Posted by Brad Crouch on April 14, 1999 at 11:25:27:
> From what I know it sounds almost like flipping but
> on a longer term basis with some cash given to the
> property owner to secure a lease with an option to
> buy at a set price on a future date.
Flipping and lease options are very different. Flipping means being in and out of a property very quickly. Lease options generally involve a long term lease with an option to buy the property.
> How are these deals structured? How long do the
> options generally get scheduled for?
Any term you want, but typically the “master lease” (with the seller) might go for three years, renewable two times. Once you have the master lease, you can either live in the house, find a sub-tennant to lease option to and collect the initial non-refundable option consideration and monthly spread, and if the option is excercised by your sub-tennant, collect the difference between HIS buying price and YOUR buying price.
You can also “sell” your lease option contract to another person who will either live in the property or find a sub-tennant to lease option to. Or whatever else they may want to do.
> Do they require a lot money up front?
No, not from you.
> Is it good to work on L/O’s and flipping at the same
They are two totally different techniques. Depending on your time, you could work them both. However I believe that it is better to focus on one area until you have the experience to be able to “switch gears” at the drop of a hat.
I think ALL the “tools” should be explored, and used whenever the opportunity presents itself. But if you focus on one technique at a time, in a few years you will know enough techniques to handle just about ANYTHING that comes down the pike.
> What are some good L/O’ courses?
Bill Bronchick has good courses. So does Joe Kaiser. You won’t go wrong with any of the courses available from this site.
You might also want to investigate the PACTrust method.