In this YouTube discussion, the hosts (Speaker A, Zach, and Chris) explore how to protect an end‑buyer when a seller in a lease‑purchase transaction acquires a lien or judgment that attaches to the property. They explain that liens may be missed in title searches or arise later, and the appropriate response depends on the lien type and the seller’s equity position. The conversation contrasts lease‑purchase deals with subject‑to or owner‑financing arrangements, noting that title transfers only at the end of a lease‑purchase, so any seller equity must be used to cure liens before closing. If the seller has little or no equity, the buyer must negotiate with the lien holder or consider alternative structures, such as buying the property outright on day one or shifting to a subject‑to deal. The hosts also stress the importance of checking state‑specific statutory interest, acting quickly to avoid accrual, and being prepared to pivot when unexpected liens arise. They cite community experience—over 1,000 deals collectively—and share that while liens are rare, they have occurred, underscoring the need for contingency planning and flexible deal structuring.
Chapters
How do you protect end buyer if the seller in a lease purchase gets a lien or a judgment against them that gets attached to the property? Okay, couple open-ended things and Zach, chime in. Chris, couple things. We had this happen. It either didn't show up in the title search we did or it snuck in later. Either one did happen to us. We had to rectify it. So the answer is every deal, there's a deal after deal every time, right? And there's pivots, but it just depends on the type of lien. And we had to get after it and solve it with the owner who was in Afghanistan at the time. That can happen on a lease purchase is my answer, and you got to deal with it.
Also, I mean, part of the factor will be if the seller has equity in the deal and stuff like that as well.
Go ahead, Zach, address that. This is important. Yeah.
Right. Because at the end of the day, eventually the property is going to cash out. And if the seller has equity in the deal and there's a lien, then the seller has to cure that lien at the closing. So the difference between, say, a lease purchase and a subject-to or owner financing is that title transfers at the end of the deal when it's a lease purchase, meaning you're like tying it up with the seller, you get agreement, you're clouding title, and then at the end of the term, that's when the title would transfer to the seller— I mean, to the buyer, because really it's The seller and the buyer come together to close the deal and you're getting an option release. That's how, that's how it's typically written up, something along that, like an option release at the closing. So that if that seller has equity in the deal, they're going to cure that lien at that timeframe in order to provide clear title.
They do have equity like Zach alluded to, and this lien— and check the state that you're in, for example, there'll be statutory mandatory interest. And so behooves them to take care of that sooner than later because it's just going to stack up. Now, if they have zero equity, now you got to negotiate and do the best you can, whether that's with the lien holder or with the seller.
Yeah, that's why you're better off, of course, if there's little equity in it, to go right to a subject-to deal. Now, I understand that if this is your first deal and you don't have support from our community or something like that, then it becomes a little bit challenging of a conversation. But I would directly go to trying to buy the property day one because, because of those things, it's actually way more protective of you to have title.
Let's address the what-ifs and yeah-buts now though too.
Yeah.
Because we've done— I don't know what the number is, guys, between me and Zach and Nick in the community, but let's say it's somewhere over 1,000 total, total, total deals. And that's happened to us personally once. I haven't heard it happen in the community yet, but it's happened to us once. So We can, we can kind of fear ourselves into a hole sometimes too. Chris, I'm not pointing this at you. This sparked me to say this. And then you'll never do a deal, right? So real estate's interesting. There's always a pivot, always a pivot. You're going to hear deals today that had headaches. You're going to hear deals the last day that have big headaches. And we show you how to pivot. It's part of doing business, right? I see it like that.
Every time you pivot, it's very likely that the deal becomes more profitable because you're dealing with a harder challenge.
