Creative Finance
The deals other agents refer out.
Subject-to. Seller financing. Wraparound. Lease-option. These are not exotic — they are the tools that work when conventional math doesn't. Plain-language explanations below. Real numbers in the Deal Stacker.
BUYER TOOL
Subject-To (Sub-2)
Buyer takes over the seller's existing mortgage payments — the loan stays in the seller's name, the deed transfers to the buyer. The buyer inherits the existing interest rate.
When it fits
Seller is behind on payments, motivated to exit fast. Buyer wants to inherit a below-market rate.
Watch out for
Due-on-sale clause: lender can call the loan. Requires experienced execution.
BUYER + SELLER TOOL
Seller Financing (Seller Carry)
Seller acts as the bank. Buyer makes payments directly to the seller at a negotiated rate. No traditional lender required.
When it fits
Seller owns free-and-clear or has significant equity. Buyer has good income but hard-to-document or high DTI.
Watch out for
Seller takes on credit risk. Note terms require attorney review.
ADVANCED
Wraparound Mortgage
Seller keeps their existing loan but "wraps" a new, larger loan around it for the buyer. The seller collects the buyer's payment and services their underlying mortgage from it — pocketing the spread.
When it fits
Seller has a low-rate underlying loan. Both sides want to capture the rate differential.
Watch out for
Triggers due-on-sale on the underlying loan. Requires expert structuring + legal review.
BUYER TOOL
Lease-Option
Rent now with the contractual right to buy at a preset price within a defined window. A portion of rent may credit toward the purchase price.
When it fits
Buyer is 12–24 months from conventional qualification. Wants to lock price now, close later.
Watch out for
Option fee at risk if buyer doesn't exercise. Price lock can work against buyer in down markets.
Dodd-Frank / SAFE Act disclaimer: For educational purposes only. Quan Zou is a California licensed realtor (DRE#), not a licensed mortgage originator. The content above is educational and does not constitute financial, legal, or loan origination services. Consult a licensed attorney and financial advisor before structuring any creative finance transaction.