Subject to & Lease Options
I would like to reach out to the experience in the community about these two strategies. Lease options & Subject to. Through your experience what are the benefits of both strategies and how best to use them?
I have bought sub2 a handful of times. It is fast and can get you in to a property with little money. That is the benefit and the drawback. A person can buy sub2 all day long, because it is "easy" but that doesn't mean those are good deals. For me, a sub2 deal is for a quick rehab and refinance, or rehab and sell. I do not want the underlying loan in place, nor the on-going association with the previous owners' credit. If things go wrong, it is *their* credit at risk, which is an unsatisfactory way to do business (for me).
I have sold on a lease option, but this was before the days of Dodd-Frank. I'd have to qualify my tenant-buyers with an RMLO, and so far I have not undertaken that strategy. This is largely because we have moved to holding our properties, not selling them. Once all of our mortgage slots are filled up, I might consider buying on a lease option, but we haven't had the opportunity, nor have I actively pursued L/O on the buy side. When I have asked sellers if that is an option they would consider, "selling" on an option, they have all wanted to sell outright and not do a lease option.
There are many others who would do the opposite from the above, and perhaps they will chime in.