Lease Options in a Lava-like Market - Posted by Doug Pretorius

Posted by Darin on March 13, 2000 at 20:40:21:

Starter houses may be selling the same day as listed. Maybe even a line up of people. Even the FSBO’s you dont stand a chance.

If you were to run stats and graph them, you would see that the higher the price, the longer it takes to sell. Builders are a good one to look at. How about somehow getting a list of daily expired listings. Drive higher end subs and look for signs of vacancy.

Good luck

Lease Options in a Lava-like Market - Posted by Doug Pretorius

Posted by Doug Pretorius on March 13, 2000 at 19:40:34:

I’m interested in trying out some lease/option deals, but I notice that most of the success stories and how-to’s dealing with L/O’s talk about getting the properties well below market and flipping to renters for profit. I’m hoping some of you can give me ideas for using L/O’s in a very hot market, let me give you some background:

Currently in my area there is the biggest seller market in history going on. SFH are selling for an average of $10,000 more than the asking price. I called about one small duplex that had sold for $23,000 more than the list price, this was nearly a 25% premium! In the last year property values have gone up about 10% and if this keeps up, this year they will probably go up 10-15%.

The rental market is also booming. With vacancies of probably less than 1%, especially for SFH and condo/townhouses. Last year 3/2 SFH were renting for $825-$875+util now they are around $1,000+util.

I understand the speed-of-close benefit for L/O’s, and in this hot market I’m sure pointing out that they would be saving $10,000+ commission wouldn’t hurt either.


Re: Lease Options in a Lava-like Market - Posted by TRandle

Posted by TRandle on March 13, 2000 at 23:58:41:

You’ve pretty much described my market (Austin, TX). It doesn’t change the fact that there are still plenty of motivated sellers out there. Perhaps it’s slightly tougher to get in, but it’s easier to get out. If properties are selling for premiums, then how much can you mark the property up to compensate yourself for allowing someone to get into one of your L/O’s? How much of a discount on the buy side do you need if you can easily make your sales price 5% to 20% above market?

Don’t let market conditions become an excuse. It may be appropriate to adjust your approach and/or strategy to meet the market, but first you’ve got to get started. I get a little better at this REI thing each month and am excited about the HUGE inventory I will amass at HUGE discounts when the market swings the other way. If I can acquire decent deals in the hottest market this city has ever seen, I’m fairly confident I can do it when the cycle reverses. Go find a deal and post your success story…