Have you ever had bad renters? Late payments? Damage to your property? Landlording has never been fun, especially when you have a nice home with bad tenants.
Have you ever tried to sell a home and it seemed as though nobody was interested in it? The realtor couldn’t sell it after they convinced you to list your home. You thought about renting it, but realized that wouldn’t work due to landlording headaches. But you must leave town and the home sits vacant.
The home sits vacant, and you have no hope of it selling. You'll probably make three or even four mortgage payments. Your insurance company could cancel your homeowner’s policy if the home sits for 30 days or more. (Read your policy!) Your home sits there with no bites and you think about reducing the price to sell it quickly. You know you need to do something now! The solution? Lease-option.
WHAT IS A LEASE-OPTION? LEASE + PURCHASE OFFER = LEASE-OPTION AGREEMENT
A lease-option is simply a lease agreement combined with a purchase contract, which gives the new tenant/buyer the right to purchase your home under specific terms.
LETS LOOK AT A LEASE-OPTION EXAMPLE…
A seller wants $135,000, rent of $1150 per month with a rent credit of $200, and a term of 2 years.
Sales Price: $135,000
Monthly Rent: $1150
Term: 2 Years
WHAT'S THE POINT?
You may be asking yourself, “What’s the point of this real estate lesson?” Well, first, I'm not a realtor; I'm a private investor that specializes in leasing, buying, fixing, marketing, and selling homes.
I offer a unique lease-option plan that will fit your needs. I will lease-option your home from you at an agreed price and terms. I will find a suitable tenant/buyer that I will qualify to live in your home. When the tenant/buyer is ready to buy, I will help them get financing to buy your home. I will then buy the house from you and the new buyer will buy the house from me. Our price is higher than what we bought it from you. This is a WIN/WIN situation.
• Build equity every month
• No long term vacancy
• Safer than conventional rentals, better quality tenants
• No management headaches
• Receive full asking price
• Receive non-refundable down-payment
• No or little maintenance costs or repairs
• Tax benefits
WHY DON'T I JUST LIST IT WITH A REALTOR?
It won’t hurt you to list your home unless it doesn’t sell. However, most real estate brokers simply just list the home on the MLS and hope to get a bite. The first problem with listing your home is that there are thousands of homes on the MLS. Realtors also have several other homes they are trying to sell as well. The second problem with listing your home with a Broker is that they don’t understand what a lease-option is or they will say there isn’t enough money for a commission.
When I agree with you to lease-option your home from you, I take it seriously. I'll treat your home as if it was my own. I am constantly thinking of ways to move your house faster so you can get on with your life.
WHAT IF THE TENANT/BUYER TEARS UP MY HOME?
Well, there is no guarantee that the tenant will not damage your home. But under our agreement, if that happened, I would repair it at my expense. My goal is to find a buyer that will be able to qualify for a loan. Serious lease-option buyers tend to treat the home as if it was their own, so damages are rarely a problem.
WHAT ABOUT A PROPERTY MANAGER?
A property manager will charge you around 10% of the monthly rent. Sometimes you will need to follow up on property managers to make sure they’re doing their job. Anytime there are repairs needed, the property manager will call a repairman to fix the problem at your expense. Not only are you losing 10% every month, but also you will be paying all repair costs.
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