Posted by Redline on December 08, 2003 at 11:39:25:
I spoke to that guy via email a bit and tried to help. He’s not new, he’s a fetus. He needs to really dig in if he wants to do something. He’s definitely in the right place.
RL
looking4information - Posted by scott
Posted by scott on December 07, 2003 at 21:38:37:
What is a lease option and how does it work? Im thinking about using this option on this property that has been setting for awhile. About 2months ago i ask him how much the house would go for —Im thinking about contacting him again and trying to get ome information i was told about on this site and possibly sriking a deal.{gotta start somewhere}How do you find the comps on houses?
Thank you Scott
Re: looking4information - Posted by Blunt Lee
Posted by Blunt Lee on December 08, 2003 at 13:13:33:
Scott,
Simon is correct. It is a very bad idea for someone with no RE education to go around making offers on houses. Education first! Randy has been very generous.
Blunt Lee
In the spirit of the season?. - Posted by Randy (SD)
Posted by Randy (SD) on December 08, 2003 at 11:34:37:
A lease option is simply an agreement between a seller and a rental tenant, with an option to purchase the property at a pre-determined price. For example, you have a property that is valued at $100,000 I agreed to rent or lease your home for two years and pay $1000 per month rent, you will credit $200 of my rent each month towards a down payment if I purchased the home within two years. The second part of the agreement involves a option to purchase the property in two years for $100,000. The option contract contains an option consideration ($10,000), I pay you $10,000 now for the option to purchase your home for $100,000 two years from now. In two years when I exercise my option to purchase your home I receive credit for my $10,000 option consideration plus $4800 in rental credit. If I fail to exercise my option I lose my $10,000 option consideration and rental credit.
It is a widely held belief in real estate investment not to purchase on a lease option, the disadvantage is that as an investor purchasing on lease option you have no control over your investment-you are merely a tenant renting until you exercise your option. There are many ways to control real estate and make a profit most of which require experience or training, there are many courses available on both lease option and buying ?subject to? and you’d be well advised to learn more about the strategies before attempting them.
Why? - Posted by Redline
Posted by Redline on December 07, 2003 at 23:39:49:
Why would you offer to L/O it instead of just getting the deed? Do you even know?
RL
Re: looking4information - Posted by Simon
Posted by Simon on December 07, 2003 at 22:56:15:
Please don’t do a deal without learning how first. Whether you make money or not it’s important that you don’t get discouraged and chances are that you will if you do the deal blind. There are courses out there that will get you up to speed rather quickly. Ron LeGrand’s Cash Flow Library/System is a great one to start with. I bought mine a while ago and paid $1497 and now there on ebay for $229, go figure. Take the time to go through the whole course before you attempt this, seriously.
Just my thoughts,
Simon
Re: enlighten us newbies please? - Posted by mikeW
Posted by mikeW on December 08, 2003 at 09:13:30:
Why the negativity? Sure it was clearly apparent in his post that he doesn’t know too much. The other person already suggested that he learn what he is doing before jumping in.
It would help the whole board out if you could highlight the differences of LO and sub2. Thanks
Re: looking4information - Posted by scott
Posted by scott on December 08, 2003 at 10:21:33:
Just asking no deals in the works. everyone has to start somehere.{thanks for the response}
Whada ya want from the guy ? - Posted by Hank FL
Posted by Hank FL on December 08, 2003 at 10:37:48:
Redline is living in NJ/NY, and to make matters worse, it just snowed something like 40 feet up there over the weekend.
I’d be p_ssed to.
With the deed (sub2) comes ownership, and thus control.
With a buy-side L/O, one only has an option, which does not give you as much control.
Even with a deed in escrow and/or a performance mortage, the sellers can give you a hard time down the road if they change their minds and decide to keep the house or sell to someone else, or even sell to your tenant/buyer, after cutting you out of the deal of course.
So go for the deed first (owner finance/cash deal/sub2), and then settle for the L/O if you think they can be trusted.