Creative Financing That Actually Worked (Not Just Theory)

[Daniel Sehy]

Like many of you, I've read about all kinds of creative financing strategies; seller financing, master lease options, JV partnerships, equity swaps with contractors, you name it. But what I've found is that a lot of the examples floating around are theory or "what could work," not actual deals that closed.

It's personally opened my eyes to possibilities I had overlooked before. But I know there’s a lot more to learn. I don’t want to reinvent the wheel if others here have real-world examples of how they structured something creative and made it a win-win for all sides.

I’m not looking for secret formulas or gimmicks. just solid, practical insights from folks who’ve put these ideas into action.

Questions:

• What’s the most creative (but legal) financing structure you’ve successfully used?

• How did you convince the other party (seller, lender, investor) to buy into it?

• Did it become a repeatable strategy for you, or was it more of a one-off?

[Ken M.]

Quote from @Daniel Sehy:

Quote from @Daniel Sehy:

Quote from @Michael Carbonare:

Daniel, I've been investing in real estate for about 30 years.  Out of necessity, (minimal cash), I began my investing with lease options.  Specifically, Cooperative Assignments.  I would consider this strategy to be in the creative category.  Done correctly, they are true no risk, no cash out of pocket deals, short term deals designed to raise cash which I was then able to roll into longer strategies such as buy and hold, and fix and flip.
Also, within the lease purchase category, I've done sandwich leases to gain control of a property with minimal upfront cash, and also hybrid options.

@Michael Carbonare this is exactly what I was hoping would show up here.

30 years in and still leaning into creative structures says a lot, especially when most newer investors are getting stuck thinking "conventional or nothing."

The hybrid model you mentioned are you structuring those where you have a fixed strike price + rent credits built in? Or are you floating the back-end terms until resale?

Also curious:

What’s the biggest mistake you see people make when trying to do sandwich or coop deals today? (Especially in this interest rate environment.)

If you were starting over right now in 2025, would you still begin with lease options or do you think the game has changed too much for that to be your entry point again?

Appreciate you dropping this so many folks here need to hear real stories like this, not just theory.

 @Ken M. - this is gold. I appreciate the honesty, especially around learning the hard way. Subject To is one of those strategies I’ve heard of but never pulled the curtain back on fully. Sounds like you’ve mastered the game most investors are too intimidated to touch.

A couple questions if you don’t mind sharing:

1. When you’re structuring a Subject To, how do you make sure the seller is fully protected and that you’re protected too if things go sideways?

2. What does your typical Subject To deal look like today? Are you mostly targeting distressed sellers, or is there a niche profile that tends to be a good fit?

3. Have you ever had a loan called due (due-on-sale clause triggered)? If so, how’d you handle it — or is that risk more theoretical than real in your experience?

4. For someone who’s been primarily focused on conventional multifamily underwriting (like me), what’s the first step you’d recommend to explore Subject To seriously without getting wrecked?

Would love to dive deeper, this might be the kind of creative financing that unlocks momentum for newer groups like ours while we build investor capital.

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Your question: "how do you make sure the seller is fully protected and that you’re protected too if things go sideways"

You can't. Your only safety valve is to be able to pay off the note in 30 days from the time you receive a letter from the lender demanding payment under the Due on Sale clause. That does not prevent a lawsuit from the attorney General in the event you did something illegally. They have up to 10 years from the date of discovery on some issues. Just get properly trained first (there is No One on YouTube pushing SubTo that properly trains, in my experience)

I have been sued and I've sued. I know what the issues are.

 Your Question: "What does your typical Subject To deal look like today? Are you mostly targeting distressed sellers, or is there a niche profile that tends to be a good fit?"

I avoid someone in foreclosure. Attorneys General have heartburn about all of the fraud targeting "distressed sellers", that usually means pre-foreclosures, from the 2008 debacle. They are actively looking for violations.

I focus on "don't wanters", people who need to move, people who've inherited an unwanted house, people who have outgrown but can't sell their house, people too long on the MLS and such.

Your Question: "Have you ever had a loan called due (due-on-sale clause triggered)? If so, how’d you handle it — or is that risk more theoretical than real in your experience?

I have twice. Once in 2008 on a property I bought in 2001. That was a nightmare. Went all the way to the 9th District. I won, but it was a calamity being in.

Again in 2021. I just simply paid that off and ended the problem.

The most prolific promoter of SubTo on Youtube, said in May 2025 he had already had 10 Due On Sale called in those few months. He obviously is doing something wrong.

Your Question: "what’s the first step you’d recommend to explore Subject To seriously without getting wrecked?"

I'm biased. Save the grief, buy the one year, one on one training, that guarantees you buy a house SubTo below market, safely or your money back. There is no other way, safely. It's made to sound simple by the guy on YouTube so he can sell memberships. He offers No Guarantees. No money Back. Report is he sets you in front of videos and you fight everyone else to get answers.  That is not the way to learn a techniques like this. Other questions can be answered by asking at my Inbox (click on the bell) at top right of your screen