Advertising To Attract Tenant Buyers
You will soon discover that fmding tenant buyers is the easiest part of the equation. There are many people with poor credit and or no down payment that are dying for the opportunity to buy a home. Newspaper ads with the headline Rent to Own or Lease Purchase will attract many potential tenant buyers. Run these ads in the For Sale and For Rent sections of the larger newspapers. You will find some sample ads in the appendix. Place hundreds of flyers in the neighborhood immediately surrounding...
Straight Option
A purchase option can be used without a lease to gain control of a property and create a profit. Once you have obtained an option, you can either sell (assign) your option for immediate profit, or exercise your option to purchase and simultaneously sell it to a third party buyer. If you are speculating that a particular area is ripe for development, you can use an option as a long-term investment technique. Again, keep in mind that option dealing1' is very close in practice to what a real...
Factor In Appreciation
What about inflation In either scenario, you would benefit from inflation, since the option price in the lease option scenario locks the price. However, you would fare much better with a lease option, since your ROI would be much greater. Let's look at some numbers. Suppose that over the next three years the house appreciates to 200,000. In the buy, hold and sell scenario, your total profit would be 28,500 ( 25k appreciation + 3400 loan paydown), about 45 ROI. In the lease purchase scenario,...
An Option Can Be Sold Or Exercised
An option is a personal right that is assignable. If you were able to obtain an option to purchase at favorable terms, you could sell your option. The assignee of the option would then stand in your shoes, having the same right to exercise the option to purchase the property. As with a lease, an option is freely assignable absent an express provision to the contrary. I. ALTERNATIVES TO SELLING YOUR OPTION Rather than sell your option to purchase, you may wish to exercise the option yourself,...
Sample Postcard
We are private investors (not brokers) who offer creative solutions to your real estate problems, tf you have a vacant properly that you need to sell quickly, we can help Will lease your property with an agreement to purchase. We will make your monthly mortgage payments, guarantee you 100 occupancy, maintain your property and pay you the highest price possible. Call NOW, because we have the solution for YOU Brad Smith, President Lease Purchase Solutions, Inc. PS - pass this card on to a friend...
Epilogue
Now that you have the basic building blocks of how a lease option or lease purchase works, it is all up to you. You must take action, and a lot of it, to make this work for you. You will undoubtedly run into obstacles, experience rejection and have doubts about whether this stuff really works. It does. It works in every part of the country, regardless of what real estate agents, title companies, attorneys and your close-minded peers will tell you. You cannot expect to make this happen overnight...
Info
Although lease options arc quite simple in practiec, there arc many legal issues that often arise. Unfortunately, most of the real estate seminar gurus'1 fail to mention these details or how to avoid them. On occasion, a seller decides not to live up to his end of the hargain. Sure, you can always sue the seller to force him to sell you the property, but this can cost you thousands of dollars in legal fees and take years to accomplish. Sometimes, the seller dies or is unable to convey title...
Tax Issues
There are some interesting and lucrative advantages of using options as both an optionor and optionee of real estate A. Tax Consequences for the Optionor Seller Generally speaking, option money is not taxable to the optionor until the option is exercised, expires or is abandoned. I.R.C. Section 1234 subject to dealer rules, discussed below . If it expires or is abandoned, it is taxable to the seller as ordinary income at the time it expires or is abandoned. A personal residence sold under lease...
