Lease options provide the ideal solution for a number of reasons…
- It requires little or no money to get started. That’s huge for many people, because if you were like me – I lived paycheck-to-paycheck. I did not have the funds needed to invest in properties.
- It allows you to take control of a property without taking title to it, thus drastically reducing the risk involved normally associated with investing tens of thousands of dollars, or more.
- It is the only strategy that I know of that can put several thousand dollars into your bank account in as little as 30 days!
Here’s an example of a typical sandwich lease option deal….
A seller has a house worth $125,000, and owes $100,000 on a first mortgage they would like to sell. Their monthly principle, interest, taxes, insurance (PITI) payment is $930/mo.
The seller agrees to lease the house to you for $110,000 on a lease option contract, cover their monthly payment of $930/mo, and you agree to give them $1,000 down.
You lease the house to a tenant/buyer for $129,900, receive 5% or $6,500 down, and $1,150/mo. Your seller gets $1,000 from the 5% down paid to you, leaving a ‘front end’ balance of $5,500 with a monthly spread of $220/mo.
Let’s say that your tenant/buyer gets qualified for a loan in 18 months, you will have made $5,500 on the ‘front end’, $220/mo x 18 months = $3,960, PLUS the ‘back end’ difference between your balance to the seller of $104,000 (you paid $1,000 down) and the balance the tenant/buyer owes of $19,400 ($129,900 – $6,500 = $123,400, less the $104,000 you owe the seller).
Your net profit would be $5,500 + $3,960 + $19,400 = $28,860 – all for doing nothing but signing two sets contracts on a property you neither owned, took title to, nor had to get a loan or use your credit for.
With all of these positive aspects, and all of the potential for financial reward, lease options are the absolute best strategy for making a significant amount of income as quickly as possible.
