Subject To understanding

Hi, I’m a newbie. Can someone go into more detail about the steps involved in doing a subject to on a house, then doing a lease option with that house to a different tenant buyer.

$300,000 house, appraised at $365,000, comps at $379,000.
Sellers will carry if I want, but want $10,000 down so they can put down on another house, then $10,000 more when I flip the house and sell it.
Possibly have found L/O tenant buyers that also want seller financing and can put down $10,000.

Do I just do an owner carry with the existing sellers, then lease option to the new people, or
do I do a L/O with the sellers then a sub-lease option with the new buyers,
do I do a Subject to, then L/O to the new buyers?

Sorry so involved.
Thanks for your time and help!

That is a lot of weight to be holding for a newbie. How much are the monthly payments and how may of those can you carry?
Let’s say the monthly note is $2,000 Let’s say the hold time is for $6 months. :banghead That is $12,000. :deal
Will the L/O cover the underlying note? I don’t mind the $10,000 and $10,000 to make $50,000 but what if it goes 9 months without selling… :eyes

What if you got an option on the house? Tried to move it and see if there is a market for the home? :dance

If you are asking basic subject to questions on high dollar homes, PLEASE know your market. You can get sooooo burned.

Good luck



Glad to meet you.

When you are first starting out using the Subject To method, I will highly recommend you start with Bread and Butter houses. $100K - $150K price range is where you want to be or let’s call it the safe side of Sub 2.

Houses in the price range you are talking about have a much greater holding time and can bury you real quick.

Most new people want that first deal so bad they overlook what their common sense and advice from the pro’s would dictate to them. There are many deals out there, so don’t make your first deal your last deal.

I advise my students constantly not to become involved in the beginning with high priced houses, sellers that want to stay in the house after you have purchased it, fool with houses that need a lot of work, etc., I know it is hard because that first deal is so important.

There is not always a pot of gold at the end of the real estate investing rainbow for those that get involved to quickly without experiencing the rewards of Bread and Butter houses that have very little risk.

John $Cash$ Locke

Thanks for all the help!


I agree with Tim and Terry. Stick with the “bread-n-butter” houses in the lower price ranges until you get your feet wet.

You’ll be glad you did.

Happy Investing,


Giving an option to the Seller to buy his house back is a big no no.

Avoid it like the plague, or you will be in court with an expensive attorney to feed.