Posted by Lukle Hoppel on April 09, 2006 at 14:53:57:
Thanks but I was referring to the economic and RE factors such as buyers or sellers market; high cash flow market; renter to owner occupied ratio; affordibility index; etc…
Thanks,
Luke
What are the best economic/RE factors for L/O’s? - Posted by Luke Hoppel
Posted by Luke Hoppel on April 09, 2006 at 03:10:49:
I’m curious on what all of you think are the optimal economic and RE factors for using L/O’s.
Re: RE factors for L/O’s? - Posted by speednxs
Posted by speednxs on April 09, 2006 at 14:38:47:
Get as much option money up front as possible. No equity is applied until the option is exercised. You have to be careful about the tenant taking on owner’s expenses before they are the owner. It’s probably not realistic to expect the tenant to pay for big repairs (small ones may be OK). The property should cash flow as a rental. Typically only 60% of the rent should go to mortgage to break even cash flow. The rent should be at least 66% over the mortgage payment. Due diligence suggests you figure out the exact expenses. The more rent/lease payment the better. You should make money whether or not the lease option is exercised. You want to evict (not foreclose) on the tenant (who probably has credit problems) if they don’t pay on time.