One of the techniques I like to use is ?Subject to Financing? aka ?Owner Financing?. With this technique, you purchase the property from the seller by simply taking over their existing mortgage. The mortgage stays in the seller's name and without obtaining financing you own the home. Not a bad deal from my view point.



State to state the rules to ?Owner Financing? differ. In fact, several states are attempting to pass legislation to ban this practice. So it would be wise to consult with a local attorney to verify if the laws have been passed that prohibit you from this practice. Regardless, this is still the best method of easily financing a purchase.

What about the ?due-on-sale? clause that most mortgages contain today?

Although it is true that the lender does have the right to call the loan due, but not the obligation to do so; it makes absolutely no sense in today's poor economical times. It makes more sense for a bank to settle for receiving the monthly mortgage on time rather than force it into foreclosure.

Why would the seller agree to place their credit at risk?

A motivated seller is desperate to eliminate the responsibility for payments. You are offering them the opportunity to remove the burden of trying to make the payments when it is impossible; thereby removing them of the pain and stress they've had to endure. Even though the seller remains financially responsible, your financial contribution actually improves their credit. You are making payments that they just could not afford.

By far ?Subject to Financing? is the best offer if your state does not prohibit it. This option should be the first one considered. It is a situation where all parties win. The bank benefits by receiving timely payments. The seller benefits from debt relief. And best of all, you benefit by leveraging a small amount of money to finance your real estate transactions.

Over the years, I've encountered several couples that were desperate to sell. Had their state permitted the ?Subject To Financing? option, I may have been able to help. There is a down side though to buying property that is still financed by a bank. Like the seller/owner, you are sitting on property hoping to sell it. With this economy, it is impossible to move property fast enough for it to be beneficial to me. I would in fact become just as much a nervous mess as the seller I got the home from. The best option in my professional opinion is using ?Owner Financing?. It is more profitable for the real estate investor, and isn't that what this is truly about.