Ep 117 Pt.3 4 Ways To Use Lease Options

<p>This series is all about Lease Option and how to use them in different ways. The easiest way of controlling properties for little to no money down is using lease options.  Lease Options gives no ownership to the tenant buyer. The “Buyer” is just leasing the property for a period of time and then has the option to buy the property during or at the end of that period. </p> <p>Scenario 1: Wholesale a Lease Option. Using the example of a single family house with 250K owed, 1798/month PITI payment, asking 325K purchase price with  $2,000 market rent. If a property has little to no cash flow these are great prospects for a lease option because a Seller can ask for more than market rent and can pass on the responsibility of  repairs to the tenant buyer. These are great deals to wholesale to a tenant Buyer, collect an option deposit up front, and be done with the deal.</p> <p>Scenario 2: Sandwich Lease Option on single family home. Using the same example property from the last scenario but with a 1600 payment, ask 315K and market rents are 2100/month. In this example we would offer the Seller a lease payment of 1750/month. Offer 315K to the Seller for 5 years and we find a tenant buyer that will lease the property for 2150/month. We find a Tenant Buyer for 335K, collect the option deposit of 10K up front and collect the monthly cash flow of 350. Then when the Buyer executes the option we collect the additional margin of 10K. This has to be done with a notice of interest recorded on title or chain of title going to you before being sold to your Tenant Buyer.</p> <p>Scenario 3: Master Lease Option on Multifamily. Example 20 unit multifamily renting under market value at 10K/month. Market rent is 15K/month. Offer the Seller a Master Lease Option where they have no responsibility for maintenance or repairs and they get a guaranteed price 6K/month. Option price to purchase 1,800,000. Lease option deposit of 80K to be deducted from the purchase price. Create an agreement with the Seller for capitol repairs to be made