Hans reveals why lease-options are his go-to exit strategy for creating passive income this 2025.

Combining a lease agreement with a separate option-to-purchase contract, lease-options shine for: 1) Testing tenant-buyers for reliable payments, 2) Securing 3-5% option fees for skin in the game, 3) Allowing evictions for non-payment (unlike seller financing), 4) Enabling fast deal execution, 5) Avoiding closing costs, 6) Being easy to explain to buyers, 7) Using simple paperwork, 8) Aligning with tax strategies for investment properties, 9) Supporting installment sale tax benefits, and 10) Deferring taxes on option fees until exercised or forfeited.

Learn why lease-options pair perfectly with subject-to acquisitions for massive cash flow!

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Hans shares his journey to Level One Financial Independence—covering basic expenses with passive income—in just 2.5 years through creative real estate investing.

Inspired by Bigger Pockets, he initially aimed for 20 long-term rentals to generate $4,000/month but found them unreliable due to vacancies and maintenance. Shifting to subject-to deals and selling via seller financing or lease options, Hans built a portfolio of 30 deals, averaging $400/month each, yielding over $12,000/month in passive cash flow.

By focusing on A/B-class properties, sacrificing short-term wholesale/flip income, and leveraging mentorship, he achieved financial freedom.

Learn how to calculate your FI number and take calculated risks!

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Hans dives into a real subject-to deal in a rural area, breaking down how he turned a low-equity "clean grandma's house" into a projected $64,000 profit over 10 years.

Sourced from a field agent’s delinquent loan list (and nearly from an expired MLS listing), this $80,000 FMV property (ARV $120,000) had a $74,000 loan at 5.125% with no PMI.

With $12,000 upfront (closing, cleaning, $6,500 arrears), Hans sold it on a contract for deed for $110,000 at 8.25% with a $9,000 down payment, yielding $380/month cash flow and a 126% cash-on-cash return after 9.5 months.

The mistake? Setting the interest rate too low—9.95% could’ve boosted profits to $81,000. 

Learn why clean properties, strategic marketing, and higher rates matter! 

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Hans shares a powerful mindset hack that transformed his real estate business: a visualization exercise inspired by investor Cameron Cathcart.

Struggling with distractions and pivoting between strategies (wholesaling, rentals, seller financing), Hans adopted this daily routine to stay focused.

Close your eyes, imagine being lifted to Earth's orbit, then transported to your dream home 10 years from now. Meet your future self, explore their life, and ask: What steps got you here? What should I do now? This introspection helped Hans set clear 1-, 5-, and 10-year goals, prioritize hiring a team, take calculated risks, and seek mentorship for his subject-to deals. 

Learn how to refine your vision and stay authentic to your goals!

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Hans shares a real cold call to a real estate agent that led to a successful subject-to deal on an on-market property!

Listen as he breaks down the conversation, explaining how he builds credibility, cuts to the chase with a creative offer, and addresses the seller’s debt-to-income (DTI) concerns with a mirror wrap (non-qualified assumption).

Despite initial resistance (the seller wanted a formal VA loan assumption), Hans persisted, sent a formal offer with subject-to addenda, and closed the deal months later at a reduced 3% commission after the property sat unsold.

Learn tips for targeting on-market listings, handling agent objections, and following up post-open house.

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Hans walks through a live subject-to deal analysis in Houston using his upgraded Deal Evaluator (v6.0)!

This $240,000 ARV home has a $230,000 loan balance (4% interest, $1,785 PITI) with $14,000 cash to the seller, $5,000 closing costs, and $1,000 repairs, totaling $20,000 upfront. Hans estimates a $264,000 seller-financed sale with an 8% down payment ($21,200) at 8.5% interest, yielding $769/month cash flow and a 47% cash-on-cash return if self-funded.

With a $35,000 equity partner (50/50 split, $21,200 returned), Hans achieves an infinite ROI, while the partner gets a 23% return on $11,586 left in the deal. Best-case scenario (10% down, 10% interest, 3-month hold, no agent): $621/month cash flow and near-infinite partner return! 

Learn Hans’ ARV estimation (Realtor.com, Zillow, PropStream) and pre-foreclosure targeting tips.

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Hans breaks down a subject-to deal that delivered an infinite cash-on-cash return by partnering with a private money lender!

This pre-foreclosure deal required $25,000 to catch up $18,000 in late payments and fund $7,000 in rehab for a $120,000 home. By structuring a 50/50 equity partnership via a land trust, Hans’ LLC and the partner’s LLC split profits, with the partner contributing $25,000 and recouping $15,000 from a buyer’s down payment, leaving $10,000 in the deal.

Sold on a land contract for $135,000 at 9.83%, it generated $584/month cash flow ($292 each after split), yielding a 35% return for the partner and infinite ROI for Hans.

Bonus: Learn Hans’ secret for targeting pre-foreclosure absentee owners to land deals!

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Hans shares his proven process for screening tenant-buyers for rent-to-own and seller-financing deals on subject-to properties.

Learn how to pre-screen candidates via phone to save time, focusing on their rental history, employment stability, credit patterns, and landlord references. Discover key red flags like evictions or frequent job changes, and why credit scores matter less than consistent rent payments. Hans previews his rent-to-own application, emphasizing verification through bank statements, Zelle screenshots, and landlord reviews.

Stay tuned for a follow-up on seller-financing screening!

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Hans tackles the tricky topic of when and how to disclose subject-to risks to sellers, like the due-on-sale clause and the loan staying in their name.

Learn from his mistakes—overdisclosing too early and losing deals, or underdisclosing and surprising sellers at closing. Hans shares his five-step disclosure process: initial talks, purchase agreement, addendum, pre-closing emails, and closing documents.

See his purchase agreement and due-on-sale disclosure statement, plus tips on using video-recorded exit interviews to protect all parties.

Get his free purchase agreement and subject-to closing packet at https://www.sub2investor.com/!

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Hans dives into a real subject-to deal, his 13th, showcasing a 69% cash-on-cash return!

This two-bedroom St. Louis home was acquired for $114,000 via text message marketing, with a $103,000 loan balance at 5.125% and $11,000 cash to the seller. With $5,000 in minor rehab (paint, deep cleaning, landscaping) and $1,000 in closing costs, Hans invested $17,000 total.

A lease-option tenant-buyer paid $10,000 down, leaving $7,000 in the deal, with a $400/month cash flow spread ($1,300 lease payment vs. $900 mortgage). The back-end spread is $24,000, projecting $76,000 profit over 10 years.

Learn why two-bedroom homes are tougher to market and how to underwrite deals for comps and buyer expectations.

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Hans reveals his top strategy for finding tenant-buyers and seller-finance buyers for subject-to and creative finance deals!

Learn how to use bandit signs effectively to generate leads for lease-options and seller-financed properties. Hans shares real-world examples, including sign placement tips near schools, shopping centers, and high-traffic areas, plus pro tips on messaging ("rent-to-own" vs. "seller financing") and CRM use to track leads.

See actual signs and video clips of strategic placements that drove hundreds of calls in just two weeks!

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Join Hans and first-time subject-to investor Ray as they unpack a creative finance gem! Ray, a Seattle-based real estate photographer, snagged his first subject-to deal in Grand Rapids, Michigan, through a 17-year friendship forged in online gaming. This hybrid deal—$205,000 purchase price, $125,000 subject-to loan at 3%, $40,000 cash down, and $40,000 seller-financed (0% interest, $15,000 15-year balloon, $25,000 due in 30 years)—required $50,000 in rehab but promises equity and cash flow.

Learn how Ray navigated paperwork, title companies, and due-on-sale risks with Hans’ mentorship, turning a casual conversation into a win-win deal. Discover tips for finding motivated sellers and why creative financing beats conventional loans.

Connect with Ray at pnwvisuals.com or @pnw_vis on Instagram.

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Join Hans and creative finance guru Bill Walston as they dive into lease-options and master lease-options! With over 40 years of experience, Bill shares why lease-options are perfect for low-risk acquisitions in shaky markets and hands-off dispositions.

Learn how to structure deals with minimal upfront cash, avoid tax pitfalls, and manage risks remotely. Discover insider tips on paperwork, option fees, and tenant screening to maximize profits. 

Tune in for actionable strategies at https://www.sub2investor.com/!

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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. 

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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.

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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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