Subject To is where you own the house, because you get the deed and the loan stays in the sellers name.
Lease Option is where you lease the property so you do not own it. Whatever happens to the seller happens to your deal and the property, whereas in Subject To where you have the deed you have control of the property.
This is a basic explanation of the two different deals.
Oh ok, But can you use the 'subject to' clause in tandem with a lease-option to both control the property and also carry out the lease-option without the seller intervening?
And with a 'subject to' agreement, say in a lease-option, where you can't find a tenant-buyer, what is the process you go through to NOT exercise your option with the seller or do you simply ring up and apologize "Sorry i wasn't able to find anyone, carry on trying to sell your house ???
When you use Subject to investing, you're buying the house (getting the deed) so there is no lease-option (at least not with the seller). If you want to rent/sell on a lease/option, then the home is yours to do it with. However, there is no 'oops, I couldn't find a tenant clause.'
You become responsible for the loan against the property. It's your responsibility to pay that loan every month, so don't buy anything you don't think you can get rented/sold.
Nothing personal here, but this form of investing where you put in some kind of 'I buy if I can find a tenant/buyer of my own' clause seems to becoming more common. This is a lousy way to do business and will only succeed in pretty much trashing your name. Please don't get started in this method. If you intend to buy, then buy it. If not, then don't. Finding tenant/buyers is part of the business, don't use the seller as a crutch to protect yourself.
rynosaurus,
Subject To is where you own the house, because you get the deed and the loan stays in the sellers name.
Lease Option is where you lease the property so you do not own it. Whatever happens to the seller happens to your deal and the property, whereas in Subject To where you have the deed you have control of the property.
This is a basic explanation of the two different deals.
John $Cash$ Locke
Oh ok, But can you use the 'subject to' clause in tandem with a lease-option to both control the property and also carry out the lease-option without the seller intervening?
And with a 'subject to' agreement, say in a lease-option, where you can't find a tenant-buyer, what is the process you go through to NOT exercise your option with the seller or do you simply ring up and apologize "Sorry i wasn't able to find anyone, carry on trying to sell your house ???
Thanks Mate
When you use Subject to investing, you're buying the house (getting the deed) so there is no lease-option (at least not with the seller). If you want to rent/sell on a lease/option, then the home is yours to do it with. However, there is no 'oops, I couldn't find a tenant clause.'
You become responsible for the loan against the property. It's your responsibility to pay that loan every month, so don't buy anything you don't think you can get rented/sold.
Nothing personal here, but this form of investing where you put in some kind of 'I buy if I can find a tenant/buyer of my own' clause seems to becoming more common. This is a lousy way to do business and will only succeed in pretty much trashing your name. Please don't get started in this method. If you intend to buy, then buy it. If not, then don't. Finding tenant/buyers is part of the business, don't use the seller as a crutch to protect yourself.
Roger