Lease Option Strategy - Posted by James Mitchell

Posted by Mark W-MD on July 06, 2002 at 10:04:35:

Hi James:

One thing you need to consider is that most lenders will only let you borrow to invest in 4 maybe 5 properties at once. Their logic is that what if your property (or properties) goes vacant. How will you cover all of your mortage payments?

One other suggestion is to not fixate on asking price of properties, you need to know FMV or appraised value of properties. Many times asking price has no correlation to FMV or appraised value. Once you know true value then you discount off from there.

One last suggestion is you need to get to know rental rates in the communities you are targeting. You obviously can’t charge $1,200 per month when other comp properties are only drawing $750 per month.

Good Luck & Success, Mark Williams

Lease Option Strategy - Posted by James Mitchell

Posted by James Mitchell on July 05, 2002 at 13:30:32:

Would appreciate feedback on this!

Considering working with an agent to buy houses at least 20% below asking price (buy $120K house for no more than $100K). Would lease option house, without agent being involved, for at least 10% above original asking price ($130K - $135K).

Lease amount minus 25% would more than cover mortgage payment so that mortgage company would not have any negative amount to count against my income. This would enable me to buy as many as I could find that met my criteria.

Some of you may already be doing this but this would be new to me and I would appreciate others’ feedback, ideas, things I may not have considered, etc.

Thank you.