Buying Real Estate Using a Lease Option

Frank Chen

Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I've got quick video on how to purchase real estate using lease options.

Locating Properties

Online Local Newspaper Ads – Real Estate Section – Search Keywords
MLS OR REALTOR.COM – Search for Keywords – rent-to-own, lease-to-own, lease to purchase, option to purchase, owner financed, lease option, lease options, lease option to buy, lease purchase, lease purchases, lease to purchase, purchase option
Also, properties that have been on the market for awhile – 90-180 days
Craigslist – Ctrl + F – use the same keywords as the MLS to quickly find what you are looking for
Local Pennysavers – Thrifty Nickel, Greensheet, ETC.
Rent-To-Own Websites
Landlords
Drive- Bys – FSBO, FRBO

Seller Negotiations

You must be able to explain all the benefits to the seller, so they will consider and accept the idea. Very rarely is a seller offering this, if they are, they're likely an investor and it's not a good deal.

Emphasis on…Less Stress

Good Tenant – Won't tear up property
No more mortgage
Tax benefits of ownership – until option is exercised
No Realtor Fees – save 3%
Save on marketing cost

Also,

Monthly rent amount – FMR – Fair Market Rent
Maintenance – Tenant/buyer Repairs up to $100
Rent Credits – Monthly extra fee (down payment) towards future purchase of the property
Purchase Price
Option to renew – 1 year term, 2-3 year option – in case market drops

Paperwork and Closing

Lease Option Purchase Agreement
Term Period
Parties Involved
Option to renew clause
Rent Payments/Credits

Closing – title company, or kitchen table

Exit Strategies

Sandwich lease – right to assign –
You live there
Find a Tenant

Purchasing real estate with Lease Options offers homeowner-ship opportunities to real estate investors. But before you jump into a lease option agreement be sure you to figure out what terms work for you before negotiating. Just like any other area of real estate investing, you have to know the process in order to effectively structure a deal in your favor.

Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you'll be automatically notified when we upload more quick video tips for you. Take care and good investing.