L/O pre-newbie question - Posted by Ray Richardson


#1

Posted by phil fernandez on November 06, 1998 at 17:26:48:

If you really are serious about lease/ options you need to buy a course at this site.

Two excellent courses are Bill Bronchick’s or Joe Kaiser’s. My suggestion is to buy both of them.


#2

L/O pre-newbie question - Posted by Ray Richardson

Posted by Ray Richardson on November 06, 1998 at 13:35:23:

Hi all, I’m still in the self-education phase of my new real-estate venture and am just about bleery-eyed from reading all the great info on this site for the last day or so. Very intrigued by Lease Options as a good starting vehicle, but only know what I’ve read in the how-to articles section and nothing more. One question keeps nagging me; an apparent key advantage of sandwich-type L/O’s is that you never actually own the property. What happens in the following scenerio- you negotiate with the seller a two year L/O deal and find a nice tenant and pocket their option money, giving them a one year option. They rent for a year and back out or the purchase option (somewhere on this site I read that tenants back out about 65% of the time). Next tenant-same deal, and they back out too. You’ve gotten two nice option payments and collected two years of above market rent (minus whatever you’ve been paying the seller), but aren’t you now stuck with buying the house, since your option with the seller has expired? I’m not saying that’s the worst thing in the world, but am I right in thinking that that is how things go?

Sorry to be so long winded. Just want to make sure I understand how this business works. Finally, can anyone recommend any books on this subject? I suppose I shouldn’t waste my time and should go straight for a tape course, but would like to know a bit more before I plunk down $199…

Thanks!,
Ray


#3

Re: L/O pre-newbie question - Posted by Scott(AK)

Posted by Scott(AK) on November 07, 1998 at 19:27:00:

Ray,

If you got to that point you could do a few things. You could either let it go back to your seller, you could sell the home yourself and take advantage of any apprieciation, you could sell your Option to someone who has the money to buy, or you can convince the owner about how wonderful of a Tenant you were buy paying on time every month and negotiate another deal to do it again.

So as you see getting to that point is not as bad as it may seem. Lots of different choices.

Good Luck.
Scott


#4

Re: L/O pre-newbie question - Posted by Watbob(MA)

Posted by Watbob(MA) on November 06, 1998 at 14:07:11:

Happy to see that you aren’t wasting any time getting actively involved.

An option is a contract that is legally binding on only one party. In this case it is the seller. He is legally obligated to sell his property, you however are not legally obligated to buy.
Therefore the most you would have to lose is whatever option consideration you gave up front.

Good luck - and keep reading this site. There are many very talented people here who can and will help you.