What Is A Lease Option Exactly?
im a trainee in rei and i keep seeing the term lease option on the site but dont know exactly what it means , can someone please clarify this term for me thanx
im a trainee in rei and i keep seeing the term lease option on the site but dont know exactly what it means , can someone please clarify this term for me thanx
It's a residential Fixed-Term Lease Agreement combined with an Option to buy the same property (either one Contract or two separate Contracts). If you are the Buyer, you want the right to sublet. You control the property and then sell to a Tenant/Buyer collecting a higher price, higher rent, and nonrefundable Option payment.
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Leaseoptionking in what situations would i need or prefer a lease option with the sale
You get to control the property without ownership and with little or no money, so in just about any situation.
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thanx for ur reply
l/o is a great way to contol prop. without the need for bank financing. therefore you can close on a deal much faster and without all the credit worry that you can have with the bank.......km
p.s. also you can control as many props. as you like. the thing i like the best is i don't have to beg a bank......km
Ahhh I think I understand now. I can LO from a seller w/sublet, sublet and charge more, then over and over with other props and sellers?
Just be careful of the legal implications though. Some courts/judges are not too kind when they find that the dice is loaded in the investors favor. Inshort, the lease option shlould be so structured that the buyer at the end of the option should be in a position to exercise the option. Else if it ever goes to court one can lose all the cash flow , option consideration and if the judge feels that the buyers were "part owners" then you can lose the equity too.......
Also what if the owners from who you leased it in the first place didnt want to sell to you as they feel that they can sell it for a higher price in the market. After all they hold the deed ! what happens then ?
Something to think about... I dont mean this post to scare newbies, but just somthing to watch out for.....
Cheers !
8-)
Can someone answer these questions for me. What would happen in the following scenarios?
Quote:
Also what if the owners from who you leased it in the first place didnt want to sell to you as they feel that they can sell it for a higher price in the market. After all they hold the deed ! what happens then ?
Something to think about... I dont mean this post to scare newbies, but just somthing to watch out for.....
If you record your interest to cloud the Title, it would be difficult for the Seller to sell to anyone else. Worst case scenario, you could sue for specific performance.
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