BiggerPockets

Lease Options vs Subject To

Saturday, May 16

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Lease Options and Subject To's (aka "Getting the Deed") are two very popular ways to purchase real estate with little or no money down. Acquiring investment real estate can be handled with many different approaches, but these two techniques can be implemented with little or no money down in most incidences.

A lease option is a technique which involves gaining 'control' of a property, but not owning it. It is the right to possess a property now and purchase that property at some future date with terms you define when you buy it.

A "Subject To" is getting the deed to a property without getting a mortgage for the home. Instead, the seller signs over the deed to his home 'subject to' the existing mortgage. The buyer in this case makes the mortgage payments on the old loan, but does not need to get a new mortgage (or ask for approval through an assumption of existing mortgages) to acquire this home.

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