Lease Op Questions Pleeeeaaassse!
Hello,
I need a couple of questions answered about lease options if you would.
How do REIs make their money with lease Options?
Can a real estate agent make money on this deal with a birdog,and a rei in the deal? How? Do REIs only make money if they sub-lease to another? What if the home owner has this house listed with a RE brokerage? Can the broker and his agent make money on this deal too?
To save you typing this is what I understand and please correct me if i'm wrong. OK?
A home owner chooses a lease option instead of sales or renting for his/her own private reasons. An REI offers to Lease Option paying a consideration deposit to the owner and pays the mortgage for say 3 years. Deciding then to buy or not. If the REI decides no, the option is over and the owner made some money.
I have a scheme brewing and it would be so great if you could answer these questions.
Thank you in advance,
Arlene
Hello Arlene
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Hello,
I need a couple of questions answered about lease options if you would.
How do REIs make their money with lease Options?
Can a real estate agent make money on this deal with a birdog,and a rei in the deal? How? Do REIs only make money if they sub-lease to another? What if the home owner has this house listed with a RE brokerage? Can the broker and his agent make money on this deal too?
To save you typing this is what I understand and please correct me if i'm wrong. OK?
A home owner chooses a lease option instead of sales or renting for his/her own private reasons.
Answer: No. The owner NEEDS to sell. You are looking for MOTIVATED SELLERS.
An REI offers to Lease Option paying a consideration deposit to the owner and pays the mortgage for say 3 years.
Answer: No. The REI gives the MOTIVATED SELLER earnest money to seal the deal. The term of the L/O agreement with the MOTIVATED SELLER should be longer than 3 years. If he/she wants less than 3 years, try to knock down the price.
Deciding then to buy or not.
Answer: No. You do not have to decide anything. The TENANT BUYER whom you L/O the property to has to make the decision.
If the REI decides no, the option is over and the owner made some money.
Answer: Yes and No. If the TENANT BUYER decides not to exercise his/her option, you have 3 choices.
One- Buy the house yourself
Two-Sell the place outright
Three- Give it back to the original owner.
You make money on the NON-REFUNDABLE OPTION PAYMENT your TENANT BUYER gives you, as well as on the spread between the monthly PITI payments on the property and what you are charging the TENANT BUYER, and if they exercise the option, you make even more on the fact that you are going to get top market value for the house.
I have a scheme brewing and it would be so great if you could answer these questions.
Thank you in advance,
Arlene
Dont scheme too much!!
Happy Trails,
Jesse
[ Edited by fauche65 on Date 08/01/2003 ]