Buying Real Estate with Lease Options

I’ve been a real estate investor for several decades. I’ve studied and worked with many investing methods. I’ve had success with various methods. Today, I don’t hesitate for a second to state that I am fully resolved that buying real estate with lease options is the fastest, easiest, and least expensive way of investing in real estate. And highly profitable.

Buying Real Estate with Lease Options is Fast, Easy, and the Least Expensive Method

Buying real estate with lease options is fast for a couple of reasons. First, there only needs to be two people coming to a meeting of the minds in the deal – you and the seller. Banks, brokers, escrow companies, and many others that are typically involved in a traditional deal don’t need to be part of a lease with the option to purchase. Some of these others might become involved if you decide to complete the purchase. However, by that time, you already have control of the property and a contract in place. All that is remaining for the others to do (down the road) is complete what is already spelled in the contract.

Buying real estate with lease options is the easiest way to invest. Fast often leads to easy for the same reasons. Keeping the people involved to a minimum. But it’s also easy for the investor because he or she has an out if the deal doesn’t work well. That’s the “option to purchase” part of the deal. It’s easier to enter a deal when you know that if your exit strategy isn’t going to work, you can walk away with little or no financial commitment.

Buying real estate with lease options is the least expensive method without a doubt. You gain control for a small or no option fee. With the sandwich lease option, you immediately collect much more in the second option fee than you paid (if you paid anything). It’s not only the least expensive, it’s profitable from the very beginning.

Buying Real Estate with Lease Options Brings in the Most Potential Buyers

The advantages just keep rolling in when buying real estate with lease options. Don’t underestimate the importance of having more potential buyers. More potential buyers mean more profit. It now includes buyers that are on the cusp of qualifying for a mortgage that other sellers won’t even talk to. It replaces the adversarial relationship that often develops between a traditional buyer and seller when it’s only about money – you’re offering what others don’t offer. Your end buyer now enjoys a nice home without the immediate hassles of qualifying for a mortgage.

However, as the investor, you certainly don’t get the short stick. A few of the advantages you gain are:

  • A top sales price from the end buyer.
  • Positive cash flow.
  • The largest list of possible end buyers.
  • Minimum risk because you’re not the owner on the title.
  • No commissions or fees.
  • No maintenance (the end buyer is responsible).
  • A large non-refundable option deposit.
  • A big profit when the home sells.

Buying Real Estate with Lease Options Combines Strategies

Investments are based on one of two strategies. One is buy and hold long term for the cash flow. The other is buy and flip for a fast profit. Buying real estate with lease options is the best of both worlds by combining the strategies.

The lease side is essentially a buy and hold strategy. You may not have bought the property outright but you do control it during the time of the lease. This entitles you to the rent profits as if you did own it. Also similar to buy and hold, you gain the appreciation in value when you sell in a sandwich lease arrangement. Even better, you accomplish this without the risks and responsibilities of actually owning the property.

The combination also comes with the flip advantage. Basically that is exactly what you are doing by flipping it up front to an end buyer for a profit at the end of the deal. Obviously, their option to buy – for a pre-determined price – is a huge part of the deal. It’s your biggest payday. It doesn’t get much better than having the advantages of both strategies – buying and selling PLUS collecting rent by holding the property in your portfolio.

There are even more benefits to buying real estate with lease options. Without a doubt, you now understand why I am fully resolved that buying real estate with lease options is the fastest, easiest, and least expensive way of investing in real estate.

By Wendy Patton

For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.

If you found this information useful, please visit again soon at wendypatton.com.

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Buying Real Estate with Lease Options

Without a doubt, buying real estate with lease options is the fastest, easiest, and least expensive way to invest in real estate. Fast because it greatly increases your number of potential buyers. Easy because the buyer isn’t looking to qualify for a mortgage and waiting for a third party. Least expensive for the investor because you take control of the property without the costs of buying it.

Lease Options sign pic

Win-Win-Win

It replaces the adversarial relationship that often develops between a traditional buyer and seller as they dicker over the terms of the sale. The seller begins collecting rent without becoming a landlord and you, as an investor, find an end buyer to collect a larger lease option fee and begin collecting a little more rent than you pay to the original seller. The end buyer (that the investor also does a lease option with) now has a home without the hassles of qualifying for a mortgage.

Specifically, you as the investor have a minimum of cash come out of your pocket. That means you have more buying power to do more deals and control more real estate with lease options. You also have another major payday by selling the house for more than you owe the original owner when you sell for more to the end buyer. When the end buyer executes the option to buy, you collect your third and largest payday all from the same transaction. Here’s a short list of benefits that come from buying real estate with lease options:

  • A top sales price from the end buyer.
  • Positive cash flow.
  • The largest list of possible end buyers.
  • Minimum risk because you’re not the owner on the title.
  • No commissions or fees.
  • No maintenance (the end buyer is responsible).
  • A large non-refundable option deposit.

You’re offering a huge value to the tenant/buyer when you have an attractive financing plan. This translates into the ability to ask for a higher selling price (even in a slow market). Any reasonable tenant/buyer easily understands the concept of trading price for time and value.

Buying Real Estate with Lease Options for the Tenant/Buyer

One thing you do need to be able to do is clearly explain in detail to the end buyer exactly how buying real estate with lease options works. Make sure they know that eventually they will need to repair any credit problems and qualify for a mortgage. There will be a specific option period this needs to be accomplished within.

Explain they do have to pay an option fee up front. It’s up to you if it will apply to the down payment or not but it’s non-refundable. Applying it towards the down payment makes it easier and more likely the tenant/buyer will obtain a loan to finish the deal. Also, make sure they understand that because they want to own the home, they are responsible for maintenance and repairs. You are not a landlord.

Buying real estate with lease options allows them to determine if the neighborhood and house are a good fit for them without the obligation to buy. The lease option period also gives them time to shop around for the best possible mortgage. That a larger down payment will help them qualify for a mortgage when the time comes.

Explain to them that they need to treat the home as though they are buying it. They should have it inspected as they would an outright purchase – before signing the lease option agreement. Also, suggest they have a real estate attorney go over the lease option agreement with them. Explaining these kind of issues with them builds trust and makes the tenant/buyer more comfortable entering into a lease option agreement with you.

Buying real estate with lease options really is the fastest, easiest, and least expensive way to invest in real estate.

By Wendy Patton

For more than 30 years, I’ve used the Sandwich Lease Option System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.

If you found this information useful, please visit again soon at wendypatton.com.

For more exclusive content, please subscribe to my RSS Feed and YouTube Channel.

What did you think of this article? Please leave a comment below.

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Your email address will not be published. Required fields are marked *

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