Chris PrefontaineSerious about making money in the real estate investment business? Free Webinar - REGISTER BELOW!, Smart Real Estate Coach · Chairman, Founder, 4x Best-Selling Author of "Real Estate On Your Terms," Forbes Business Council Member, 3x Inc 5000 Honoree, Global Rank TOP 0.5% Podcast Host

No Money Down? Here's Who Pays Closing Costs

11 Jun 2026 · 2 min

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2:13

In this Q&A segment, the host answers a viewer’s question about who is responsible for closing costs in three common "payday" real‑estate deal structures: assign‑out (AO) deals, sandwich leases, and owner‑financing or subject‑to (sub‑to) deals. He explains that in an AO deal the seller covers their own closing costs just like a traditional sale. For sandwich leases, the seller pays if they have equity; if they have no equity, the buyer (the host) covers the seller’s costs. In owner‑financing or sub‑to transactions, the buyer typically pays the transfer tax and other customary costs, but these terms are negotiable—illustrated by a student named Rick who arranged a no‑money‑down owner‑financing deal where the seller paid half the closing costs. The host emphasizes that there is no one‑size‑fits‑all answer and that equity presence and negotiation shape the outcome. He concludes by promoting the Smart Real Estate Coach resources, free books, strategy calls, and the 3 Paydays Apprentice program for viewers who want hands‑on training.

Chapters

All right. So really cool question came in recently. Who pays the closing costs when you close on one of your 3 payday deals? You or the seller? Well, different answers, different scenarios for each way we buy. And also depending upon whether the seller has equity or not. Let me give you some idea of what I mean. The first one is let's use the AO deal. It's an assign-out deal. You're out of that deal. So the seller actually pays all of their own closing costs, just like a conventional sale. Second way, it could be a sandwich lease. And if the seller has equity, they're going to pay their own closing costs. If the seller has no equity, we're going to pay their closing costs because they have no money left. On an owner financing deal or a sub-to, keep in mind you own it. And so when you own it, you're going to be paying the transfer tax when you sell, the buyer pays theirs, anything that's customary for the market. It's negotiable, by the way, guys, when you're buying it, because I can think of one of our coaches and one of our students, Rick, he did a no money down owner financing deal, in which case Usually you'd say, well, if I'm putting no money down, then I got to pay the closing costs. It's usually the case with owner financing. Rick negotiated that the owner actually pays half the closing costs. So there's no set answer, but just know when there's equity in the deal, usually on a sandwich lease, they're going to pay. On an assign out, they're going to pay. And then those other ones, it's totally negotiable. There's all kinds of different nuances when you look at these deals. If you want to learn more about how to structure these, How to be in the trenches with us, how to like go literally go through deal after deal after deal on the whiteboard. Not sure where to get started? Go to smartrealestatecoach.com/getgoing for free books, strategy calls, and a whole bunch more. We're going to help you get going the wicked smart way. We've been after this for over a decade doing exactly that. Look at what it means to become an apprentice. Like literally roll up your sleeves and be an apprentice with us. Go to 3paydaysapprentice.com/youtube. See you next week on the next Q&A Thursday.