A lot of success...? Well that seems like a subjective question. I can tell you my experience although limited. I purchased a property in 2000 in a lease option situation (the terms were 3 years) for 103 (the FMV was 116 but we established the selling price in1997 when I signed the agreement. In the last 4 years my home has appreciated and is now worth 275k. I have paid off my vehicles, and purchased a duplex for a rental and still have 100k in equity that I will leave alone until I sell.
I am not rich by any means but purchasing a house via a lease option agreement has allowed me to ,ove forward in REI when I otherwise may not have had the opportunity. I was 18 when I signed the lease option, and 21 at the end of the 3 year term.
I would definately recommend lease options as a way to get into the RE market... that's only my opinion. I will be offering a lease option to the tenants of my rental also. Seems only fair to give the same opportunity I was given. I hope that helps.
I don't quite understand by your question if you are trying to by a home to live in by way of a lease option or you are asking if this technique is successful in aquiring real estate investment property. Can You be more specific?
I am trying to invest in properties through lease option purchaces. Having a hard time finding M.S. in Tampa because the housing market is so strong. Read Contri and Finkels Protege Program and thought it was pretty good but everyone I call acts like i'm nuts. Wondering if anyone has been successful doing this in the same type of market.
Just keep plugging away. Like I tell my students, just never give up. Have a system that you do every single day. Make those calls. Put up those signs. Hand out those business cards and flyers. Send emails to those FSBO ads. Continue putting the ads in the newspaoer. The day that you give up, someone was going to call with your first deal the next day. There are so many great ways to get into REI. Please read all of the information here, and don't get discouraged. Your time and effort will pay off. Does your local paper have a lease with option to buy real estate section? Start there. Until next time.........
CALL THE ADS IN THE PAPER!
I am an investor in Colorado and I am selling a house on a lease option. Other investors called me wanting to lease option from me to get started with rental houses. I was more than happy to speak with them, I view them as another layer of security. If their tennant doesn't pay rent they will probably still pay me my payment. If they don't thats ok for me because that will just void their option and I can find a new LO buyer. I however wouldn't personally want to LO to someone who is going to do a sandwich LO but if they were going to use it as a rental thats great.
Sorry to YELL but just didn't want you to overlook (in my opinion) the best source for finding LO's.
Good luck.
This past Saturday my financial backer/partner couldn't make a meeting with a motivated seller -we were going to offer cash-, so I met with them.
I offered 5k less than they were asking on a land contract for one year. I also asked to pay her on the the backend of the contract any monies she may currently need.
I asked for the land contract AFTER I asked that what they were going to do with the cash.
The house was also free & clear of a mortgage & leins.
The house comps for $125,000. I bought it for $70,000. The basement needs to be painted as does the exterior of the garage & the interior of the house.
So, 5k for painting + $70,000 = 75 - 125 = 50k - 6% for realtor when I sell = $42,500 :-o.
By far this has been the best deal that I've done.
We've been doing REI for one year, we have about 8 properties and two or three rehabs going. I leave work Sept 1.
So, 5k for painting + $70,000 = 75 - 125 = 50k - 6% for realtor when I sell = $42,500 :-o.
Question, was just looking this over, and it is a good deal. You mentioned the Comp was $125,000.00 any idea what the appreciation is in the area?
Also, what is the turn around time on Homes being sold at FMV in that area compared to those sold at lets 10K below FMV?
Just Curious
MarkB
[ Edited by MarkB on Date 06/04/2004 ][ Edited by MarkB on Date 06/04/2004 ]
How do you handle a LO? I know you are supposed to take over the sellers mortgage payments, give some kind of down payment, but what kind of terms do people usually use?
I believe that you try to get control of the property with no downpayment ($1) and get as long a term as you can for yourself. When you lease you give them a 1 or 2 year term and if they need to extend you get another deposit and raise the pruchase price. If the owner demands a downpayment pay them from the downpayment you receive or try to pay advanced rent in lue of downpayment. The less out of youre pocket the lower the risk!
Mdpiendel,
Don't Give Up! Whether you're LO-ing or whatever, just make up your mind to be successful at it. Once you're mind is in control, the rest of you will follow!
Asduncan,
My contract with homeowner is always at least 3 years, preferably 5. My contract with tenant/buyer is always 1 year, no longer. I put $10 down to make the contract legal and get as much option money as I can, within reason. [ Edited by crazyfnmama on Date 06/05/2004 ]
I love using lease options. What better way to leverage a property with zero out of pocket expense. I just aquired a property worth $290,000. w/ lake access this way. Pay as little up front as possible and get the longest term possible. This equals the most money for you. See my lease option properties on my list.
I also love using lease optioning as a way to acquire property. I usually put the home under contract for $10 or $20 ( I just can't seem to bring myself to only offer $1) , perform my due diligence, draft my lease with option to purchase( I always offer a minimum of a five year term initially), sit down with the homeowner and get the job done.
Just did one in the high desert (good appreciation) area of California. Home fmv is $145K, needs $2-$3K cosmetic fix up, took on lease option for $110K with five year option. I plan on putting a TB in the home under a 2 yr option and recoupe my out of pocket money + $2K and the rents in the area will allow me about a $200.00 positive cash flow each month.
Also, once I found a way to properly present the benefits of a lease option to a homeowner with conviction and a level of knowledge, I got much more favorable responses. Remember, if you're not convinced, how can you ever convince them. Good Luck.
A lot of success...? Well that seems like a subjective question. I can tell you my experience although limited. I purchased a property in 2000 in a lease option situation (the terms were 3 years) for 103 (the FMV was 116 but we established the selling price in1997 when I signed the agreement. In the last 4 years my home has appreciated and is now worth 275k. I have paid off my vehicles, and purchased a duplex for a rental and still have 100k in equity that I will leave alone until I sell.
I am not rich by any means but purchasing a house via a lease option agreement has allowed me to ,ove forward in REI when I otherwise may not have had the opportunity. I was 18 when I signed the lease option, and 21 at the end of the 3 year term.
I would definately recommend lease options as a way to get into the RE market... that's only my opinion. I will be offering a lease option to the tenants of my rental also. Seems only fair to give the same opportunity I was given. I hope that helps.
I don't quite understand by your question if you are trying to by a home to live in by way of a lease option or you are asking if this technique is successful in aquiring real estate investment property. Can You be more specific?
Dave
[addsig]
I am trying to invest in properties through lease option purchaces. Having a hard time finding M.S. in Tampa because the housing market is so strong. Read Contri and Finkels Protege Program and thought it was pretty good but everyone I call acts like i'm nuts. Wondering if anyone has been successful doing this in the same type of market.
Just keep plugging away. Like I tell my students, just never give up. Have a system that you do every single day. Make those calls. Put up those signs. Hand out those business cards and flyers. Send emails to those FSBO ads. Continue putting the ads in the newspaoer. The day that you give up, someone was going to call with your first deal the next day. There are so many great ways to get into REI. Please read all of the information here, and don't get discouraged. Your time and effort will pay off. Does your local paper have a lease with option to buy real estate section? Start there. Until next time.........
Divorce situations with no equity, out of state owners who are tired of being a landlord, etc. are good starting points.
Great advice fro miraclehomes, just don't give up. This is a business that requires a good amount of effort in order to reap the rewards. Good Luck.
Dave
[addsig]
CALL THE ADS IN THE PAPER!
I am an investor in Colorado and I am selling a house on a lease option. Other investors called me wanting to lease option from me to get started with rental houses. I was more than happy to speak with them, I view them as another layer of security. If their tennant doesn't pay rent they will probably still pay me my payment. If they don't thats ok for me because that will just void their option and I can find a new LO buyer. I however wouldn't personally want to LO to someone who is going to do a sandwich LO but if they were going to use it as a rental thats great.
Sorry to YELL but just didn't want you to overlook (in my opinion) the best source for finding LO's.
Good luck.
Hello,
Has Lease Optioning worked for me? Yep.
This past Saturday my financial backer/partner couldn't make a meeting with a motivated seller -we were going to offer cash-, so I met with them.
I offered 5k less than they were asking on a land contract for one year. I also asked to pay her on the the backend of the contract any monies she may currently need.
I asked for the land contract AFTER I asked that what they were going to do with the cash.
The house was also free & clear of a mortgage & leins.
The house comps for $125,000. I bought it for $70,000. The basement needs to be painted as does the exterior of the garage & the interior of the house.
So, 5k for painting + $70,000 = 75 - 125 = 50k - 6% for realtor when I sell = $42,500 :-o.
By far this has been the best deal that I've done.
We've been doing REI for one year, we have about 8 properties and two or three rehabs going. I leave work Sept 1.
Thanks,
OnTheWater
So, 5k for painting + $70,000 = 75 - 125 = 50k - 6% for realtor when I sell = $42,500 :-o.
Question, was just looking this over, and it is a good deal. You mentioned the Comp was $125,000.00 any idea what the appreciation is in the area?
Also, what is the turn around time on Homes being sold at FMV in that area compared to those sold at lets 10K below FMV?
Just Curious
MarkB
[ Edited by MarkB on Date 06/04/2004 ][ Edited by MarkB on Date 06/04/2004 ]
Hello,
Appreciation in the area is between 3 & 5%/year, depending on where you're at in the town.
73 days is the average.
10k less? Bottom line? I can wait 73 days for an additonal 10k. :-D
Thanks,
OTW
How do you handle a LO? I know you are supposed to take over the sellers mortgage payments, give some kind of down payment, but what kind of terms do people usually use?
Option to buy after a year, two, or three?
Thx.
I believe that you try to get control of the property with no downpayment ($1) and get as long a term as you can for yourself. When you lease you give them a 1 or 2 year term and if they need to extend you get another deposit and raise the pruchase price. If the owner demands a downpayment pay them from the downpayment you receive or try to pay advanced rent in lue of downpayment. The less out of youre pocket the lower the risk!
Mdpiendel,
Don't Give Up! Whether you're LO-ing or whatever, just make up your mind to be successful at it. Once you're mind is in control, the rest of you will follow!
Asduncan,
My contract with homeowner is always at least 3 years, preferably 5. My contract with tenant/buyer is always 1 year, no longer. I put $10 down to make the contract legal and get as much option money as I can, within reason. [ Edited by crazyfnmama on Date 06/05/2004 ]
I love using lease options. What better way to leverage a property with zero out of pocket expense. I just aquired a property worth $290,000. w/ lake access this way. Pay as little up front as possible and get the longest term possible. This equals the most money for you. See my lease option properties on my list.
I also love using lease optioning as a way to acquire property. I usually put the home under contract for $10 or $20 ( I just can't seem to bring myself to only offer $1) , perform my due diligence, draft my lease with option to purchase( I always offer a minimum of a five year term initially), sit down with the homeowner and get the job done.
Just did one in the high desert (good appreciation) area of California. Home fmv is $145K, needs $2-$3K cosmetic fix up, took on lease option for $110K with five year option. I plan on putting a TB in the home under a 2 yr option and recoupe my out of pocket money + $2K and the rents in the area will allow me about a $200.00 positive cash flow each month.
Also, once I found a way to properly present the benefits of a lease option to a homeowner with conviction and a level of knowledge, I got much more favorable responses. Remember, if you're not convinced, how can you ever convince them. Good Luck.
Dave
How do you find your lease option properties? Sounds like an awesome deal!
Dave,
Thanks for the success story.
John
[addsig]