lease/option vs subject to


I’m a newbie working on my first deal. I’ve got a person who wants to get rid of his house. He owes 95, its worth about 120, and he wants little or nothing for it. It needs a little exterior paint, but otherwise in good condition.

It seems to me that either a lease option or subject to would be ideal for this situation. What are the pros/cons of using either? I think that a lease/option would be safer for me, because I could get out if I had to when the lease is up. I’m a bit confused about a good exit strategy for subject to (just sell it cheap and take a loss?).

Also, would anyone be interested in partnering on a deal similar to this one? It would be great to have an experienced investor walk through a few deals with me! Thanks.



I would need a little more information before I could tell you if this is a deal or not. Interest rate on the loan, pmt amount, rental rates in the neighborhood, exact amount of work the house needs, etc.

What I CAN tell you is that you want the deed over a L/O in virtually every case. In a sandwich L/O you are little more than a tenant subleasing. Alot of risk involved in that. Ask me how I know.

Get the deed and you own the house, no middleman stuff.

If it is a good enough deal to L/O it is a good enough deal to get the deed.

Just my somewhat educated opinion,

I agree with William too. Get the deed if you can for the same cost. Some sellers may not give up the deed because they are concerned about having to foreclose if you do not make the payments. If you can not get the deed then fall back on the lease purchase. Would be glad to try to help any way i can.

Thank you,

Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737

512-301-9171 home
512-587-6177 mobile


Go with what Willam GA said. Always try to get the deed. With L/O, the seller is in control, and can file bankruptcy, or take out another loan, or try to go around you and deal completely with your tenant/buyer (If you are not planning to live there). If the prop is worth more than loan, you should always be able to come out alright.

What state are you in?

You can email me if you have any more questions.

Gary-TX :hammer

Thanks for the advice! I live in austin, tx btw.