# L/O Pro's - What would you guys do? - Posted by John (CA)

Posted by JoeKaiser on July 19, 2002 at 20:05:33:

Forget about a formula. It’s more about the people than it is about the math.

You need to figure out your gameplan and determine “the play,” your best course of action. I may not make sense at all to sell on lease options in your area, although from the sound of things, buying on a lease option looks like a bargain.

So, if you “bought” on a lease option and knew what you were doing, you could turn around and “sell” that property on an owner contract type arrangement and create a spread large enough to drive a Brinks truck through.

There will be things you’ll need to have figured out to pull that off, but it’s an alternative you should at lease consider.

Joe

L/O Pro’s - What would you guys do? - Posted by John (CA)

Posted by John (CA) on July 19, 2002 at 18:20:49:

House in Southern California FMV \$325K. (This is about the median price range in this area)

If rents for a home like this are \$2,000.00 a month, where would you set

1. monthly lease payments
2. option purchase price
3. rent credits toward purchase

I understand a lot of you are asking 3 to 5% option consideration, setting option purchase price at 10% over current FMV, and sometimes giving small rent credits, but many of you are in markets where homes are selling in the 100K range.

I guess what I’m looking to find out is if the formula I’ve just described is valid for 325K homes or should the numbers be skewed in another way.

For you guys that do L/O’s day in and day out, where would you set these parameters?

Thanks

John (CA)

Re: L/O Pro’s - What would you guys do? - Posted by JoeKaiser

Posted by JoeKaiser on July 19, 2002 at 20:30:59:

Forget about a formula. It’s more about the people than it is about the math.

You need to figure out your gameplan and determine “the play,” your best course of action. I may not make sense at all to sell on lease options in your area, although from the sound of things, buying on a lease option looks like a bargain.

So, if you “bought” on a lease option and knew what you were doing, you could turn around and “sell” that property on an owner contract type arrangement and create a spread large enough to drive a Brinks truck through.

There will be things you’ll need to have figured out to pull that off, but it’s an alternative you should at lease consider.

Joe