One reason I favor leasing options coaching is that these strategies give the most flexibility to complete successful deals. The three basic leasing options are the straight lease purchase option for a house you already own, the sandwich lease option, and cooperative leasing options. Besides these basic strategies, you and the other parties to the deal can write the contracts in almost anyway to create a win-win-win scenario for everyone involved. However, state real estate laws vary from state to state so make sure you understand the laws before deviating too far from the norms.
Using Straight Leasing Options to Sell Your Home
Using the straight leasing options to sell a house is my least favorite of the three strategies. Simply put, it has the highest cost and the most risk to you as an investor. This leasing options strategy involves you first taking full ownership of the house. That’s going to require a significant down payment and closing costs.
However, the straight leasing options method could be the right choice if you already own a house and want to sell for top dollar. Often it’s a good choice for landlords wanting to sell a house. He or she can use the lease with an option to purchase with the existing tenants or find other tenants interested in this choice.
Sandwich Leasing Options
The sandwich leasing option is more appropriate for investors because the costs and risks are very low. Here you find a seller willing to sell with a leasing option. You sign a leasing option that you only exercise after you find a potential buyer.
You then put that buyer under your own leasing options contract. You make sure their option fee is higher than the one you pay the seller. You also make sure the monthly rent is more than you are obligated to pay the seller. And finally, you set the selling price to the end buyer higher than what you have to pay the seller.
That keeps all of your money out of the deal and creates three paydays for you. First, when collect the higher option fee, each month when you collect more rent than you pay the seller, and in the end when collect a higher selling price than you owe the seller.
Cooperative Leasing Options
These are also known as wholesale leasing options. This leasing options strategy involves a seller, you, and a wholesale buyer. The way to begin this investing strategy is by building a list of wholesale buyers looking for lease options. Once you have a wholesale buyer list, you begin looking for leasing options opportunities. You then contract with the seller to find a buyer.
Once you have the house under contract, you market to your wholesale buyer list. Typically, a wholesale buyer will take full ownership of the house. They then find a leasing options end buyer and put it under contract. The leasing option is between the wholesale buyer and the end buyer. Your involvement in the deal ends when you sell your contract with the original seller to the wholesale buyer.
Remember, these are only the basic leasing options strategies. There are many variations to each. If you’re interested in learning more about these strategies, please use the information below to contact me.
If you want to work directly with me as your leasing options coach or with any of my other investing models that have proven highly profitable, please join me at www.wendypatton.com/what-is-wendy-pattons-inner-circle.
Besides reading this article about leasing options, you’ll want to read this other useful information that I offer free. Please take advantage of it today.
Several times each week, I make the most current real estate investing information available to readers. This time, it’s about leasing options coaching but the information I provide changes constantly to stay current with the market. Be sure to check back at: www.wendypatton.com. Also, get started learning how to do NO CASH lease options on real estate by picking up a copy of my bestseller book: Investing in Real Estate with Lease Options and Subject-to Deals.
By Wendy Patton
What did you think of this article? Please leave a comment below.