What Is This Strategy Called?

  • Common Terms:

    • "Subject-To" Financing (taking over payments without a new loan).

    • "Lease Option" or "Option-to-Purchase" (renting with future buyout rights).

    • "Contract for Deed" (seller financing with balloon payment).

We combining these with a trust agreement for added security.

Is this legal? 

Due-on-Sale Clause: Most mortgages allow transfers if payments continue (Fannie Mae Guidelines).

Seller Default Concern:

We use a performance deed (reverts title back to you if we miss payments)

 

How It Works (Step-by-Step)

  1. Contract Phase:

    • We sign a purchase agreement with you (the homeowner, often with a 5–10-year balloon clause).

    • Title is transferred to a land trust (We are responsible for the trust; your name isn’t public).

  2. Payment Phase:

    • We make monthly payments to you, the seller (often higher than market rent).

    • We renovate and lease the property (our cash flow covers payments).

  3. Exit Phase:

    • We may sell before the balloon payment is due and you collect early.

    • If we default, the property reverts to the seller per contract.

Why It Works:

  • Seller Benefits: Steady income + property upgrades + no realtors.

Fact Check:

  • These strategies (lease options, subject-to deals) have been used since the 1970s and are recognized in all 50 states (with proper legal setup).

  • The CFPB and Fannie Mae allow them, as long as the original mortgage keeps getting paid (source).

    • "Yes, this is 100% legal when structured correctly. We use a recorded contract and a performance deed (or land trust) to ensure:

      • You keep legal title until the final payment.

      • If we default, the property automatically reverts to you—no foreclosure needed.

      • You are welcome to consults your own realtor/attorney.

Ready to sell your property?