Lease Purchase/Lease Option

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The Lease Purchase/Lease Option, will allow you to profit in real estate without large cash deposits, not having to apply for bank loans, no overhead, no maintenance, no taxes, insurance's or home owner fees to pay.

John D. Rockefeller said "Own Nothing, Control Everything"

Anyone can control real estate that generates immediate positive cash flow. 

Lease Purchase/Lease Options, allows you to create deals large or small without going to a lending institution.

    Why Lease Purchase/Lease Option

Controlling real estate through Lease Purchase/Lease Options, whether its your own home or an investment property, is a superior method of finance.

Lease Purchase/Lease Options helps to remove most of the traditional adversarial relationships between buyer and seller. 

In most real estate transactions it is natural for the buyer and seller to try and get the best deal. 

One wants a lower price and the other wants a higher one.

Not to mention all of the other items that have to be negotiated.

Next come all of the difficulties associated with deposits, qualification, appraisals, title companies, lenders, escrow's, lawyers, etc.,

Lease Optioning or Lease purchasing, eliminates these problems and lets the buyer, seller and agents have a win-win-win experience, and put the deal together

A Lease Purchase/Lease Option, is a process where a rental agreement is combined with a option or purchase contract. 

Price, length of contract, escrow, rent credit, etc. all pertinent terms are all negotiated in advance..

The buyer (tenant) has a percentage of their rent credited to the down payment or off the sales price.

In most cases more money is being applied monthly, than an actual mortgage payment would be to the principle.

             The Lease Purchase/Lease Option,
   Will benefit all parties involved in the transaction

               Buyer - Seller - Investor - Real Estate Agent
 

    The Buyers Advantage

The Buyer may be someone who can't purchase a home through conventional means, or the Buyer may be someone that is smart enough to understand the advantages of a Lease Purchase/Lease Option, agreement.

For this example, this Buyer does not have a large enough down payment for a bank loan, has minor credit problems, a new job, high loan to debt ratio or other reasons that make a traditional purchase of a home impractical (impossible) at this time.

The Buyer is working with a Real Estate Agent and is aware of the advantages of home ownership (tax shelter, appreciation, security, etc.) and is looking for a chance to get involved in a home of their own.

The Buyer can lock in the future purchase price even though ownership may not transfer for a year or more.

A percentage of the rent can be credited toward the down payment or off the price. During the terms of the contract, the Buyer has time to check out the house, neighborhood and to obtain the best financing.

    The Seller's Advantage

If you are a Seller and the market demand is very low for your property, the best way to get your full asking price would be to Lease Purchase/Lease Option your property.

Since you are being flexible on your terms you are entitled to get your full asking price and a higher than average or premium rent for your property.

When you find a prospective Buyer you normally receive option consideration.

This is a nonrefundable amount, that in many cases, can be several months rent. 

When the Buyer exercises their option, then you will receive your capital profits when escrow closes.

If the Buyer, however, allows the option to expire you also win since you can begin the whole process all over again and either renegotiate the contract or find a new Buyer.

In either case, you receive more option consideration for the same property.

If the property sells, then you use some of your profits to reinvest in another property.

 The potential for profit for you the seller is fantastic since a well negotiated deal will always bring you profits at every stage of the Lease Purchase/Lease Option. 

    Advantage to the Investor

The Lease Option or Lease Purchase has everything an investor needs to make prudent, profitable investments in real estate.

Utilizing very small down payments     (1-2%), an investor can control properties that normally require 10-30% down without utilizing a lender or going through a complicated loan application

1. Cash upfront with option consideration

2. Cash monthly (rent)

3. Cash at closing (or a real estate note)

Other strategies involve the assigning or flipping of the optioned property to a third party or just being a consultant for the buyer and seller and retaining a portion of the option consideration.

The Lease Optioning or Lease Purchasing, agreement is a great way to be involved in controlling properties and obtaining great cash flow, high profits and minimum risk.

Lease Optioning or Lease Purchasing can be a great way to create quick cash flow for the first time homeowner or the seasoned investor.

    Advantages to the Real Estate Agent

A creative real estate agent will use the Lease Optioning or Lease Purchasing to their advantage by showing the Seller the many benefits it provides.

A Top Producing Real Estate Agent will know, or learn the many creative uses of Lease Optioning or Lease Purchasing, for their real estate investor customers. 

The good Agent will also know they should get paid a fee (not a commission) for putting the transaction together right now, and when the transaction is completed.

A Top Producing Real Estate Agent will also be very knowledgeable about the use of a Land Trust.                                                        

Questions, comments or suggestions on any of these articles, Send us an

or call Wayne H. Wagie 786-326-4747

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