Slow Market Profit with Lease Options

Slow Market Profit with Lease Options

We know the market has hit some difficulties. We also know the subprime market has basically crashed. What does this mean to you?

You have more houses to purchase and more people who can be willing, qualified tenants for you. Even if you do not have money or credit you can do lease options now.

Because of the number of people who could have gotten loans 10 months the number of lease optioners has gone way up. Consider having buyers / optioners now even before you had a property. Then think of the number of homes that you can tie up. This market is great.

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If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125


Great idea!

Lease options are one of my favorite real estate strategies. You have little risk and NO tenant headaches! Thanks Coach, more great stuff!

__________________

Cool Elena Cool
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."

http://elenamargaritis.com


Great

Like you said they are great. They are easy, simple, and effective. This market is like a magnet for this type of business. There are so many people aching to get out of a home and so many people that want a chance at ownership and there needs to be people that give them this chance. Why not be the one that helps people out and puts people in?

__________________

If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125


Lease Options= Large Chunks Of CASH!

I TOTALLY AGREE with my bud jjensen, Lease Options are an Excellent way to contral Real Estate without a massive amount of out of pocket expense, Plus i love the the number of Different ways to PROFIT from them. I look at Lease Options as 3 seperate-Mini Transactions......First you have the oppurtunity for receiving a "NICE" Chunk of CASH, on the "Front End"(Option Consideration) Then, you have an Oppertunity to make some Nice CASH FLOW EVERY Single Month, Lastly, you have your "Back End" PROFIT which is my FAVORITE and usually the Largest Profit made on the deal, once your "Tenant/Buyer" activates their Option.......So, there you have it, Folks, SULLY

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YOUR HERO, SULLY


Great Post Jeff,

I must agree with you and my man Sully. But there is another way to make extra cash also in a L/O, or rent to own. The interest rate that you charge your renter should always be a few points higher if possible from the rate you are being charged. Not a big amount of cash, but it builds during the repayment.......Jan


Jan are you confused?

Jan, I'm confused? How are you charging Lease Option Tenants Interest? This "IS" Different than "Owner Financing"....Jan, you know that right? The ONLY way to make Money in the "Middle" of a Lease Option is simply by charging a Higher LO/Rent Payment to your Sublet/Tenant, thats it, SULLY

__________________

YOUR HERO, SULLY


Update on sale of the property

I have decided on one or other of the factors for the property. I informed my real estate agent to offer the property as a rental or lease to own option. I hope with this new move, something happen. I remain still quite optimistic that success will come. I am keeping my fingers and toes crossed. Keep up the good wark, my brothers and sisters. Thanks for your help.

Sandra

__________________

"You can never get to the top, if you are not willing to climb. Do not look at the difficulty of the climb, only anticipate the view from the top."
"Can't even walk without you holding my hand." (Song)
"Is anything too hard for the Lord ..." Genesis 19:14
"In all things, wait on the Lord."
"Think not of your own deliverance, but trust in God who will give in abundance."
"When you are down to nothing, God is up to something." Unknown
"Our lives begin to end, the day we become silent about those things that really matters." Dr. Martin Luther King Jr.


Hello all..

I was wondering if someone could answer me this question? If I had the money for the down payment on a property,could I still get turned down for a mortgage? Could my credit stop me? My credit is bad. I'm a new investor and I have been listening and learning from all of you guys. you guys are the best. really!! I'm still reading Dean's book, so I hope some of my questions aren't too basic. I'll stay in touch.. .thanks......


Loan Hold Back

Daddyleek wrote:
I was wondering if someone could answer me this question? If I had the money for the down payment on a property,could I still get turned down for a mortgage? Could my credit stop me? My credit is bad. I'm a new investor and I have been listening and learning from all of you guys. you guys are the best. really!! I'm still reading Dean's book, so I hope some of my questions aren't too basic. I'll stay in touch.. .thanks......

Yes your credit can stop you. The banks have higher criteria than in the past. Even though you may have the downpayment you may not get the loan. That is why this posting thread is usefull. Lease options can work for anyone.

__________________

If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125


Lease Option

SanBern wrote:
I have decided on one or other of the factors for the property. I informed my real estate agent to offer the property as a rental or lease to own option. I hope with this new move, something happen. I remain still quite optimistic that success will come. I am keeping my fingers and toes crossed. Keep up the good wark, my brothers and sisters. Thanks for your help.

Sandra

Lease option opens the way for more buyers. Only a small amount of buyers can get a bank loan. The larger portion of buyers can do lease options. I wish you the best of luck.

__________________

If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125


You may need to bring a

You may need to bring a partner in with good credit.


Thanks

Hi Coach, Thanks for your suggestion and comment. As always I know things will go in my favor soon. Will keep all informed.

Sandra

__________________

"You can never get to the top, if you are not willing to climb. Do not look at the difficulty of the climb, only anticipate the view from the top."
"Can't even walk without you holding my hand." (Song)
"Is anything too hard for the Lord ..." Genesis 19:14
"In all things, wait on the Lord."
"Think not of your own deliverance, but trust in God who will give in abundance."
"When you are down to nothing, God is up to something." Unknown
"Our lives begin to end, the day we become silent about those things that really matters." Dr. Martin Luther King Jr.


No tenants?

Elena M wrote:
Lease options are one of my favorite real estate strategies. You have little risk and NO tenant headaches! Thanks Coach, more great stuff!

How do you buy multiple houses on lease option without subleasing or assigning the option to someone else?

reighnie


Sully

Lost my thought, you are right on the LO/rent. Yes, that is another way to make more money in the middle. Thanks for your quick and precise adjustment from your end. I should have known you would be there to cover me!!! Must be I am reading my mortgage table book too much lately!!!Thanks Sully


Jan Da Man

No Problem Jan, you da man.......cause Sully said so, SULLY

__________________

YOUR HERO, SULLY


Lease Options

Can someone provide some details of getting properties with lease option? I totally understand what a lease option is, but if I look in the newspaper and start calling ads with lease options, how would that benefit me and also how would I approach the seller if he/she is thinking that I am the one planning on living in the property? Would this be a sandwhich lease option?? Who is liable if a fire or something occurs? Could this be a nightmare? Who has been successful with this? What happens when the first landlord checks on his property and notices that you are not living in it, but someone else is?

__________________

"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote


Working the Lease Option

Build_assets wrote:
Can someone provide some details of getting properties with lease option? I totally understand what a lease option is, but if I look in the newspaper and start calling ads with lease options, how would that benefit me and also how would I approach the seller if he/she is thinking that I am the one planning on living in the property? Would this be a sandwhich lease option?? Who is liable if a fire or something occurs? Could this be a nightmare? Who has been successful with this? What happens when the first landlord checks on his property and notices that you are not living in it, but someone else is?

A better approach then calling "lease options" would be to call the "for rent" ads. You may have better response with motivated sellers.

The lease option is a rent to own. You, the buyer, are a renter. You should have renters insurance and the seller should take care of home insurance. When you sublease the original home owner still takes care of the insurance because you and the other buyer are renters.

__________________

If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125


Liability...

Build_assets wrote:
Can someone provide some details of getting properties with lease option? I totally understand what a lease option is, but if I look in the newspaper and start calling ads with lease options, how would that benefit me and also how would I approach the seller if he/she is thinking that I am the one planning on living in the property? Would this be a sandwhich lease option?? Who is liable if a fire or something occurs? Could this be a nightmare? Who has been successful with this? What happens when the first landlord checks on his property and notices that you are not living in it, but someone else is?

First off, you don't hide anything from the owner. You say you want the option to assign the lease option to someone else, basically subletting the property. The only difference is the lease option part. You negotiate a good deal with the seller and another "good for you" deal with the buyer. I noticed in my area, there are a lot of lease to own option properties on the new homes that were built in upper middle class neighborhoods. The rents are much lower that the mortgages on those places, but they're asking a sales price as high or higher than the homes cost last year. I saw one asking for $449,000 for a house that's worth about $250,000 on today's market. It was from a company that had several. I don't know how successful they are. But, with a motivated seller, there's plenty of room to make a decent cut on top of his agreement with you.

reighnie


Lease option?

QUESTION HOW WOULD A LEASE OPTION MAKE SENSE IF THE SELLER OF THE PROPERTY OWES 300K BUT THE HOUSE IS WORTH LIKE 280K? WOULD THIS BE A GOOD DEAL FOR A LEASE OPTION?


Home value is not the issue, monthly payment is focus

This is the difficulty of lease options in the CURRENT market. If the monthly mortgage payment is more than can be collected as rent, you dont have a deal. Funny the lease option is pitched like you can do a favor for anyone that cant sell their home because they owe more than its worth. If you had a house in a neighborhood renting for $1000 and all the foreclosures stasrted renting for $800, you dont have a deal.


lease option/ upside down

sully wrote:
I TOTALLY AGREE with my bud jjensen, Lease Options are an Excellent way to contral Real Estate without a massive amount of out of pocket expense, Plus i love the the number of Different ways to PROFIT from them. I look at Lease Options as 3 seperate-Mini Transactions......First you have the oppurtunity for receiving a "NICE" Chunk of CASH, on the "Front End"(Option Consideration) Then, you have an Oppertunity to make some Nice CASH FLOW EVERY Single Month, Lastly, you have your "Back End" PROFIT which is my FAVORITE and usually the Largest Profit made on the deal, once your "Tenant/Buyer" activates their Option.......So, there you have it, Folks, SULLY

Sully, please explain how to make the L/O work when the property is way upside down like so many here in Cali.


Let's Do Lease Options!!!

I want to copy Greg Murphy's strategy for lease options. My credit is in the crapper... I KNOW that I can accomplish my dreams if I just had a little direction about this.

I understand that once I find a motivated seller with mortgage payments that can compete with the local rent in the area that I will do a "debt take over" and tie up the property with a lease option contract.

I will have my buyers list complete before this step making it very easy to re-lease the property to my end buyer that same day if I want to. Then I will cash flow on the property till we can get my end buyer financed.

What I need help with is understanding the legal part of using a deed to secure the rights to sell the property to my end buyer.

Do some bank mortgages have a term that don't allow this strategy?

Do I only need a quitclaim deed and a lease option contract between me and the seller?

Can I use a contract deed between me and the seller and then just use a lease option contract between me and the end buyer to simplify the process?

Would you be willing to email me copies of all the contracts and form that you use?

I know that I can do this. I have overcome all the obstacles in myself and am willing to make as many mistakes as I need to get it right.

All I need is some step by step directions to follow. I am asking for the "recipe" if you have it written.

If you don't have it written can you please write it or mentor me a little?

With a little help I will be off an rolling.

Here is my email:
cameronbard@live.com

Please Help!!!

Thank you so much.

-Cameron

__________________

Cameron Eye-wink


Someone explain in detail how the process works

How is the seller going to move to another place without me or the end buyer giving the full payment for the property?

For example let's say the seller's mortgage is $147,000. & you sell the property to the end buyer for $175,500. what should the rent be for that end buyer?

Why not just do a L/O with the seller that way they don't have to move out of their property?

I need to be clear on this thou, how is the seller going to move out of his property with out any money coming to him right away?

Thanks for your help!

Everyone Can Make A Difference!
John A.


Answer your concerns

John A wrote:
How is the seller going to move to another place without me or the end buyer giving the full payment for the property? By the terms you negotiate between you and the Seller. You need to find out about Seller's situation. Do they need money upfront to move or can they afford to move out at their own expense? These are answers you will have to find out as you're talking with the Seller whether via the phone or face to face.

For example let's say the seller's mortgage is $147,000. & you sell the property to the end buyer for $175,500. what should the rent be for that end buyer? You want the buyer's payment to be more than what the Seller's current mortgage payment is. So you're going to have to do some digging to find out from the Seller what their monthly mortgage payment is. You also got to find out from your Buyers, what they are comfortable paying monthly. You have to find out what are all of the Buyer's monthly expenses if they're currently renting and their gross monthly pay. You can go to Borders or Barnes and Noble and get a mortgage amortization book. It's among the Real Estate references in either one of those stores. It will tell you what the monthly payment would be for $147,500 mortgage base on the interest rate you charge them. But most importantly find out from your Buyer what they're comfortable (and can afford) handling for a payment. And make sure its competitive with the rents and/or amentities that the home as.

Why not just do a L/O with the seller that way they don't have to move out of their property? If they can continue making their mortgage payment the Sellers likely won't move out if they don't have to do a job transfer or they're trying to move up to a bigger house in their same neighborhood or some where near by. That's why it's important that you find out what the owner's current situation is.

I need to be clear on this thou, how is the seller going to move out of his property with out any money coming to him right away? Again you have to find out the Seller's current situation. Do they need the money to move out or can they cover the move out expense on their own.

Thanks for your help!

Everyone Can Make A Difference!
John A.

__________________

"I will NOT BE BROKE! ANYMORE!"
In the name of Allah, the Beneficent,
the Merciful.
22.He is Allah besides Whom there is no God: The Knower of the unseen and the seen; He is the Beneficent, the Merciful.
23. He is Allah besides Whom there is no God: the King, the Holy, the Author of Peace,the Granter of Security, Guardian over all, the Mighty, the Supreme, the Possessor of greatness. Glory be to Allah from that which they set up (with Him)!
24. He is Allah: the Creator, the Maker, the Fashioner: His are the most beautiful names. Whatever is in the heavens and the earth declares His glory: and He is the Mighty, the Wise.


Answers

Cameron wrote:
I want to copy Greg Murphy's strategy for lease options. My credit is in the crapper... I KNOW that I can accomplish my dreams if I just had a little direction about this.

I understand that once I find a motivated seller with mortgage payments that can compete with the local rent in the area that I will do a "debt take over" and tie up the property with a lease option contract.

I will have my buyers list complete before this step making it very easy to re-lease the property to my end buyer that same day if I want to. Then I will cash flow on the property till we can get my end buyer financed.

What I need help with is understanding the legal part of using a deed to secure the rights to sell the property to my end buyer.

Do some bank mortgages have a term that don't allow this strategy?
All mortgages have a Due on Sale clause when they're created between a mortgagor and mortgagee. As long as the payments are made they (lenders) likely won't call the mortgage due. Make sure you pay the monthly payments and account for annual increases because of increases in homeowner's insurance and/or property taxes. Or interest rate if there's adjustable rate mortgage on the home.
Do I only need a quitclaim deed and a lease option contract between me and the seller? Seller can give you a quit claim deed but you want to do a Subject To deal between the Seller and you. Then turn around and do a lease option between you and the Buyer. If you're doing a Lease Option the Seller isn't transferring the deed out of their name into your name until you pay them off. When either your buyer decides to exercise their option or you exercise you're option if you're doing a lease option.

Can I use a contract deed between me and the seller and then just use a lease option contract between me and the end buyer to simplify the process? Yes you can do that or you can do a sandwich lease between you and the Seller than then sublease it to another buyer. Just make sure you have assignability clause in your contract between you and the Seller allowing you to sublease it to another Buyer.

Would you be willing to email me copies of all the contracts and form that you use?
You can purchase a FORMS CD from Staples or Office Depot, there is forms under Forms and Docs under Student Resources (on the left side of DG website). You can go to www.docstoc.com and search for free available forms to download to your personal computer or go to this site www.buyincomeproperties.com and get free real estate forms from their site also.
I know that I can do this. I have overcome all the obstacles in myself and am willing to make as many mistakes as I need to get it right.

All I need is some step by step directions to follow. I am asking for the "recipe" if you have it written.

If you don't have it written can you please write it or mentor me a little?
Look for a REIC (real estate investment club) in your area. Or go on www.meetup.com and find some groups there that might be located in your area or nearby.
With a little help I will be off an rolling.

Please Help!!!

Thank you so much.

-Cameron

__________________

"I will NOT BE BROKE! ANYMORE!"
In the name of Allah, the Beneficent,
the Merciful.
22.He is Allah besides Whom there is no God: The Knower of the unseen and the seen; He is the Beneficent, the Merciful.
23. He is Allah besides Whom there is no God: the King, the Holy, the Author of Peace,the Granter of Security, Guardian over all, the Mighty, the Supreme, the Possessor of greatness. Glory be to Allah from that which they set up (with Him)!
24. He is Allah: the Creator, the Maker, the Fashioner: His are the most beautiful names. Whatever is in the heavens and the earth declares His glory: and He is the Mighty, the Wise.


Thank you so much!

Wow! This site rocks! Thanks for answering all my questions... I now have more questions but I can likely find the answers myself. So Just THANKS!

__________________

Cameron Eye-wink


Lease options

Hi everybody I love the forum on this website. I find it very educational. I'm working with lease options. Here is my question. I'm kind of stuck on how to protect myself once I have my buyers list. I go out and try to find properties that match up to one of my buyers on my list. When I find that property. I lock it up under a lease option with the right to assign, and at the last minute my buyer from my list decides not to go forward with it. I'm stuck paying the rent or mortgage on the lease is this correct? Again. Thank you for all your information and help look forward to that.

Reuben


Reuben

You can protect yourself by having clauses inserted in your contract, such as

1) your contract begins when you find a tenant/buyer
2) having a termination date on the contract allowing you 30/60/or 90 days (number depends on what you can negotiate w/seller) to find a tenant/buyer. The longer time better for you because it gives you longer to find buyer. Be careful here though. If the seller is no longer making their pmts, more will have to come out of the buyer's option pmt to catch up the loan, cutting into your profit.

Karen

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"You're never too old to be what you were meant to be!"

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"Shining Like a Star & Dancing on Sunshine"

"Shoot for the moon! Even if you fall short, you'll still land among the stars!"


Lease Option Help

Hello Everyone!

I haven't been able to get my lease option business up and running. Any help would be greatly apprecaited.

1. With the sandwich lease wouldn't you be responsible for making payments and repairs to the seller, if your T/B did not come through on this?

2. Lease Option Assignment vs. Sandwich Lease? - Is it bettter to do the Lease Option Assignment instead of Sandwich Lease, if you don't have reserve funds if your T/B defaults on monthly payments and repairs?

3. When doing the L/O Assignment, some sellers say "they will" or "maybe consider" doing a L.O. deal, but when they hear that I have T/Bs and I'm not the one that will be living in the property, the sellers change their mind and then say no to the deal. How do you get around this propblem?? They ask me who will be living in the property. When they hear a T/B the seller calls off the deal.

Thanks!!
DG_Dealmaker


Larry

1) I have partially answered this above in #1 clause. Have clause in the contract saying contract begins when you find T/B. Now if you have had a T/B who moves and you have an empty house for awhile, yes, you are responsible unless you decide not to exercise your option and return the house which you DO NOT want to do unless you ABSOLUTELY must. It will ruin your credibility and you always want to "control" property.

When you initially get the option payment up front, keep some of it in an acct for these situations.

2)Depends on what your ultimate goal is. With the assignment, you get your assignment fee and then you are out of it. The deal is between the seller and the T/B.

With sandwich, If the mortgage pmt is low enough that you can add on a little for monthly cash flow and then make a profit on the end when the T/B buys them out, this works well. Depends on how you want to work the deal and what the seller's circumstances are initially, too.

3) This one I answered in another thread where you posted similar question, so I am just cut/pasting that answer here, too.

If you start out in the very beginning telling them you are an investor and you have clients who are both buyers and sellers and that you match up what the sellers have and the buyers are looking for, they already have the seed in their minds.

Evidently, you are not making this plain in the beginning.

It sounds like they are feeling like they are being deceived with a "bait and switch" type deal. I'm not saying you are doing that. It (L/O) is already a concept that is unfamiliar so they are probably tentative then when they start feeling like "OK, maybe we can try this..." and then you spring a stranger is entering the mix. Try putting it out there in the very beginning and I'll bet things change. People don't like surprises in business deals.

Karen

__________________

"You're never too old to be what you were meant to be!"

www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...

"Shining Like a Star & Dancing on Sunshine"

"Shoot for the moon! Even if you fall short, you'll still land among the stars!"


Assignments Vs. Sandwich lease Options

Larry, in my opinion, there is no better way to START in real estate than LO's. HAving said that, I tell anyone that comes to me to learn to focus on assignments for at least one year before doing a sandwich LO. The reason? With assignments there is no risk, AND you get to learn your target area while getting paid, and then you are EDUCATED on your area before you enter into a sandwich LO.
In regards to the sellers backing out when they realize that you will be finding a TB, that tells me they are misinterpreting the initial communication, so it is imperative to evaluate how you are approaching them and the verbiage you are using.
I send out direct mailing to listed homes, and when they contact me, they fully understand that my company is not leasing the house.

__________________

John Jackson
Tequila taster, pilot, lease options guy
Leasing to Buy,LLC


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