Hans dissects his 11th subject-to deal, a manufactured home purchased for $132,000 with a $124,212 first loan (4.25% interest, $807/month PITI) and a $5,000 non-interest-bearing partial claim second lien, totaling ~$130,000 in debt. Found via expired low-equity listings, the seller, over-leveraged and out-of-state, required no cash upfront, with $1,100 closing costs and $1,700 rehab expenses (inspection, cash-for-keys, landscaping, cleaning). Despite squatter issues (see Episode 45), Hans hired a realtor ($3,500 commission) to sell remotely on a contract for deed for $140,000 ($7,000 down, 5%, 9.91% interest, 30-year term, $1,300/month PITI), yielding ~$500/month cash flow. Front-end profit was negative $1,797 after costs. Over 10 years, the deal projects $59,000 in cash flow (interest income) and a $31,469 back-end spread (after $5,000 partial claim repayment), totaling ~$85,000 profit. The Deal Evaluator’s amortization tab tracks principal paydown, showing ~$115,000 remaining on the subject-to loan as of May 2024. 

Hans emphasizes analyzing higher-rate loans (5-7%) for long-term profitability and learning from virtual deal challenges. 

Get the Deal Evaluator at https://www.sub2investor.com/!

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Hans analyzes a hybrid subject-to deal in Columbus, Ohio, with Josh, a first-time investor, using the Deal Evaluator’s long-term rental tab. The duplex, under contract for $450,000, has a $411,000 subject-to loan (4% interest, $2,015.70 P&I, $2,550 PITI with PMI) and a $19,000 seller carry note (6.5%, ~$125/month, 7-year balloon, potentially negotiable to 0% over 10 years). Costs include $20,000 down, $2,000 closing, and $80,000 rehab. Current rents are $1,225-$1,350/unit, but market rents average $1,850-$2,200/unit. Keeping one tenant at $1,500 and rehabbing the other for $2,000 yields $3,700/month. With conservative expenses (10% management, 5% vacancy, 5% repairs, $100 utilities, $50 landscaping), cash flow is ~$410/month (5.49% cap rate, 5% cash-on-cash return on $100,000 invested). At $2,000/unit, cash flow rises to ~$650/month. Hans views rentals as appreciation plays, not cash flow drivers, citing risks like tenant damage or high rehab costs. Josh sees value in appreciation (~$154,000-$355,000 over 10 years at 3-6%) and potential PMI removal post-rehab.

To mitigate due-on-sale risks, Hans recommends a land trust for anonymity over an LLC, with the LLC as beneficiary, ensuring compliance with Garn-St. Germain.

Check out the Deal Evaluator at https://www.sub2investor.com/!

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Hans recounts his 11th subject-to deal, a manufactured home 3.5 hours from his base, acquired via expired low-equity listings (LTV ≥80%) through postcard marketing. With a mid-4% interest rate loan, the deal promised strong cash flow. Closed remotely, Hans faced chaos: two squatters moved in without paying option fees or rent. The first squatter left after sheriff intervention, but the second, vouched for by a deceptive landlord, also squatted, requiring further sheriff action. Learning from these setbacks, Hans hired a realtor (3% commission) for boots-on-the-ground presence, who marketed the property and found a legitimate seller-finance buyer via Facebook Marketplace. Now cash flowing $500/month on a rent-to-own basis for 1.5 years, the deal succeeded despite early nightmares.

Key lessons: install a Ring doorbell and keypad for remote monitoring, secure reliable local support, and conduct thorough tenant screening. Curious about Hans’ coaching? 

Check out https://www.sub2investor.com/!

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Hans dives into funding subject-to deals with private money, addressing cash needs for seller payments, closing costs, or agent fees when upfront capital is required. He outlines three strategies: 1) Short-term gap funding (3-6 months, interest-only), e.g., borrowing $20,000, repaid with $2,000 interest upon receiving a $25,000 option fee or down payment, ideal for quick lease option or seller-financed exits. 2) Mid-term lending (3-7 years, amortized), e.g., borrowing $30,000, repaying $15,000 from a down payment, and amortizing the remaining $15,000 at 18% over 5 years with monthly principal and interest payments, suitable when full repayment takes longer. 3) Long-term equity partnerships, where an investor buys into a trust (e.g., $25,000 for 25% ownership), sharing profits, losses, depreciation, and appreciation, offering high returns (e.g., 25% cash-on-cash, ~$208/month for $10,000 invested). Hans emphasizes building a network of lenders or partners (family, friends, coworkers) and tailoring the funding model to your exit strategy (rental vs. quick sale). Curious about private money lending? Share your thoughts!

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Hans analyzes a potential subject-to deal with a community member using his Deal Evaluator software, in a "Deal or No Deal" breakdown. The property, a pending Texas home listed at $220,000 (estimated fair market value $215,000), has a $203,000 loan at 7.25% interest (originated August 2023, 30-year term, $1,376 P&I, $1,884 PITI) with $5,700 in arrears. Front-end costs include $5,000 to the seller, $6,000 agent commission, $4,500 closing costs, and $2,000 private money lender (PML) fees, totaling $17,500. Borrowing $33,000 at 1.75% monthly interest for 6 months adds $577.50/month, with holding costs of $14,558. Selling on seller financing at $225,500 (5% markup), 10% down ($22,550), and 9.5% interest yields $323/month cash flow. However, negative equity (~$10,000) and $15,000 net loss after down payment make it unviable for Hans, despite a 25% cash-on-cash return. A landlord might consider it for rental cash flow (~$300/month), but Hans deems it a "no deal" unless an equity partner covers the $15,000 loss, which the low cash flow can’t support splitting.

Watch at YouTube.com/Sub2Investor and check out Hans’ Deal Evaluator at https://www.sub2investor.com/!

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Hans reveals his go-to strategy for finding off-market subject-to deals using PropStream, bypassing MLS access. He walks through pulling an expired low-equity list, targeting failed listings (expired, canceled, or withdrawn) from the past 1-3 years with a loan-to-value (LTV) of 70-80% or higher (equity ≤30%) and max equity of $75,000. Focusing on single-family homes (3+ bedrooms) in markets like Atlanta, Kansas City, or Milwaukee, Hans filters for individual owners and caps property values at $400,000 to ensure affordability and quick disposition. This yields 100-200+ leads per market, ideal for postcards, calls, or texts. PropStream’s List Automator updates lists automatically, and despite ~80-90% accuracy compared to MLS data, it’s sufficient for consistent deal flow. 

Use Hans’ affiliate link at https://www.sub2investor.com/ to try PropStream (~$100/month).

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Hans breaks down his 10th creative finance deal, a seller-financed duplex acquired via a wholesale referral. Purchased for $110,000 ($5,000 down, $105,000 note at 5% interest, 7-year balloon, $563/month), the duplex in an A-class area needed moderate rehab. Instead of renting both units, Hans marketed it to investors and sold it on a contract for deed for $145,000 ($29,000 down, 6.4% interest, 6-year balloon). After $12,000 total costs ($5,000 down, $5,000 to wholesaler, $2,000 closing/holding), Hans netted $17,000 upfront profit, ~$200/month cash flow ($12,000 over 6 years), and a $13,000 back-end spread when the buyer refinances, totaling $42,000 profit. No banks involved!

Hans shares the promissory note and deed of trust, crafted without a due-on-sale clause for flexibility, emphasizing simplicity and strategic pricing to attract a landlord buyer.

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Hans introduces a powerful pay-per-lead tool, iSpeedToLead, revolutionizing lead generation for creative finance deals, particularly subject-to transactions. This platform allows investors to buy exclusive or shared motivated seller leads generated via Google, Facebook, YouTube ads, or SMS, bypassing the need to manage complex marketing campaigns. Hans highlights how to filter for subject-to candidates: target sellers behind on mortgage payments, owning properties for 2-9 years (less equity), with urgent motivations like financial distress or relocation. With iSpeedToLead’s Coupon Club ($200/month), leads cost just $29 each (refundable if invalid), and Hans’ promo code SUB2INVESTOR grants $225 in credits for ~10 free leads. He emphasizes a robust 30-touch follow-up system to outpace competitors, especially for shared leads. This tool eliminates excuses for not finding deals, enabling instant seller outreach.

Ideal for investors with a marketing budget ($500-$1,000/month), it’s a cutting-edge solution before the market saturates.

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Hans dives into his ninth subject-to deal, a St. Louis rental property acquired from an expired low-equity listing (LTV >80%) via PropStream. Purchased for $121,000 ($116,000 loan at 2.875% interest, 40-year amortization, $566/month PITI, plus $5,000 cash to seller), the property had a tenant paying $1,200/month, yielding $634/month cash flow. After $6,000 front-end costs ($5,000 to seller, $1,000 closing), Hans recouped $5,706 in 9-11 months via rent, despite an eviction. A lease option followed ($2,500 option fee, $1,100/month rent, $130,000 option price), netting $4,280 over 7 months. To avoid landlord duties, Hans partnered with a professional landlord, transferring 50% trust ownership for a $5,000 buy-in. The landlord manages tenants, repairs, and bookkeeping, targeting $1,500/month Section 8 rent, potentially yielding $734/month split 50-50 ($367/month each). Total front-end profit: ~$11,000, plus ongoing cash flow and tax benefits (depreciation).

A creative, low-maintenance strategy for C-class rentals!

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Hans welcomes tax strategist and seasoned investor Bill Walston to dive into the tax implications of creative finance deals. Bill, a former CPA with a master’s in tax law, shares his expertise on structuring subject-to, seller financing, lease options, and contract-for-deed deals to minimize tax liability. Key takeaways include: avoiding dealer status to escape high ordinary income and self-employment taxes (15.3% on profits); leveraging installment sales for contract-for-deed and seller financing to spread capital gains and depreciation recapture over time; and using lease options to reinforce investor status, reducing tax risks. Bill’s acquisition hierarchy prioritizes subject-to for tax benefits like depreciation and interest deductions, followed by wrap mortgages, contract-for-deed, and lease options. For disposition, he flips the order, favoring lease options for flexibility and investor intent, then contract-for-deed for installment sale benefits, and cash sales as a last resort due to immediate tax hits.

A must-listen for tax-smart investing!

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Hans breaks down a real seller financing deal, sharing his upgraded Deal Evaluator 2.0 and a multi-option Letter of Intent (LOI) for a high-equity absentee owner lead. Starting with a $100,000 cash offer, Hans pivots to four seller financing proposals, ranging from $132,000 to $160,000, with down payments of $6,000–$10,000, terms of 5–7 years, and a principal-only 0% interest option. He walks through inputting numbers into the Deal Evaluator, calculating front-end expenses ($13,500), holding costs ($6,000), and private money lending costs ($1,500), projecting a $527/month cash flow and $45,000 net profit over five years. The principal-only offer could nearly double profits to $90,000 by minimizing interest.

Learn how to craft compelling LOIs and analyze deals for maximum returns!

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Hans tackles viewer questions from YouTube comments, diving deep into critical subject-to (Sub2) real estate topics. He addresses a key concern: what happens if the seller passes away in a Sub2 deal? With proper paperwork like a deed, third-party authorization, and limited power of attorney, your investment is secure, eliminating liability concerns. Hans also discusses wholesaling Sub2 deals, advising caution due to potential long-term seller contact. He explains setting up autopay for mortgage payments using the seller’s login credentials and a business checking account, minimizing lender interaction. Other topics include handling HOA restrictions via title company documents and bylaws, contacting foreclosure trustees without raising red flags, and calculating passive income needs (e.g., 10 deals at $400/month for $4,000 monthly). 

A must-listen for Sub2 investors!

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Hans takes you inside a live phone call with a subject-to seller, demonstrating how to navigate objections and clarify the Sub2 process. The seller, an out-of-state homeowner with a low-equity expired listing, mistakenly believes Hans proposed a formal loan assumption. Hans calmly corrects this, explaining that Sub2 involves a non-qualifying assumption, taking title while leaving the FHA loan in place, secured by third-party authorization and limited power of attorney. Facing the classic objection—“What if you stop making payments?”—Hans responds with brutal honesty, emphasizing his financial stake and track record of never missing payments on over 30 loans. The seller, planning to relist but open to a Plan B, requests a preliminary contract for his attorney to review, which Hans confidently agrees to provide.

A masterclass in handling Sub2 negotiations with transparency and finesse!

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Hans dives into his first real estate investment, a BRRRR (Buy, Rehab, Rent, Refinance, Repeat) deal in St. Louis, and compares it to his first subject-to (Sub2) deal to reveal why creative finance became his go-to strategy. Purchased for $52,500 cash with a $20,000 rehab, the BRRRR deal required months of hands-on work—skim coating walls, painting cabinets, and replacing flooring—only to refinance $60,000, leaving equity untapped. The process took six months, demanded tenant management, and taught Hans the limits of scalability. In contrast, his first Sub2 deal required 1/20th the effort, no personal funds, minimal rehab, and delivered cash flow within 30 days via seller financing.

Learn why Sub2’s velocity, low maintenance, and third-party servicing make it a game-changer for building wealth faster!

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Hans shares a powerful, cost-free strategy for finding subject-to deals by targeting for-sale-by-owner (FSBO) listings on platforms like Zillow, Facebook Marketplace, and Craigslist. Learn how to scrape FSBO leads using Zillow’s “by owner” filter, compile property details into a spreadsheet, and leverage tools like PropStream for equity estimates. Hans unveils his FSBO workflow template, a systemized text message sequence to engage sellers without wasting time, starting with a friendly inquiry and escalating to a bold creative finance offer (e.g., taking over mortgage payments). With a 7-day delay to avoid the realtor frenzy and persistent follow-ups, this episode equips you to uncover motivated sellers and land profitable deals on a budget!

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Hans reveals his battle-tested creative finance sales script for closing subject-to and seller-financing deals. This episode breaks down the five key pillars to qualify leads: property condition, seller motivation, timeline, price, and encumbrances (liens or mortgages). Learn how to initiate conversations, whether cold-calling, following up on expired MLS listings, pre-foreclosures, or for-sale-by-owner properties. Hans shares techniques like mirroring, asking non-intrusive questions, and presenting lowball cash offers to pivot to sub2 offers, ensuring sellers feel heard and in control. From probing for motivation to securing mortgage details, this script guides you to identify motivated sellers and structure win-win deals. A game-changer for creative real estate investors!

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Hans unveils his 7-step master plan for subject-to real estate investing, a proven blueprint for generating massive cash flow and backend equity spreads with creative finance. Extracted from his Complete Beginner’s Guide to Creative Real Estate Investing course, this episode breaks down the process: 1) Generating leads through persistent marketing, 2) Managing leads to identify motivated sellers, 3) Quickly evaluating deals with comps and calculators, 4) Securing contracts with minimal earnest money, 5) Thoroughly assessing deals with professional inspections, 6) Closing efficiently with proper sub2 disclosures, and 7) Exiting via lease-options or seller financing for passive income. A must-listen for scaling a profitable portfolio with minimal hassle!

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Hans dissects his eighth subject-to deal, a pre-foreclosure gem that netted $110,000 without any rehab! Purchased for $163,500 ($140,000 loan at 2.625%, $13,000 arrears, $6,000 to seller), this vacant property was sold on a land contract for $209,000 with a $17,000 down payment, leaving Hans $4,000 out-of-pocket. The deal generates $425 monthly cash flow via an interest rate arbitrage (6.13% buyer rate) and boasts a $50,000 backend spread. By year 10, total profit hits $110,000, showcasing the power of creative finance with minimal effort—just a U-Haul to help the motivated seller move!

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Hans interviews Scott Winklemann, a St. Louis investor who transitioned from traditional landlording to creative finance, crushing it with three subject-to deals. Scott shares his journey from holding a rental for 10 years to diving into sub2 with a 50/50 equity partnership deal with Hans, yielding a 39% ROI on $9,000 invested after a $15,000 down payment. His second deal, a remote pre-foreclosure in Lebanon, MO, secured a 3.375% loan with $500 monthly cash flow after a $6,000 option fee, despite $14,000 in potential arrears. The third, another pre-foreclosure, involved a distressed seller with zero equity; Scott closed for $2,300 out-of-pocket, aiming for $770 monthly cash flow on a $200,000 property. A masterclass in creative finance success!

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Hans unveils the power of amortization in creative finance, showcasing a property taken back from a distressed seller-finance buyer who faced personal challenges. Originally purchased subject-to with a $103,000 balance after a $7,000 down payment, the deal generated $825 monthly payments, yielding nearly $16,000 in interest income over two years while only $1,287 went to principal. By resetting the amortization clock with a new lease-option or seller-finance buyer, Hans can restart the interest-heavy payment structure, mimicking how banks profit. This strategy, despite sacrificing long-term appreciation, delivers passive income and flexibility, making it a game-changer for sub2-wrap deals in stable markets!

Watch at YouTube.com/Sub2Investor and explore the Complete Beginner’s Guide to Creative Real Estate Investing at https://www.sub2investor.com/!

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