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!

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Hans shares the exciting story of reclaiming a former rental property with a stellar 3.65% subject-to loan, originally sold on seller financing. The end buyer, now out-of-state and overwhelmed by remote management, is returning the property via a mutual release and quitclaim deed. Instead of cashing out the equity, Hans plans to rinse and repeat by placing the current tenant on a lease-option, collecting an upfront option fee and setting them up for potential seller financing down the line. This strategy preserves the low-rate loan, maximizes cash flow, and could reset the amortization clock for even more interest income. A brilliant example of creative finance in action!

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Hans tackles the burning question: Is subject-to (sub2) investing legal? He dives into the HUD-1 Settlement Statement, the official U.S. government document for real estate closings, highlighting lines 203 and 503, which explicitly account for "existing loans taken subject to." These line items confirm that buying a property while leaving the seller’s loan in place is a legitimate practice, whether it’s a mortgage, mechanics lien, or HOA assessment. Hans shares this critical insight from his new course, The Complete Beginner’s Guide to Creative Real Estate Investing, equipping listeners with the confidence to address skeptics and close sub2 deals like a pro!

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Hans breaks down his eighth subject-to deal—an off-market, pre-foreclosure 2-bedroom ranch acquired through a cold text campaign.

The numbers:

▪️Purchase Price: $165,816

▪️ Existing Loan: $144,312 @ 2.65%

▪️ Arrears: $15,000

▪️ Paid to Seller: $6,000

He flipped the property on seller financing at 6.8%, generating $425/month in cash flow and a 4% arbitrage spread. Also shares the HUD and property video, which helped the absentee seller relocate.

Takeaway: Could’ve charged closer to 10% interest for stronger note resale value.

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“Originally recorded in 2024, Hans shares his goal-setting process that helped him crush a modest seven-year plan ahead of schedule…”

Drawing from his journey from academia to creative finance, he reveals a laughably modest seven-year plan from 2019 that aimed for 20 properties by 2025—achieved by 2022 through subject-to deals!

Hans emphasizes setting realistic yet ambitious goals across business, personal, health, family, and spiritual categories, reflecting annually with his wife to stay focused. He urges listeners to carve out time in a calm setting, like a coffee shop, to outline one-, five-, and ten-year plans, starting with attainable steps like joining a mentorship or contacting sellers. With quotes from Proverbs and Seneca, Hans inspires action with a "ready, fire, aim" approach to drive success!

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Hans dissects the numbers behind his seventh subject-to deal, a condo with a $75,000 ARV purchased for $53,000 ($52,000 loan at 3.125% over 40 years, $1,000 to seller). Despite $14,000 in rehab and $2,000 in holding costs, a $10,000 option fee from a lease-option tenant buyer left Hans $6,000 out-of-pocket. With a $950 monthly rent and $350 PITI, the deal nets $450 monthly cash flow after paying a 25% equity partner $150/month. This yields a stunning 90% cash-on-cash ROI, with a projected $74,415 backend profit after 10 years. A masterclass in turning a negative-equity deal into a cash-flowing powerhouse!

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Hans walks through the critical process of filling out the purchase price section of his battle-tested subject-to purchase contract, using a real deal from his mentorship program. For a property with a $303,000 fair market value and a $267,387 loan balance at 5.5%, Hans details how to allocate $100 earnest money, $267,387 for the subject-to loan, and $10,000 cash to the seller, totaling a $277,487 purchase price. He shares pro tips, like using seller-finance terms to incentivize timely move-outs, ensuring clarity and protection for all parties. Get a free copy of his contract by reaching out and learn to structure sub2 deals like a pro!

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Hans introduces his powerful new calculator for analyzing subject-to deals, walking through a real example from his mentorship program. For a property with a $303,000 fair market value and a $267,387 loan balance at 5.5%, Hans inputs $25,000 in upfront costs (realtor, seller, closing costs) and projects a seller-finance exit at $318,150 with a 10% down payment. The deal yields $968 monthly cash flow, a 245% cash-on-cash return, and a $147,359 profit over 10 years, with all cash recouped in just 4.88 months. Learn how to crunch numbers precisely and adjust variables to make informed offers on creative finance deals!

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No giant renovation budget? No problem. Hans shows how to take a tired Subject-To property and turn it into a cash-flowing asset using minimal cash, sweat equity, and creative cost-cutting. From sourcing discounted materials to leveraging “work-for-credit” contractor deals, this episode is packed with strategies for keeping rehab expenses lean while maximizing value.

Deal Snapshot:

▪️ Purchase Method: Subject-To via Land Trust

▪️ Wholesale Fee Paid Upfront: $0

▪️ Rehab Budget: ~$8,500 + Sweat Equity

▪️ Rehab Strategy: Discounted surplus materials + bartered labor

▪️ Net Monthly Cash Flow: ~$500

▪️ Loan Terms: 3.25% fixed, ~27 years remaining

▪️ ARV Boost: +$30K after improvements

▪️ Back-End Potential: ~$28K from future sale

💡 Key Lesson: You don’t need a big rehab fund to make a Subject-To deal shine—resourcefulness, negotiation, and creative labor arrangements can stretch every dollar and protect your cash flow.

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