Keywords: creative financing real estate, sub2 vs seller finance, when to use lease option, structuring creative real estate deals, wholesaling exit strategies
When it comes to real estate investing, one size definitely doesn’t fit all.
If you’re working with motivated sellers or distressed properties, knowing how to choose the right creative financing strategy can make or break a deal.
In this article, we’ll break down the top 3 creative deal structures — and more importantly, when to use each one. Whether you’re wholesaling, flipping, or holding for cash flow, this guide will help you close more deals and provide real solutions to sellers.
1. 🔄 Subject-To (Sub2): Best for Sellers in Distress
What it is: You take over the seller’s mortgage payments “subject to” their existing financing staying in place. The deed transfers to you, but the loan stays in their name.
Best Situations:
- The seller is behind on payments or facing foreclosure
- They have little to no equity
- They need out fast but don’t want the hit to their credit
- Interest rates on the existing loan are lower than market rates
Why it works:
- You can acquire homes without bank loans
- It’s fast — no underwriting delays
- You can wholesale the deal or keep it for cash flow
đź’ˇ Tip: Always be transparent with the seller and consider using a land trust or attorney to structure Sub2 properly.
2. đź“ť Seller Financing: Ideal for Free & Clear Properties
What it is: The seller becomes the lender. You make monthly payments over time, often with little or no money down.
Best Situations:
- The property is owned free and clear
- The seller doesn’t need all the money upfront
- They want passive income
- You want to avoid traditional financing or credit checks
When to use it:
- Elderly landlords ready to retire
- Tired investors with lots of equity
- FSBO (For Sale By Owner) leads who don’t trust agents
Structure example:
- $200,000 property
- $10,000 down
- $1,100/month for 15 years at 6%
đź’¬ Use seller finance when you want control of the terms and a more flexible negotiation.
3. đź•’ Lease Option: Perfect When You Need Control Without Ownership (Yet)
What it is: You lease the property now, with the option to buy later at a set price.
Best Situations:
- You want to control a property now, but don’t have capital or credit
- Seller is unsure about a full sale
- Great for rent-to-own tenant buyers
When to use it:
- In flat or appreciating markets
- When you plan to wholesale the option to another buyer
- When you’re trying to test a property before committing to the purchase
You can structure “sandwich lease options” where:
- You lease from the seller
- You sub-lease to a tenant
- You make the spread between the two payments
🧠So Which Strategy Do You Use?
Here’s a quick breakdown:
| Scenario | Best Strategy |
|---|---|
| Behind on payments | Sub2 |
| Lots of equity & no mortgage | Seller Financing |
| Low equity & seller hesitant | Lease Option |
| Seller needs debt relief fast | Sub2 |
| You want cash flow & control | Seller Financing or Lease Option |
| You want to wholesale the deal | Any of the above (depends on exit strategy) |
🧱 Pro Tip: Sometimes you can combine strategies — like starting with a Lease Option and renegotiating to Seller Financing after 12 months.
đź“Ł Your Presentation Matters
Most sellers won’t know what “Subject-To” or “Lease Option” means. That’s why presentation is everything.
Having a clean, professional site that:
- Explains your process clearly
- Builds trust through testimonials and photos
- Shows active and past deals
…makes all the difference when you pitch these creative solutions.
That’s where DoorStack comes in.
🚀 Want to Pitch Creative Deals With Confidence?
With DoorStack, you can:
- Launch a branded investor site that explains Sub2, seller finance, and lease options
- Create instant credibility with real estate agents and sellers
- Capture leads with done-for-you forms
- Bundle your branding, email, and web presence in one place
👉 Start building your DoorStack at mydoorstack.com
Custom websites made for real estate investors, by real estate investors.