lease option help - Posted by Raza

Posted by John Corey on May 27, 2006 at 12:18:30:


Break down the deal.

You need to acquire or otherwise control a property. You can do so any number of ways including a lease option where you are buying.

You are then going to turn around and lease option the property out to a tenant buyer. You would be the landlord.

If you receive cash from the tenant buyer you can choose how you deal with the cash after you pay what you have agreed to pay (loan payment, lease payment - what ever was agreed when you purchased).

If you want to credit X of the tenant buyer’s rent to the eventual purchase it is generally wise to make sure that you are building up equity in a similar fashion. A credit of an equal amount paid to the original seller on a lease option or a pay down of the equity if you took out new financing.

Get out a piece of paper or a spreadsheet and look at the two sides of the deal separately. Then see if the cash flows line up. Even if they do not exactly line up with the end points line up when the tenant buyer wants to exercise the option?

John Corey

lease option help - Posted by Raza

Posted by Raza on May 26, 2006 at 18:36:06:


After reading numerous success stories on, I’ve decided to do my first lease option deal. I purchased a course and am ready to go but I have a few questions:

1). Is it better to look for motivated sellers first or build a list of potential buyers by placing ads in the paper?

2). If I decide to give rent credits, how do I credit them back to the purchase price along with the option deposit? For example, if someone paid a 5k option deposit and accumulated 5k in rent credits, how can I work with a lender to have that money go towards the downpayment?

Thanks for everything and I look forward to posting my first success story soon!

Re: lease option help - Posted by MMNC

Posted by MMNC on May 27, 2006 at 18:10:53:


I like to look for Tenant Buyers first. I then have them do the work for me and go about and farm about 5-8 FSBO’s that they are interested in. THey bring me the phone numbers and addresses and then I go to work with the sellers. I have them rate in order which house they love the most, down to the least. If I can;t work a deal with the seller than we start over again. You’ll be surprised how motivated these buyers are. IF you tie up a home that they want, you are in a great position to negotiate accordingly with the sller. You will be more confident on exactly how flexible you can be, depending on what you found out about the tenant buyers when you screened them.

Good luck.

Re: lease option help - Posted by Greg(NJ)

Posted by Greg(NJ) on May 27, 2006 at 17:35:59:

Your last sentence: “Thanks for everything and I look forward to posting my first success story soon!” You do? Good. Now go to your local court house and look for tired Landlords. Look up Landlords who have filed evection notices. Good luck