Lease option question? - Posted by John STL

Posted by Rick(CA) on February 23, 2001 at 17:54:42:

John,

You can do a lease option on a home where the amount owed is the same as the comps. The fact that you might have one under comps is even better for you! You make your money going into the deal and going out of the deal. Try to get it under contract for what they owe and then lease option it for about 3-6% more than current comps if you think the area is growing. Also, get about a 3-5% non-refundable option fee.

Get it under contract.

Lease option question? - Posted by John STL

Posted by John STL on February 23, 2001 at 17:03:22:

If you could do a lease option on a property that the comps suggest $65,000 and the sellers owed $57,000 would you do the deal. The sellers payments are $587 and that includes taxes and insurance. Would this be ignorant to do this or just a nice small deal. Any suggestions would be greatly appreciated.

Re: Lease option question? - Posted by Jim

Posted by Jim on February 23, 2001 at 17:57:05:

If the house don’t need any repairs and is not encumbered any more than that 1st mortgage, then by all means “SIGN IT UP”!!! for $65000.00!!

Of course I would want to make sure your rental rates would support that $587.00 + about $150.00 extra for your troubles every month. If they did then>>>>>>>>>>

You could lease option it out for $$78000.00 with 5% down of $3900.00 up front with monthlys of $737.00 ($150.00 per month +cash flow) and a back end profit of $9000.00!!!

Total Profit from this simple deal if exercised after 12 months--------$14700.00.

Not bad for a property that you didn’t even own!!!

Good Luck

Jim