Posted by B.L.Renfrow on July 28, 2003 at 21:34:41:
And here’s why: when you lease option, there is a significant lack of control. That’s the biggest problem with lease-optioning as an investor. There are just too many things which can come back to haunt you, compared with other methods of controlling a property.
That is a particularly crucial issue with a pre-foreclosure. If the seller is behind on their mortgage payments, it’s a good bet they’re also experiencing more widespread financial difficulties. Who knows how many other debts they’re delinquent on? The risk here is that if you lease option, what are you going to do when the seller subsequently gets liens or judgments against him down the road, and all of a sudden they’re attached to the property you’re lease optioning? You’re going to be screwed, that’s what.
Better to either take it subject to or buy at a discount with cash, depending on the merits of the deal and your resources.
Brian (NY)