Subject to Pricing - Posted by Maria

Posted by Jim FL on May 16, 2006 at 13:33:21:

Can you lease option a house for $2k per month in your market?
What are market rents in your area?

The thing is, with a property purchased using any method, it is wise to have more than one exit strategy.
Just because you buy a house subject to the existing financing, does not mean you must lease option as your exit.
This does of course give you three profit centers.
Hopefully when buying, using any method for purchase, you are utilizing the golden rule…which is, make your money when you buy.
What does that mean?
To do otherwise, is to speculate, and that’s no way to build long term wealth.

So, look around your market, determine market rents, and perhaps look for some rent to own, or lease option homes as well.
This will give you an idea of what others are charging monthly etc, and should let you know where you need to be with yours.

Jim FL

Subject to Pricing - Posted by Maria

Posted by Maria on May 15, 2006 at 20:30:18:

I live in an area where the average home is between $250000 and $300000 dollars. Can the “subject to” principles be applied here?. I just purchased The ABCs of “Subject to” and was wondering if someone who has used this course in the $250000 to $3000000 dollar range?
I’d love to hear of anyone else’s experiences.

Re: Subject to Pricing - Posted by John Corey

Posted by John Corey on May 16, 2006 at 05:25:22:


Ignoring the direct question for a minute to help you clarify your thinking let me ask the following.

Why do you think the price matters? What about the price range you posted is going to change the mechanics?

John Corey

Re: Subject to Pricing - Posted by Maria

Posted by Maria on May 16, 2006 at 12:14:26:

I’m wondering if price matters due to the fact of lease optioning the property. Is there a price point where it is harder to lease option? I’m wondering if people are willing to lease option a property and pay $2000 a month to do it?

Re: Subject to Pricing - Posted by John Corey

Posted by John Corey on May 16, 2006 at 14:09:33:

It will depend on the market.

In some markets $250,000 is a garden shed while in other markets you would have to build a custom home to spend that sort of money.

If you are concerned about the rent levels that people pay and what sort of extra they might pay to option the home you need to look in the local paper to get a feel for local rents. A small margin above that is what most people can handle.

Also compute what they would likely pay if they purchased the property and took out a loan. If the numbers are similar then you are in good shape. If the numbers show that buying is a lot cheaper it will be hard for people who want to live there to afford the higher number.

It is really going to come down to your market (average prices, average rents, cost to buy on a monthly basis, capital needed to get into a property).

John Corey