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San Diego Lease Options and Subject To's (aka "Getting the Deed") are two very popular ways to purchase San Diego real estate with little or no money down. Acquiring San Diego investment real estate can be handled with many different approaches, but these two techniques can be implemented with little or no money down in most incidences.

A lease option is a technique which involves gaining 'control' of a San Diego property, but not owning it. It is the right to possess a property now and purchase that property at some future date with terms you define when you buy it.

A "Subject To" is getting the deed to a property without getting a mortgage for the home. Instead, the seller signs over the deed to his home 'subject to' the existing mortgage. The buyer in this case makes the mortgage payments on the old loan, but does not need to get a new mortgage (or ask for approval through an assumption of existing mortgages) to acquire this home.

Both of these techniques usually require little or no money down. In both of these techniques it is possible for the buyer to get money from the seller or the purchaser (or both!) in the beginning of the transaction. These techniques, when used properly, will provide for huge profits. They are both awesome, and when used hand-in-hand by investors are almost an unbeatable pair!

Why Knowing Both Techniques Means More Great Deals For You!

I can't tell you how many times I have heard, "If I don't get the deed, I don't do the deal". With over 20 year's of experience (since 1985) doing both types of deals, I have to disagree with that statement. The more tools and techniques and ways you have to purchase property or to structure a deal, the more likely you will be able to work with a motivated seller to come to a potential solution. If you only buy "Subject To", you'll walk away from a LOT of great deals in your real estate career, but you must know when each technique is appropriate to use. Finding a motivated seller is the first step to any good real estate deal.

There are many types of motivated sellers, but we tend to think of motivated sellers as the ones that are financially distressed. I like to look at motivation from a much wider range. Let me explain. I like to divide motivated sellers into two groups: Situation Sellers that have Bad Debt Solution Get the Deed NO Lease Option! VS. Situation Sellers that have Good Debt Solution Lease Option or Get the Deed!

Sellers that have "Bad Debt" are those in financial trouble. They might be behind on a mortgage (in foreclosure), have lost their job, acquired an illness, going through a divorce, etc. In these situations, you need to get the deed either with a Subject To or an outright purchase. Your main concern is that this type of seller will continue to have financial problems that could affect the title to "your" property if the deed is still in their name. For example, if this seller gets judgments from creditors, they can attach to any real estate the seller owns - they will have to be paid off before you can exercise your option to buy. That's why you want to get this type of seller off of the title. Sellers that have "Good Debt" are those NOT "in trouble" in the traditional sense, but they do have a reason motivating them to sell. Their problem is not one of financial desperation.

California law prevents a California real estate agent from representing buyer/investors in the case of purchasing a foreclosed property under certain circumstances. While we always recommend that to completely understand your rights as a foreclosure buyer, you should contact a local real estate lawyer, the following article explains the basics. The first thing you must realize is that in California, a real estate agent CANNOT represent a buyer who is an investor to purchase a foreclosure property if all of the following four statements are true:

• The home qualifies as the seller's personal residence.
• The property is a single family home or 2 to 4 units.
• A Notice of Default has been filed in the public records against the property.
• The investor buyer will not occupy the property.

Now, if any of those four statements are false, a California Realtor is allowed to represent the buyer. However, if a real estate agent is representing an investor, the agent is required to post a bond, and no such bond is available in the state of California. Therefore, pre-foreclosure investors in California must represent themselves.  Think that is a hairy situation?  Foreclosure investors are required to comply with the Home Equity Sales Act and sellers who are in foreclosure have the right to rescind (cancel) a transaction within five days. Investors must give the seller notice of that right, and provide them with a copy of the form that will let sellers cancel.   Failure to comply with the Home Equity Sales Act carries severe penalties, including a provision that gives the seller the right to cancel the sale up to two years after the sale to the investor has closed and get the property back.

Read also: California Foreclosure Laws

Investing in foreclosure bargains is not easy to do; some people make it sound like you simply walk over to the courthouse and make the deal. However, the trick is to purchase the home before someone else makes it his or her investment. Becoming a real estate tycoon is not about what you can afford, or what you are willing to spend, it is about the valuable information that you learn about a property. Research is a key factor to being a successful investing in the real estate industry. Buying homes at San Diego foreclosure auction can make you very large profits.

Some San Diego Real Estate investors earn more than $75K on one transaction or you can buy the San Diego foreclosure or REO property for you and your family to live in and save the money. Conditions have to be right and the situation ideal of course to profit this much on a single property, it is possible though to make a substantial living on San Diego Real Estate investing. There is no better time than now, we are in a buyers market, with the increase in San Diego foreclosures in the US, there is an overwhelming number of San Diego foreclosure and REO "deals" available, you just need to know how to find them.

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The art of a foreclosure deal, can be a thing of beauty if you know how to negotiate a San Diego foreclosure or REO deal. It may not be internationally recognized in the same stream of consciousness as a masterpiece by Renoir, Goya, Monet or Picasso, but a well constructed San Diego foreclosure investment deal can be a masterpiece to those who appreciate the effort that went into it. You need to use a foreclosure Realtor to buy foreclosures and REO's if you want to learn the pros and cons of buying San Diego foreclosure and REO houses and condos.

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What is a Short Sale?

Basically a Short Sale is when homeowners are late with their payments, a notice of default will be issued. They can try to short sale their house. A short sale is usually done when the homeowner does not have enough equity in their home to pay the lender what they owe. If the owner can prove the hardship maybe the lender will forgive the homeowner. The process is tedious and frustrating. Lenders will not return calls. If nothing happen during the short sale, the home will go into foreclosure, This happens within the six months period. Lenders do not like the idea of foreclosure.

Read Also: Short Sale Real Estate Investments: San Diego foreclosures and REO's

San Diego foreclosure and REO investors can benefit from foreclosed homes that are listed on the San Diego foreclosure website due to the quality of the listings that offered, and the amount of research that the San Diego foreclosure Real Estate agents have already done for the buyer. Buying San Diego foreclosures can be fun and easy if you by the right home from the right San Diego Realtor who specializes in San Diego foreclosures and REO's.

San Diego's #1 source for distressed properties: foreclosures, pre-foreclosures, REOs, bankruptcy, FSBO and tax lien listings click here.