PURCHASE “SUB-TO” HOME WITH NO MONEY
If you want to purchase subject-to homes without using your own money, here are a few
strategies you can consider:
1. Subject-to Financing: In a subject-to deal, you purchase a property subject to the
existing mortgage, meaning you take over the mortgage payments without formally
assuming the loan. You can negotiate with the seller to take over their mortgage,
allowing you to acquire the property without needing a traditional loan or your own
funds. However, this strategy requires the seller's cooperation and may involve legal
and financial risks, so it's crucial to consult with a real estate attorney or experienced
professional.
2. Private Money Lenders: Seek out private individuals or companies who are willing to
lend you the necessary funds for the subject-to purchase. Private lenders may be more
flexible than traditional banks and may not require a down payment or extensive credit
checks. Establishing relationships with potential private lenders can provide you with
alternative financing options.
3. Joint Ventures or Partnerships: Consider partnering with an investor or someone who
has the necessary funds to acquire the subject-to property. You can negotiate a profitsharing arrangement or equity split, where your partner provides the funds while you
handle the property management or other aspects of the deal.
4. Seller Financing: Negotiate with the seller to provide financing for the subject-to
purchase. In this arrangement, the seller acts as the lender, and you make payments
directly to them over an agreed-upon period. Seller financing can be advantageous as it
allows you to bypass traditional lending institutions and negotiate flexible terms directly
with the seller.
5. Lease Options: With a lease option, you can lease the property from the seller with an
option to purchase it at a later date. You can negotiate a portion of the lease payments
to go toward the eventual purchase price. This approach allows you to control the
property without needing a large upfront payment or traditional financing.
Remember, when engaging in subject-to transactions or alternative financing methods, it's
crucial to seek professional advice from real estate attorneys, accountants, or experienced
investors. They can help you navigate legal complexities, assess risks, and ensure that you are
making informed decisions.