Deal Structures

  1. Cash Offer (Straight Close)
  2. Assignment of Contract
  3. Double Close (A-B / B-C)
  4. Seller Financing (Owner Carry)
  5. Subject-To (Taking Over Existing Debt)
  6. Wrap Mortgage (AITD)
  7. Land Trust / Deed in Trust
  8. Lease Option (Rent-to-Own)
  9. Novation Agreement
  10. Equity Share / Joint Venture
  11. Installment Sale / Land Contract
  12. Mortgage Assumption
  13. Short Sale
  14. Master Lease Option

Match the Deal to the Seller

If the seller...Offer this structure
Needs speed / is in distressCash offer or Subject-to
Is underwater / facing foreclosureShort sale or Subject-to
Wants monthly incomeSeller finance or Wrap
Wants income + stays on titleInstallment sale / land contract
Has a 3% FHA or VA loanMortgage assumption
Is emotionally attached / not readyLease option or Master lease
Wants full price you can't paySeller finance with balloon
Wants upside from renovationEquity share / JV
Needs privacy or has probate issueLand trust
Already under contract, needs outNovation agreement
Has underperforming rental propertyMaster lease option

1. Cash Offer

WholesaleFastest closeLowest price

What it is: Wholesaler gets the property under contract at a discounted price, then assigns that contract to a cash buyer for an assignment fee. Seller receives agreed price at closing, no banks, no repairs, no contingencies.

How to structure it

  1. Negotiate below-market purchase price (typically 60-75% of ARV minus repairs).
  2. Sign a purchase and sale agreement with an assignability clause.
  3. Find a cash buyer willing to pay more than your contract price.
  4. Assign the contract to the buyer for your fee (typically $5K-$30K+).
  5. Title company closes. Seller gets paid. You collect your fee at closing.
Who it's for: Sellers in distress, facing foreclosure, probate or divorce, tired landlords, or anyone who values speed over top dollar.
"We can close in 7 to 14 days, as-is, no repairs, no showings, no contingencies. You walk away clean with cash in hand."
Pro tip: Justify the discount by itemizing estimated repair costs, holding costs, and your fee in a simple written breakdown. Transparency builds trust and reduces pushback on price.

2. Seller Financing (Owner Carry)

CreativeMonthly incomeTax spreading

What it is: Seller acts as the bank. Instead of a lump sum, seller holds a promissory note and receives monthly principal and interest payments. Deed transfers at closing; seller holds mortgage or deed of trust as security.

How to structure it

  1. Agree on purchase price (often at or above market to compensate for carrying the note).
  2. Negotiate terms: rate (4-8%), amortization (15-30yr), balloon (3-10yr common).
  3. Sign a promissory note and a mortgage or deed of trust.
  4. Title company closes. Deed transfers to buyer. Seller recorded as lienholder.
  5. Buyer makes monthly payments to seller (or via loan servicing company).
Who it's for: Sellers who own free and clear or have significant equity. Retirees wanting steady income, sellers spreading capital gains, anyone who doesn't need a lump sum immediately.
"Instead of a one-time check eaten by taxes and fees, you become the bank. Monthly income, your own interest rate, avoid the big tax bill, and you get more money overall."
Pro tip: Offer above asking in exchange for favorable terms. A seller may refuse $200K cash but accept $235K financed at 5% over 20 years. Run the numbers to show how much more they make over time.

3. Subject-To (Taking Over Existing Debt)

CreativeNo new loanDoS risk

What it is: Buyer takes deed to the property while existing mortgage remains in seller's name. Buyer makes mortgage payments going forward. The loan is not assumed or refinanced - it stays as is.

How to structure it

  1. Confirm existing loan: balance, rate, monthly payment, payment current?
  2. Negotiate small cash-to-seller amount ($1K-$10K) for equity or arrears.
  3. Seller signs warranty deed to buyer (or into a land trust for privacy).
  4. Buyer begins making existing mortgage payments directly to lender.
  5. Use a loan servicing company to document payments.
Who it's for: Sellers behind on payments, facing foreclosure, underwater. Also sellers with low-rate loans who want payment relief without a traditional sale.
"We take over your payments and the deed transfers to us. Your credit is protected because we're making the payments. You walk away from the financial burden."
Pro tip: Address due-on-sale head on. Explain that while the clause exists, lenders rarely invoke it on a performing loan. As long as payments are on time, the risk is minimal in practice.

4. Wrap Mortgage (All-Inclusive Deed of Trust / AITD)

CreativeInterest spreadAITD

What it is: A new loan that wraps around the seller's existing mortgage. Buyer makes one payment to seller at a higher rate. Seller continues paying underlying loan and earns the interest spread.

How to structure it

  1. Identify seller's existing loan (balance, rate, monthly payment).
  2. Create a new promissory note with higher principal and higher rate than the underlying loan.
  3. Buyer pays seller monthly. Seller pays their lender. Seller pockets the spread.
  4. Deed transfers; seller holds a wrap mortgage as lienholder.
  5. Use title company + attorney. Most common in AITD states.

Example: Seller owes $150K at 3.5% ($674/mo). Buyer pays seller on $220K at 6% ($1,319/mo). Seller pockets $645/month spread.

Who it's for: Sellers with low-rate existing mortgages who want higher sale price plus monthly income. Best in high-interest environments.
"We make one payment to you each month at a higher rate. You keep paying your lender at your low rate and keep the difference. Passive monthly income on top of a higher sale price."
Pro tip: Show the monthly spread in writing. Sellers who see $500-$800/month extra for years become very interested.

5. Land Trust / Deed in Trust

PrivacyDoS shieldProbate avoidance

What it is: Property is deeded into a land trust with trustee holding legal title. Beneficial interest (which controls the property) is held by beneficiary and transferred privately without a recorded deed change.

How to structure it

  1. Create a land trust agreement naming a trustee (title company, attorney, or trusted third party).
  2. Seller deeds property into the trust. Trustee holds legal title.
  3. Seller is initially named as beneficiary.
  4. Investor acquires beneficial interest via assignment of beneficial interest (not recorded publicly).
  5. Investor now controls the property + income without a public ownership change.
Who it's for: Privacy-conscious sellers, probate estates, investors doing subject-to who want to reduce DoS risk, sellers with judgments who need separation from the asset.
"The property goes into a trust with your name off the public record. Protects your privacy, avoids probate headaches for your family, and you stay in control."
Pro tip: Almost always combined with subject-to. The trust obscures ownership transfer, reducing DoS trigger risk. Always consult a state-specific real estate attorney.

6. Lease Option (Rent-to-Own)

CreativeLow capitalSandwich

What it is: Investor leases the property from seller and receives option to purchase at set price within a time period. Investor can exercise, assign to end buyer, or sublease for cash flow (sandwich lease).

How to structure it

  1. Sign a lease agreement with seller for a set monthly rent.
  2. Pay upfront option consideration ($1K-$10K) for exclusive right to buy.
  3. Set option price and term (typically 1-3 years).
  4. Sublease to a tenant-buyer who pays higher rent + their own option fee (sandwich profit).
  5. At term end: exercise, assign to tenant-buyer, or renegotiate.
Who it's for: Sellers reluctant to sell outright, not in immediate distress, who want top dollar but the market is not there yet. Also useful for emotionally attached sellers needing time to transition.
"We lease it right now so you have guaranteed monthly income with no landlord headaches. We handle maintenance and management. You lock in your sale price today."
Pro tip: Frame as a trial period for sellers who aren't sure. They keep control, get income, have a guaranteed exit. Removes the emotional resistance to committing to a sale.

7. Novation Agreement

WholesaleClean releaseStrict-disclosure states

What it is: A novation replaces one party in an existing contract with a new party. Original seller is fully released; investor steps into their position, closes with the end buyer, profits from the spread.

How to structure it

  1. Seller is under contract with a buyer (or investor creates a new contract directly).
  2. Novation agreement drafted + signed by original seller, investor, and end buyer.
  3. Original seller completely released from all obligations.
  4. Investor is now seller of record and closes with end buyer.
  5. Profit from difference between original-seller price and end-buyer price.
Who it's for: Sellers already under contract but need out (divorce, probate, financial emergency). Also used in strict wholesaling-disclosure states where assignment triggers disclosure.
"We step into your shoes on the existing contract. You're completely released - no liability, no obligations. We handle the closing and you get paid your agreed amount."
Pro tip: Requires consent from all parties (unlike simple assignment). Cleaner legally in states with strict wholesaling rules since investor becomes actual seller of record.

8. Equity Share / Joint Venture

PartnershipUpside shareRenovation-heavy

What it is: Seller retains a percentage of equity. Investor funds renovations, manages project, handles eventual sale. Profits split per agreed equity split at sale or refinance.

How to structure it

  1. Agree on seller's equity % (typically 20-40%) and investor's share (60-80%).
  2. Define responsibilities in a JV agreement.
  3. Determine exit strategy (flip, BRRRR, future sale).
  4. Title transferred to an LLC or held jointly per JV agreement.
  5. At exit, distribute per agreed split after costs + investor capital recovered.
Who it's for: Sellers with properties needing significant work and current value well below ARV. Sellers who believe in the upside or are emotionally attached and want to benefit from future profit.
"You keep a piece of the upside. We do all the work - renovations, management, sale. When we sell, you get your share of the profit. You do nothing and still win."
Pro tip: Use a pro forma showing projected post-repair numbers. Compare their share of JV profit vs. straight cash offer. The gap is often significant enough to make this very attractive.

9. Installment Sale / Contract for Deed (Land Contract)

CreativeSeller keeps titleMidwest common

What it is: Like seller financing but seller retains legal title until buyer has paid in full. Buyer receives equitable title + possession but no deed until loan is paid off or balloon is made.

How to structure it

  1. Agree on price, rate, monthly payment, balloon date.
  2. Draft a land contract / contract for deed outlining terms.
  3. Buyer takes possession and begins monthly payments.
  4. Seller retains deed and remains legal owner.
  5. Upon final payoff or balloon, seller delivers deed to buyer.
Who it's for: Sellers who want security of seller financing but are not comfortable handing over the deed before being paid in full. Works best in states where land contracts are common (Midwest especially).
"You get monthly payments directly with no banks. And you stay on title until we pay you in full. If we ever stop paying, you keep what's paid and get the property back. Most protected version of seller financing."
Pro tip: Often the easiest seller-finance pitch because seller never loses legal control. Lead with the protection angle, then income + tax benefits.

10. Mortgage Assumption

FHA/VA onlyLow-rate arbitrageLender approval

What it is: Buyer officially assumes seller's existing government-backed mortgage (FHA or VA) with lender approval. Seller released from liability; buyer takes over existing balance + rate.

How to structure it

  1. Confirm loan is FHA or VA (only widely assumable types today).
  2. Submit assumption application to lender. Buyer must qualify.
  3. Lender approves. Seller released from personal liability.
  4. For VA loans, seller applies for substitution of entitlement to restore VA entitlement.
  5. Closing, deed transfers. Buyer takes over existing payment at original rate.
  6. If property worth more than loan balance, buyer covers gap (cash, 2nd, or seller carry).
Who it's for: Sellers with FHA or VA loans originated at 2.5-4%. End buyers pay a premium to inherit below-market rate.
"Your low interest rate is an asset right now. We can assume your loan with lender approval, release you from liability, and you get a higher price because buyers will pay more to keep your rate."
Pro tip: Assumption takes 60-90 days. Offer above asking to compensate for the wait. Market the assumed rate aggressively - monthly savings vs. current-rate mortgage can be $400-$1,000+/month.

11. Short Sale

Distressed onlyLender approvalSlow

What it is: Investor negotiates with seller's lender to accept less than the full loan payoff as a complete settlement. Seller avoids foreclosure and walks away debt-free.

How to structure it

  1. Confirm seller is underwater and has genuine financial hardship.
  2. Gather short sale package: hardship letter, financials, bank statements, tax returns, CMA.
  3. Submit package to lender's loss mitigation dept with purchase offer at or below current value.
  4. Lender reviews (30-90+ days), orders BPO/appraisal, counters or approves.
  5. Upon approval, close at lender-approved price. Lender releases lien. Deficiency should be forgiven in writing.
  6. Investor profits through assignment, flip, or hold.
Who it's for: Sellers deeply underwater, facing foreclosure, experiencing hardship (job loss, medical, divorce, death). Nothing to lose, foreclosure to avoid.
"We negotiate directly with your lender to accept less than you owe as full payoff. You walk away debt-free, no foreclosure on your credit, no deficiency chasing you. Costs you nothing."
Pro tip: The hardship letter is critical. Help the seller write a compelling, honest one. Confirm the approval letter explicitly waives deficiency judgment rights.

12. Master Lease Option

Multi-familyForced appreciationNo-money-down

What it is: Investor leases an entire property (usually multi-family or commercial), takes operational control, improves NOI by filling vacancies and raising rents, then exercises purchase option at original price - capturing forced appreciation.

How to structure it

  1. Negotiate master lease covering entire property (monthly payment + term 2-5 years).
  2. Negotiate purchase option at today's value. Lock the option price.
  3. Pay option consideration (1-3% of option price) for exclusive right to buy.
  4. Take over all operations: fill vacancies, renovate, raise rents to market, reduce expenses.
  5. Once stabilized, exercise the option at locked price (well below new value) OR sell the option to another investor.
Who it's for: Tired landlords with underperforming multifamily/commercial, burned out on management but not ready to sell at a discount. Also owners who owe too much to sell cheap but want operational relief.
"We take over everything - management, maintenance, tenants, all of it. You receive consistent monthly income without lifting a finger. We improve at our expense and have the option to buy at today's price. Your only job is to cash the check."
Pro tip: Show a pro forma of stabilized income. Even buying at today's price, seller sees the property will be in better shape and gets a clean exit at fair number while you take all risk.

Universal Seller Pitch Framework

  1. Diagnose before you prescribe. Ask questions first. What's their timeline? What do they owe? Why are they selling? What's a perfect outcome? The structure should answer their problem, not a pre-packaged pitch.
  2. Solve their problem, not yours. Never lead with investment angle. Lead with how the structure solves their pain (speed, taxes, income, privacy, debt relief, mgmt headaches).
  3. Make the math visual. Write numbers down in front of them. Compare scenarios. Show what a traditional sale nets after commissions, taxes, repairs vs. your structure. Let the comparison sell.
  4. Address risk head on. Every structure has risk for the seller. Acknowledge it before they bring it up, then explain mitigation. Sellers who feel you're hiding something walk away.
  5. Attorney review is mandatory. These structures are legal and widely used but must be documented correctly. Always use a licensed attorney and title company.

For educational purposes. All real estate transactions should be reviewed by a licensed real estate attorney in the applicable state before execution.