Saturday, September 10, 2011

Making Money With Lease Options, Rent To Own etc.....

Lets start with some basic definitions. What is a "lease option?"
Basically speaking, it is the ability to lease the subject property
(real estate) for a monthly, or annual payment amount, and have the
option to purchase the subject property for a set price at the end or
anytime - during the lease period. Lease options go by a lot of
different names. "Rent to Own," "Lease with Option to Purchase," and
"Purchase Options" are the most gemon. The names may be different, but
essentially all these titles mean the same thing. As you begee more
educated in different techniques, you find more and more ways to
structure the offer, all of which will have an impact on how much you
can get paid. There are a lot of reasons to buy property using a Lease
Option, from an investors point of view.

One of the foremost reasons is that it allows you to control an asset
with little, or even none, of your own money. Talk about leverage! You
mitigate your downside risk further because you are not the one that
has qualified on the loan yet, you can control the asset. Before I get
into some of the mechanics, lets look at some of the benefits to you
the investor, as well as direct benefits to the buyer and seller, using
this strategy. As I said before, as an investor you can earn maximum
leverage with minimum cash outlay. You can put a property under
contract to lease-purchase for little to no money, and then find a
buyer that would put up the option consideration. You can usually
control a property for a 1-2% down payment that would normally require
a 10-20% down payment if you were buying. Their are also at least 3
ways to get paid when doing lease options, We will get more into that
later.

Advantages to You, The Investor

Maximum Leverage
Minimum Cash Outlay
No Property Maintenance
Cash Flow

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