Sub-To And L/O--What's The Difference?

Comments(9)

• 
  scott_mn22nd September, 2003

  First usually questions like this you can find by searching the board pretty easily. So I would start there for something more indepth.
  
  Subject to is picking up a property subject to the existing financing.
  
  Lease/Option is you are leasing the property for a certain amount of time and within that certain amount of time you have the option to purhcase the property. Key word here is option and not obligation.
  
  Good luck with your investing.[ Edited by scott_mn on Date 09/22/2003 ]

• 
  sire22nd September, 2003

  Many times when others do a L/O they get the deed but do not record it. This is what we once did. The problem is there is no true control in this form. A real subject to you would get the deed not through l/o but in a sale, then the deed would be recorded. This is the strongest subject to. There is no way the previous owner could not comeback and record liens ar get a judgement on the property.
  Sire

• 
  alubeck23rd September, 2003

  Subject To is a way to acquire proerty, lease option is a way to sell it.

• 
  dare20032nd October, 2003

  Quote:
  On 2003-09-23 19:16, alubeck wrote:
  Subject To is a way to acquire proerty, lease option is a way to sell it.
  
  
  So when you find a motivated seller you can buy it subject to...and offer to close in 60-90 days right? And then you have that amount of time to find an investor to pick it up off your hands( and collect your profit). Just trying to clarify here.

• 
  OCSupertones2nd October, 2003

  Quote:So when you find a motivated seller you can buy it subject to...and offer to close in 60-90 days right? And then you have that amount of time to find an investor to pick it up off your hands( and collect your profit). Just trying to clarify here
  
  Someone cal tell me if I'm wrong...but,
  
  sub2 is buying a property using the financing that is already in place on that residence through the existing owners.
  
  L/O is tying the property up and finding a buyer...you never own the property, you just have the option of owning it.
  
  thats my take on it.

• 
  dare20032nd October, 2003

  Quote:
  On 2003-10-02 21:19, OCSupertones wrote:
  Quote:So when you find a motivated seller you can buy it subject to...and offer to close in 60-90 days right? And then you have that amount of time to find an investor to pick it up off your hands( and collect your profit). Just trying to clarify here
  
  Someone cal tell me if I'm wrong...but,
  
  sub2 is buying a property using the financing that is already in place on that residence through the existing owners.
  
  L/O is tying the property up and finding a buyer...you never own the property, you just have the option of owning it.
  
  thats my take on it.
  
  
  drafteeinvestor said L/O is the opposite..hmm [ Edited by dare2003 on Date 10/02/2003 ]

• 
  jeff120023rd October, 2003

  Sub2 = You get title to the property.
  Lease/Option = You are essentially just renting the property.
  
  Sub2 = you own the property, you are just making payments on the loan that was issued to the seller. You did not bring new financing to the table. You did not assume the existing loan.
  Lease Option = Your seller still owns the property, and can further encumber this property, hindering your ability to deliver clear title when your t/b is ready to excercise their option.
  
  Overall you are in a much stronger position with a Subject to transaction.
  
  Subject to and lease option can be used either to acquire property, or sell property. Those in the know will agree I am sure that Sub2 is the preferred method to acquire of the two, and Lease/Option is the preferred method to sell. Next to cash or new financing of course!.
  Hope this helps,
  Jeff [ Edited by jeff12002 on Date 10/03/2003 ]

• 
  chantynicole1st November, 2003

  How do you own the property if the laon for the house is still in the original owners name?
  ~thank you
  ~Chantelle

• 
  webuyproperties1st November, 2003

  Quote:
  On 2003-11-01 20:40, chantynicole wrote:
  How do you own the property if the laon for the house is still in the original owners name?
  ~thank you
  ~Chantelle
  
  
  Title can change hands - even if their is a loan. Technically you are not getting "clear title." Clear title is where their aren't are any liens on the property. In the case of subject to, you get the deed to the property (you are the owner) with a 1st mortgage alreasy in place. One of the reasons why this is so good, is because the mortgage is not yours, meaning that your debt to income etc, is not hindered by you acquiring another property.
  Hope this helped.
  Derek