If you do a lease option you will be receiving a payment at the beginning called an option credit. As investors we want more option credit money paid if possible. This money carries our payments if needed and gives us money to invest in other properties. The option credit is the money paid for the rights or option to purchase the property you are selling. This money is normally non-refundable and is given at the beginning of the lease option.
The more money you can obtain for the option credit the more money you have to fix the property, carry payments, or invest elsewhere.
Often people will give the minimum requirement for the option credit. Here are some ways I have seen that can bring in more option credit:
- Do not list what the option credit requirement is. When asked by a potential buyer what the requirement is ask them what they can afford.
- Ask for more. Once they have told you what they can afford ask if there is anyway they could come up with "X" amount more,
- Give incentives for higher option credits. You can give buyers a higher amount of their rents each month that go towards payments. You might give them a lower price to purchase. If they pay more you can add a washer and dryer or whatever.
Using simple methods like this can help improve the money you make. Have fun!
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