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fozzy
realtor/investor
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lease option deal
Thursday, December 28 2006 04:34 PM
i have a seller willing to lease option their house for 4 years, its a good deal but it needs work, the bathrooms and kitchen need to be redone. i want him to make the payments on the property till i get someone in there though. i would pay to get the remodeling done. what happens if he doesnt make those payments and i put 4 grand in the place? how could i structure this so i feel secure not putting up the money then not getting a buyer?
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Marty Couch
Investor
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Re:lease option deal
Thursday, December 28 2006 05:03 PM
Hey Fozzy,
A couple of thoughts on this one.
1. If the seller has online banking require as part of the option agreement that they provide a copy of the cancelled checks for thier mortgage payments while they are paying the mortgage. You could extend the same offer when you take over the mortgage payments (sttriking your address and account number from your cancelled check before sending the copies).
2. As far as the $4,000.00, you could ask the seller to sign a mortgage in favore of an entity you own for the $4,000.00. Explain it will only be recorded if you do not buy the property so that when he later sells the property you can recover your investment in his house.
3. All - in - all if he is signing a 4 year option and paying the mortgage UNTIL you find a tenant buyer, you should be able to recover your money regardless. You litually have 3 years to find someone who canj simply pay a $4000.00 non-refundable option fee and you will break even.
If you haven't done so, check out the Hughes Brothers home study course on options and lease options. I used one of thier techniques and walked away from a close with a check for more than I make in salery over a 2 year period (and I'm paid pretty well at my day job). It is MUST HAVE information.
Hope this helps.
Marty Couch
http://www.PPLChicago.com
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fozzy
realtor/investor
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Re:Re:lease option deal
Thursday, December 28 2006 05:33 PM
marty i dont really understand num 2. can you explain that a little bit further?
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Makrita
real estate investor
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Re:Re:Re:lease option deal
Friday, December 29 2006 08:21 AM
marty:
What is the lease option course that the Hughes offer? I don't see it in the Shop Online?
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Marty Couch
Investor
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Re:Re:Re:Re:lease option deal
Friday, December 29 2006 04:27 PM
Hi All,
Well, to answer the 2nd question first, under home study courses the course the Hughes Brothers have is called
Huge Profits/Low Risk with Lease Options-Home Study Course
I beleive they are also doing the live seminar on this in the coming year. Understanding lease options and pure options can mean a gold mine if they are utalized properly.
As far as the mortgage idea (#2 in my previous post) here are the steps:
1. Let the seller know that with the OPTION to purchase you will put money in to rehab the property
2. If you buy the property you would obviously re-sell it and recover your money
3. If you do not buy the property the seller will now have a re-habbed property that he can sell more easily
4. Should he sell the property, you would like to merely get out of it what you put into it. The only way to do this is to secure the amount you are fronting with a mortage that will either be cancelled when you excersize your option or paid off when he sells the property himself and he doesn't have to front the money for the work.
5. let him know you are willing to make the note and mortage bear no interest and no payments and that it merely be paid off when the property is sold.
Again, I would get the Hughes Brothers course on Options and Lease Options so that you know the forms and the terms.
Make sure to fax all the papers (lease, option, note, mortgage, etc.) to Prepaid Legal BEFORE you or the seller sign any of it so you don't accidently enter into something you later can't get out of (or violate any laws in the proccess).
Let me know how it goes.
Hope this helps.
Marty Couch
http://www.PPLChicago.com
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