Rookie Needs Advice: Lease Option Paperwork

Comments(7)

• 
  bginvestor7th May, 2003

  Rommel,
  
  Sometimes its easier to buy a course for $150-$400 dollars and learn step by step with all the documentation. Look at some of the courses here on TCI.
  
  Bginvestor

• 
  travisluedke7th May, 2003

  I personally prefer to use Ron Legrand's L/O contract. Aside from that I would make sure you check the title and file your contract at the county or file an affidavit stating you have a purchase right. I have also heard of a lien against the title called a Lis Pendens, which basically states you have an interest in the property. Either way you don't want your seller selling to anyone else or refinancing while in the middle of your sublet sandwich. That could create a mess.

• 
  rajwarrior7th May, 2003

  I agree with bginvestor. If you really don't know what you're doing, then you need to invest a little in your education first. If L/O is the way you want to go, then look for some books/courses on that subject. I always recommend that you visit your nearest, well-funded library, and read everything you can there, for free, before spending in money.
  
  A catch to RE investing is that it does appear "too easy" or simple. The TV gurus and mega-writers want you to believe that it takes no effort to find, fund, and profit greatly from real estate. The truth is, it does take effort. It takes knowledge, and the ability to effectively use that knowledge. It takes a great deal of commitment. It also will require money. Money for education, expenses, and even to buy properties.
  
  Not trying to put a downer on anyone. Any person who takes the time to learn the business can be successful, but it is not something that you should jump into without some serious time spent studying up.
  
  Good luck
  
  Roger

• 
  Rommel8th May, 2003

  Thanks everyone for all the replies!
  I greatly appreciate them!
  
  I totally agree that educating myself is the key and I am definitely trying to do that. Ive read "Making big money investing in real estate" by Peter Conti and David Finkel. But like I said earlier, it all seems too simple of a concept. After discovering this site through my online research on L/O, Ive read stories- both good and bad-. So, I want to make sure that I am covering my a** on all paperwork.
  
  Ive considered a few training programs or ebooks that range from $50 to over $1000. But if making money doing L/O, of course with a lot of hard work and dedication, is actually a "technically" simple system as it seems, then I dont want to spend hundreds to learn what I already know or end up being led to pay more for another followup package with more info.
  
  Do any of you experienced investors have any recommendations on affordable training for a beginner?
  And recommend people for mentorship, when Im ready?
  
  Thanks!
  
  Rommel[ Edited by Rommel on Date 05/08/2003 ]

• 
  rajwarrior8th May, 2003

  Rommel,
  
  Like I mentioned, before you spend another dime, go to your nearest library and spend some time reading all the books they have available on RE investing. If you have a Barnes & Noble around, they'll let you sit around scanning over books. Spend some time there.
  
  I personally don't think L/O is the best way to buy property, but in REI it's whatever works best for you. If you do invest in another course, you may want to read John Locke's Subject to training manual. Mr. Locke is right here on the website and he'll answer any questions that you have.
  
  As far as mentoring goes, post your questions here. You'll have a few hundred qualified mentors at your service for just about any question that you have.
  
  Good luck
  
  Roger

• 
  KEA8th May, 2003

  Rommel,
  
  The actual concept of L/O is easy to understand, just like many other forms of REI. However, the MECHANICS of performing a L/O will take some learning.
  
  Whichever road of REI you decide to travel, I think you would agree that any money spent on your education is money well spent. Especially if it saves you from making a horrendous mistake! Also, you can learn an awful lot by reading the posts and articles here on TCI and other websites for free.
  
  As far as L/O is concerned, if a homeowner/seller is willing to L/O his property, then they might be open to a subject-to deal. Subject-to is acquiring the property (and deed) with the existing financing in place. Once you have possession of the property, you can perform a L/O to a tenant-buyer. This method works very well because the deed is in your name (which prevents the previous owner from any "shady" dealings with the property).
  
  Hope this helps. Keep readin' and learnin'.
  [addsig]

• 
  norepur19th July, 2003

  Rommel:
  
  With the seller; 1. the purchase and sale agreement. 2. the lease option agreement.
  
  With your tenant buyer;
  1. the purchase and sale agreement.
  2. the lease agreement.
  
  Check state laws for any other disclosure
  documents.