Option Consideration
As a "newbie" to REI and wanting to use the L2P strategy in my area, how does one determine the amount of option consideration? Is there a standard formula? Thanks all...this is a great site!
As a "newbie" to REI and wanting to use the L2P strategy in my area, how does one determine the amount of option consideration? Is there a standard formula? Thanks all...this is a great site!
Where you from?
Mark
Rick, Are you selling or buying? When I purchase homes through lease option I offer to split my option fee that collect from a qualified tenant buyer. But when I sell by lease option I normally will try to get 3-5% from the qualified tenant buyer.
1 dollar for the seller and 3-5 % of PV from the T/B
Giving a hard and fast formula is difficult because it depends on many factors. most importantly is your market.
With that said, 3%-4% would probably be about average. It depends on what size house you are dealing with. I have taken 2% and been happy.
I never put an amount in an advertisement. I then find out how much the callers have available to put down. Make my list. Then it's decision time.
Buying: Option consideration?? You want me to give you money to take this monkey off your back?? I never thought about that! Give me some time to think.
Dang, I didn't know you wanted money! Option consideration to the owner is never mentioned by me.
Selling: How much can you come up with??. Oh, you'll have to do better than that!. Maybe we can take what you've got and pump up the monthlys to get you where you need to be. You did want to buy this beauty and not just rent it -right?