Later from the purchase price!

You can start writing your sandwich lease option success
story right NOW!

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

To Your Success,

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.

When you want to control property without owning it, how to become a landlord is the first step in working with millennials through the sandwich lease option process. When you read about millennial statistics in the real estate market, be sure you read them carefully. The headline statistic says millennials make up about 33% of the market but an incredible 66% of the first-time buyers’ market. The first-time buyers’ market is what you are targeting with sandwich lease options.

A generational shift has happened. Millennials now dominate home purchases.

What Millennials Want is What Counts

Millennials are now at the top of the food chain when it comes to home purchase demographics. What’s important about how to become a landlord is meeting the current needs and expectations of the millennial generation.

Not only are millennials the next generation to define a new lifestyle and economy, they have the numbers to make it happen. According to the Pew Research Center (along with government and other reliable sources), 2019 is the year that millennials officially outnumbered Baby Boomers. The number of millennials exceeds 73 million while the number of Baby Boomers has declined to 72 million from its peak of 79 million. Yes, the Baby Boomers are dying off and living in assisted care homes.

While Baby Boomers are redefining our health care system and retirement care, the millennials are redefining everything else. When it comes to suburbia, this means turning it into a version of the city core where many forecasters thought millennials were destined to remain throughout their lives. Today, millennials are split between the city and suburbia, but the trend is definitely towards more baby strollers being pushed past green private lawns than in city parks. Whether it is suburbia or the city, sandwich lease investors provide tremendous opportunities to help millennials find the homes that they want.

Millennials are prime candidates for sandwich lease options!

Millennials Come of Age and Need Sandwich Lease Options

To say the least, the millennial generation has had a tough time reaching the age of homeownership. It’s been one financial hardship upon another financial hardship their entire life. Anyone born between 1981 and 1996 (ages 26 to 41 in 2022) is considered a millennial. As you begin understanding how they will benefit from a sandwich lease option, be aware of the major financial events that have defined their lifetimes.

The stock market crash of 2000 (aka dot-com bubble) happened when the youngest were just born and the oldest were about 20. The NASDAQ rose five-fold between 1995 and 2000 before losing almost 77% of its value. The result was a loss of billions of dollars (most was their parents’ money). But it took 15 years for the NASDAQ to recover, which was during prime time for millennials.

The financial collapse of 2008 (aka the Great Recession) happened in the meantime. This is of concern to real estate investors because the bottom fell out of the mortgage market and foreclosures hit all-time highs. millennials remember these times well because becoming a homeowner was out of the question for many years.

Student loan debt is still part of the financial equation for millennials looking to become homeowners today. This affects credit ratings and saving for a down payment. This is an important consideration when deciding how to become a landlord using sandwich lease options. Understanding student debt needs to be part of your evaluation of credit reports.

Retirement pensions became a thing of history. Financial security no longer includes a retirement pension. Millennials must rely on 401k accounts that are only partially funded by employers. But as 401k accounts grow in value, they are also a source for funding homeownership for millennials.

It all means that sandwich lease options are very helpful to millennials when a professional investor can give them a helping hand — even if they have financial and credit challenges. How to become a landlord to millennials means taking all of this into consideration. You gain an even bigger advantage by knowing where and how millennials want to buy their first home.

Millennials want homes and communities that are sustainable.

How to Become a Landlord is About the New Suburban City Center

Real estate investors should revisit the formula that revived city cores a few decades ago to attract the once younger millennial crowd. It’s a simple formula about living and working in the same city neighborhood. It’s a combination of affordability and creativity. For living units, it’s a combination of owned single-family homes and condos. The neighborhoods are diverse with small niche businesses and amenities.

The entertainment venues are next to offices and retail shops. Activity centers are small parks with open spaces for sports alongside passive spaces for reading, texting, socializing, and working outside of the office. There may even be elements of a 24/7 city with always-open pubs, restaurants, and coffee houses. The city life formula for millennials is a live, work, and walk the neighborhood. Sandwich lease options work great in these neighborhoods where young professionals are ready to settle down.

Millennials have rediscovered suburbia.

Why Sandwich Lease Options Work So Well With Millennials

After years and years of this seller’s market, there are fewer and fewer houses available for sale in suburbia. However, millennials with families have taken a liking to suburbia. Still, they prefer as many city amenities as possible. Walkability and neighborhood parks are big attractions as are smaller niche businesses (pubs, restaurants, and coffee houses).

This is very much about the millennial generation… the most active demographic in today’s real estate market. Millennials (73 million of them) now outnumber baby boomers and the millennials are much more active in the real estate market than baby boomers who are mostly in retirement.

The few houses available for sale are attracting the most qualified buyers. These are millennial buyers who are already prequalified for a mortgage. But there is a much larger pool of millennials who would be buyers if they get a little help qualifying for a mortgage. Buyers who are eager to pay top dollar if someone will give them a chance.

Sandwich lease options are all about helping these people qualify for a mortgage. These are the same people that house flippers are ignoring. And landlords raise the rent every year, which further motivates these people to want to buy a home. Offering millennials exactly what they want is the niche that you fill with rent to own properties.

Millions of millennials want to be served by the sandwich lease option niche but very few investors are filling the need….

Lease to Own is a Perfect Fit for the Millennial Niche

Today there are tens of millions of millennials living in city apartments where rents are increasing faster than homeowner equity. They have good jobs but very little savings and haven’t qualified for a mortgage. They no longer want to pay high rents to landlords without the possibility of becoming homeowners. Besides, the few single-family homes on the market are being scooped up by the scarce millennials who do qualify for a mortgage and investors that know how to work with sellers. All of this makes sandwich lease options the right combination of rent to own that fits the wants and needs of these millions of millennials.

Into the picture steps the “lease to own” niche expert with a solution to all their problems. Solutions these millennials are willing to pay top dollar for. You can get them into a single-family home out in the suburbs. For the cost of a rental deposit on a bigger apartment, you collect the option fee for the ability to purchase. This works both towards the down payment they need and converts into the homeowner equity they want, as soon as they complete the purchase. You offer them a way to improve their credit score to qualify for a mortgage. And it comes with a white-picket-fence-home to raise their family. Having all the right solutions is highly profitable for a niche expert.

Who would have thought that “lease with the option to purchase” offers all of the solutions to the largest demographic group in the tight real estate market of 2023? …

Only a sandwich lease option niche expert!

Here is how to become a landlord today using sandwich lease options!

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

To Your Success,

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.

It’s late November 2022 and the real estate investing world has changed a lot. Interest rates have more than doubled this year. Home prices remain sky high and unaffordable. Mortgage approvals have gotten more difficult rather than easier. As a real estate investor, what are you going to do differently to succeed in this new landscape…?

The answer you are looking for very well might be in “Subject To Deals” (aka Get the Deed).

Subject To Deals Work Well In Recessions

Housing markets with poor affordability, relatively high rates of unemployment, underwater loans, and foreclosure activity will be at risk if we enter a recession or even face a more modest economic downturn. Simply put… recessions are not pretty.

People make mistakes and need help recovering, which is what “Subject To Deals” (aka Get the Deed) is all about.

There are tragic financial situations that some (but not many) people will be facing in the coming year. Recessions cause people to become unemployed. When people become unemployed, too often, they can no longer afford their homes. I know that is tragic but it is also reality. When they can’t make their mortgage payment it is only a matter of a few short months before they go into foreclosure. No one wants to be foreclosed on and face seven years of damage to their credit rating. Or worse yet, ten years of bankruptcy.

You can wring your hands and spill tears over their bad fortune, or you can take action to help them out of a bad financial situation.

This where Subject to Deals become a helping hand.

Get the Deed Belongs in Today’s Real Estate Investor’s Toolbox

Imagine if you could buy a property, bank some money as soon as the deal is done, and help someone in financial trouble all at the same time. That doesn’t happen all the time, but it does happen. Get the Deed has so many tremendous possibilities that it’s another “must-have” tool that belongs in your creative financing toolbox.

Subject to Deals are about buying a property and keeping the existing mortgage in place. There are big benefits to doing this.

Sandwich lease options are certainly a powerful investment method for little or no cash and without taking ownership. Still, the Subject To Deals aka Get the Deed method is another potent way to acquire property for little or no cash and no credit.

With the very real possibility that the number of foreclosures will be increasing soon, now is the time to learn the nuts and bolts for getting the deed subject to existing financing.

As an ethical real estate investor (and problem solver), you come into these deals as a “Knight in Shining Armor!”

Ethically Investing with Subject To Deals (aka Get the Deed)

Does it sound strange to be taking over a property for no money and no credit by keeping the existing financing in place? Your first thought might be that I’m encouraging you to rob or scam people out of their hard-earned homes. But I’m not. The fact is that you will be helping people out of very difficult situations at a time in life when they need help the most.

Stop for a moment to think about the reality of a mortgage going bad (a looming foreclosure). Obviously, the person is in dire financial straits and doesn’t have many options available.

If they have a few months, and if the house is in good shape, and if they have enough equity to pay a realtor’s commission, and if the local real estate market is humming along, they could list the house for sale to get out from under the mortgage before foreclosure. There are four “IFs” in the previous sentence. It only takes one of those “ifs” to not come true for the owner to be out of all other options. When their options are gone is when an investor offering a Subject To Deal becomes the Knight in Shining Armor. Here is why…

If the seller wants to buy another home in six months, next year, or in three years, they will need a good credit score and can’t have a foreclosure or bankruptcy on their record.

Subject To Deals… aka Get the Deed Subject to Existing Financing is how the owner avoids destroying their credit rating for the next seven to ten years. It takes seven years to remove foreclosure and derogatory events from a credit report and a bankruptcy stays with them for ten years.

Here are some of the reasons an owner might desperately need what you are offering…

Many Reasons Why a Seller Wants a Subject to Deal

If you are financially savvy and budget-conscious, you may not realize how many different ways people get into a financial jamb that they need to get out of quickly. But we all know that bad financial times fall even on good people. Here are some of the many situations where you can step in to rescue someone from bad circumstances.

The broadest category is whenever an owner has fallen behind on the payments and will never catch up before the bank demands full payment. It could be that a spouse has gone crazy with a long spending spree and all their money is spent. This gets even more desperate for the owner(s) when a divorce is looming and neither spouse even wants the house anymore. Both just want a fresh beginning. Both agree that Subject to Existing Financing is the best solution!

Subject to Deals work almost any time the owner is financially strapped.

It can be any financially strapped owner. A recession means that millions of people could lose their jobs. People have medical bills with little or no insurance. Business owners are struggling to keep their business doors open and decide that an income is a bigger financial priority rather than staying current with a house mortgage. Or it could be something as simple as the owner took on a bigger mortgage (or second mortgage) than they can financially handle.

A seldom thought about reason is that the owner already has damaged credit and when you take over making the mortgage payments (while keeping it in their name), it helps rebuild the previous owner’s credit report using your on-time payments (knight in shining armor). When it comes to money, there is no limit to the number of ways that people can get into unbelievably bad situations. Many are situations that are best solved with a Subject to Deal!

Reasons Why Subject to Deals Work for You

This is another long list that I can only partially cover here but is covered in detail in the Subject To Deals (aka Get the Deed) course materials. Let’s start with “Subject-To” is the fastest way you can build a portfolio of income-producing properties. Because you are not applying for or taking out loans in your name, there is no limit to the number of properties that you can have under your control.

You never have to qualify for a mortgage so you can control as many houses as you want.

How much higher can your return on investment (ROI) get than when you don’t have any money in the deal? If you truly have no money in the deal, your ROI becomes infinite.

As the knight in shining armor who brings a Subject To Deal (aka Get the Deed) deal to the table, the owner is helped and will thank you. There are situations when the owner is so thankful that they will leave money in the deal so that you have instant equity, walk away with cash in your pocket, or both. This is one of the best ways to build wealth at break-neck speed.

No income, no credit checks, and no mortgage qualifying required!

You’ve read the blogs, you know others are doing it, and it’s time for you to TAKE ACTION NOW:

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

To Your Success,

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.

Let me be clear, it does not take very much money to become extraordinarily successful as a real estate investor. In fact, it doesn’t need to take any of your money. You can use other people’s money to make just as much profit as any other prosperous investor. It can all be done by paying as much or more attention to the contract terms as you do to the purchase price!

When you seek control rather than ownership, you become a lot less concerned with the purchase price.

John D. Rockefeller’s business strategy is exactly the same strategy that you want to use when buying real estate with lease options!

Your Unique Position When Buying Real Estate with Lease Options

You want to be much more interested in the “terms” of the lease. You still need to be conscious of the price (but less so). More of your attention is on terms such as the initial cost of the lease option fee, how long you’ll have control, and your monthly cost (rent) to maintain control.

Because you are less concerned with the purchase price, you can profit nicely from houses costing very near the full retail value. This vastly opens you to the larger market that isn’t available to other investors that are all chasing a few highly discounted distressed sales.

When buying real estate with lease options, the meat is in the middle. You are that meat in the middle. The seller and the tenant-buyer are the bread and butter. Having bread, butter, and meat in the game makes it a win-win-win for all three.

Building rapport with the seller is key to making a deal.

Learn What the Seller Wants From the Deal

Here is a basic deal directly out of my files that any investor can easily put together. Of course, the numbers will vary depending on your specific location and situation, but the basic deal looks like this. I ran an advertisement looking for a home in a decent neighborhood. The advert read:

Company looking for 3 – 4 homes in the [name neighborhood] area for a long-term lease. Call 222-333-4444.

A homeowner answered the advert. Her Realtor^® listing had expired without an offer for her asking price of $189,000. Several other sellers answered my advert but Linda was the most promising because she had an interest in selling as well as being open to a long-term lease. It only took a short conversation to determine that her definition of a “win” was completing the sale at nothing less than $185,000.

Look at all of the sale terms to put the deal in your “win” column.

Clearly, this was very close to the full market value of the house. That meant I had to look at other terms of the deal to put the deal in my “win” column. Most other investors would have instantly walked away because there wasn’t any meat on the bone for them. But when buying real estate with lease options you have much more flexibility to earn a handsome profit.

Letting Linda do most of the talking, I also learned that she had physical ailments preventing her from doing the upkeep and repairs on her own home. For her next home, she wanted a tenant/landlord relationship that required the landlord to maintain the property. She had found a home on a lake that she could get into for $1,000 cash – if she moved fast. That is all the cash she needed from the deal to lease the house she wanted to live in. Completely making her happy required that I assume all maintenance for the house I would lease from her.

Learn how much cash the seller really needs from the deal.

Next, I determined that it would cost me another $4,000 to replace the carpet and paint the interior of the house. This would attract a quality tenant-buyer with the near term ability to purchase the home. I would be in the home for $5,000 ($1,000 to the seller and $4,000 in repairs). Of course, Linda was incredibly pleased that I would immediately spruce up the house (happy seller). I would have control for about 2.7% percent of the $185,000 purchase price (win-win).

I needed to look at the rest of the scenario and possible terms for a successful lease option. But I knew that I was close! Annual appreciation was expected to be between 9% and 10%. That meant I could expect the value to increase by more than $17,000 in the first year (based on $189,000 full retail). That more than covered my initial $5,000 cost. Now, I knew I had at least a win/win deal but I needed to bring in a tenant-buyer to complete the win/win/win formula.

How Buying Real Estate on Lease Options Becomes Win-Win-Win.

Finalizing the Profitable Terms

After buying real estate on lease options, finding high-quality tenant-buyers is a breeze. The same day that I signed terms with Linda, I ran another advert looking for a tenant-buyer. Emma was one of the first people to respond to the ad. She was interested because the ad didn’t specify no pets and she needed a place with a yard that allowed her two dogs. Allowing pets is one of the keys to finding tenant-buyers willing to put down a big deposit. When they have enough for a deposit, you turn that into their nonrefundable option fee (instead of a refundable deposit).

Emma had $16,000 saved towards purchasing a home. But she still had a little work to do on her poor credit, which is why mortgage brokers weren’t yet ready to talk seriously with her. By me accepting the $16,000 as a purchase option fee, Emma was able to get into a home with her dogs and be on the road to purchasing a home by applying her $16,000 towards the down payment.

This created the final piece for the win/win/win formula.

As soon as the deal was in place, I walked away with $11,000 in my pocket. I did it by using other people’s money to structure the deal. Here’s how my numbers worked out:

Option fee to seller (Linda)                         -$1,000

Improvements                                               -$4,000

Option fee from tenant-buyer (Emma) +$16,000

Left in my pocket                                        +$11,000

I also shifted the maintenance requirements to Emma. Going forward, I had to pay Linda $1,100 a month in rent, but I was collecting $1,500 from Emma. That left $400 in my pocket each month until Emma exercised her purchase option.

Emma’s purchase option price was $206,000 with an escalation clause of 9% (appreciation) if she didn’t complete the purchase within 18 months. After accounting for my upfront costs, option fees, positive rent cash, selling price, and related transaction costs, I cleared $32,800 from the entire deal. All by controlling the property without owning it!

In the end, the seller got her full asking price (win), I made a very respectable profit (win), and the buyer owned a home with equity (win).

Buying real estate with lease options begins HERE:

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

To Your Success,

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.