You are a creative guy. If you are asking whether one can finance a property that they lease optioned? the answer is no. You cannot finance a leased property because you do not have title to the property. BTW $40,000 for option consideration (paper or not) is waaaaay to much to secure a $100,000 property. If this answer did not address your question I appologize,You may have lost me alittle in the explaination.
I have this idea, and I’ve never tried it. Let me run it by you guys and if you see any problems with it, let me know.
I have a property with equity in it, and I have been thinking of lease-optioning another property with a trust deed (or mortgage) against my equity as option consideration to be credited against the purchase price.
For example, suppose you have a $100,000 property with $40,000 equity and you want to buy another $100,000 property. You lease-option it for $1000 a month and give him a mortgage for $40,000 as option consideration. Can’t you immediately go out to a lender taking the option agreement (carefully worded to not mention that the Seller received a mortgage, not cash) and get an $80,000 loan, putting almost $20,000 in your pocket to buy discounted paper?
It seems too easy. What could go wrong with this scenario?