Posted by jc on November 03, 2003 at 12:36:35:
This seems to be in line with what others are seeing. Thanks!
Percentage of Options Exercised - Posted by JC in Seattle
Posted by JC in Seattle on October 27, 2003 at 11:48:36:
Hi All, For those of you who are signing up Lease Options, roughly what percentage of the people are actually execerising their right to buy?
Thanks!
JC
Re: Percentage of Options Exercised - Posted by LeonNC
Posted by LeonNC on October 27, 2003 at 17:32:13:
Merle Wooley said he carries like 115 houses at a time. I also think he said around 25 exercise thier right to buy every year. I think that’s a verygood indicator of just how many will eventually buy the house from you.
LeonNC
Re: Percentage of Options Exercised - Posted by Russ Sims
Posted by Russ Sims on October 27, 2003 at 13:53:05:
You should be prepared for a high percentage of defaults amoung tenant/buyers. I’ve been doing this for nearly 5 years and defaults are probably around 60 or 70%. I had no idea that the default rate would be so high. At first I thought it was because I wasn’t screening well enough. So I paid more attention to screening but in reality if you have someone who wants a house and they can move in right away and save you the $1250/month you’ve been paying for a vacant home, you’re going to accept them. Of course I still draw the line at evictions and criminal record. But the terrible truth is you can’t always afford to be picky in this business, at least in my market (we’re neighbors…I’m Tacoma)… BUt the good news is that every time we get a home back we re-sell it for more…we are on our 4th tenant/buyer on a couple of homes. Do it enough times and the home will sell,eventually, or at least you’ll have enough equity to get it refinanced and turned into a long term rental. You should be thinking about keeping some homes long term anyway so just figure some homes won’t sell on lease/option, in spite of your best efforts and plan on keeping those gems for your long term portfolio.
This business would have been more rewarding for me had I known that I’d have to wait a really long time for my profit on many homes. Now when I pick up a home and resell on L/O I’m just content knowing that some day I’ll get my profit out of it … it may not be a year or two or even 3. In the mean time I just collect as much optin fee as I can and I’m refining the eviction process for when things go south. Good Luck