Buying on a lease option is a good alternative when the seller has good credit and is not behind. Some sellers value their credit and there is no way they will let you take over the property subject to. Still, they are upside down and can’t sell. I know first hand because i have a property in Miss that i bought for the Katrina tax credits.
I am updside down but just suck it up every month because a short sale will ding my credit.
If you come across someone like this, offer them a long term lease with an option. What you do with it depends on the math. Remember- all real estate investing is about math.
Some of my students ask me for my lease option contracts. I am hesitant to send them a one size fits all one. Of course, like all my agreements, each one is in m y favor whether I am buying or selling. It’s important to make sure you are protected when you are the seller. I try to make it so that the other party in the deal is committed and I am not. I don’t want you making offers where you have anything to lose. Not so much when I am selling because I am in total control O f course, i have a special relationship with a sharp attorney who made all my contracts.
These are the facts I ask my students to bring to me before we can submit an offer to do a lease option.
1. What the rent is that the seller wants
2. What is the rent you can get?
3. What is the option price?
4. What is it really worth?
5. How much down does the seller want?
6. Does the house need any work?
7. How you think you can make money here
I am also an expert on selling on a lease with option. I created a course about it. For more info click here
