Nothing that I know of has proven more successful for beginning real estate investors than Cooperative Lease Options (AKA — Wholesaling for Quick and Easy Cash). By simply harnessing the power of Cooperative Lease Options, you’ll immediately begin making large 5-figure deposits into your bank account in about a week. I can also show you how to make more money with sandwich lease options, but nothing beats the Cooperative Lease Option for a fast payday and getting started in the lease option business.
I love the problem-solving power of cooperative lease options. I find it amazingly easy to negotiate and structure deals with both sellers and buyers.
Why You Should Start With Cooperative Lease Options
There are many reasons to start with cooperative lease options. You might already know that I prefer no-cost/low-cost deals with
almost no risk and that is exactly what these are. In fact, these even stay away from one of the remaining small risks associated with sandwich lease options. That’s the very small risk that the tenant-buyer won’t complete the purchase.
The cooperative lease option is about you bringing together the seller and tenant-buyer and then stepping out of the deal. If the tenant-buyer doesn’t complete the purchase, you are already out of the deal with no remaining risk, although you might provide your knowledge to find a way so the sale can go to the closing table.
And…
…. there are more powerful reasons why you want to have
Cooperative Lease Options in your investing toolbox….
When a Cooperative Lease Option is Right for You
Here are more (of many) reasons why a cooperative lease option can be the
right tool for the right deal.
1. When you (the investor) are just getting started and could use a quick deal
generating fast cash.
2. When you have several sandwich lease options under contract generating
monthly rental income (say $400 per house, per month) but it will be a few
months before a tenant-buyer closes a purchase to generate a bigger payday
for you.
3. You have a possible deal that will generate a decent purchase option fee for
you but there really isn’t much equity (big payday) for you to earn by
holding the rental contract for a few years.
A Cooperative Lease Option works well when the seller doesn’t leave much meat on
the bone for you (the investor) to stay in a sandwich lease option for a year or two.
How Easy and Simple a Cooperative Lease Option is Made for You
The course comes with every master contract that you will need. To get off to a great start, I encourage and show students how to convert the master contracts that I provide into your own custom master contracts that you will use again and again to save you time when working on every cooperative lease option deal.
It’s as simple as creating a master contract folder on your computer where you fill out the contracts that come with the course with your own individual information. Typically, this includes your own name, the name of your LLC, your state, and your county. You fill this in once on your own masters and keep the masters separate from the contracts you fill out for each unique deal.
After that, each time you have a cooperative lease option deal, you only need to fill in the specifics for that deal. Those are things like the date, the seller’s name, the address of the property, and of course the dollar amount. Quick and easy — it can even be done while you are meeting with the seller or tenant-buyer.
Your custom master contracts speed up an already fast to-do deal!
The Basic and Simple Process for Cooperative Lease Options
Here is the quick low down of what Wholesaling Lease Options are all about.
1. Find a motivated seller who wants to sell their house on a Lease Option.
2. Get the property under an “Option To Purchase” contract.
3. Find a qualified tenant-buyer who has a good down payment and has a good
chance to get a mortgage in 12 – 18 months.
4. Sign the Lease Option paperwork with the tenant-buyer.
5. Assign the Lease Option documents back to the seller.
6. Keep the Option Fee and give the seller the first month’s rent.
7. Put the tenant-buyer in a credit repair program with a mortgage broker.
8. Deposit your money and move on to the next cash deal!
Real simple… truly! That’s why I love this business so much. And if I can do it – anyone can!!!
In a few short hours, anyone can easily do 1-3 of these deals a month. Imagine what you could do with an extra $5,000 – $12,000 in “Hip Pocket Cash” every month!
What Else is On the Cooperative Lease Option Checklist?
From your master contract folder, you make a copy of the provided checklist that goes into a new folder set up specifically for the property you are writing a deal for. (Tip: I typically title the folder as the address of the property.) You want to start with the checklist because it generally lists the tasks in the sequence that you want to complete them. There might be minor changes in the sequencing for a specific deal, but the checklist provides a very useful guide throughout the entire process.
Here are a few highlights from the checklist:
- At the top of the checklist, type in the house address so that you always know which deal this checklist applies to.
- Make your proposal to the seller.
- Check if the mortgage is up to date.
- Get a key or access to the home to show it to prospective tenant-buyers.
- Advertise the home. (See the script to screen tenant-buyers.)
- Tenant-buyer fills out the rental application and puts down a non-refundable
deposit. (See forms). - Verify the application and run a credit check (see detailed process).
- Collect option fee from tenant-buyer at the time of signing documents or
before.
At the top of the checklist, type in the house address so that you always know which deal this checklist applies to.
Of course, there are customizable contracts and templates throughout the entire process.
How to Structure Cooperative Lease Options
From beginning to end, the process is remarkably simple. This is nothing more than creative investing that most people just don’t think of. First, you use one of the many methods I share to find a seller in a bit of a pickle that needs some help with this type of creative selling.
Then you explain in a general way how a lease with an option to purchase works. What’s important here is that you gain some control over the property. You do this by signing a purchase option agreement between you and the seller for some “consideration.” When it comes to a cooperative lease option, you want the option fee you pay the seller to be very small. You probably want to start negotiating for as little as $10 to $100. This is important because your money comes from a much higher option fee that you collect from the tenant-buyer. If you pay too much to the seller, the tenant-buyer fee will only be reimbursing you rather than earning you a decent fee in exchange for your services and knowledge of how to put the deal together.
The purchase price you have under contract in a cooperative lease option is the same price you offer the tenant-buyer. What you want from the tenant-buyer is the full “traditional” option fee. A traditional option fee is between 2% and 5% of the purchase price. At 3% on a $250,000 purchase price, the option fee you collect is $7,500. Once you collect the traditional option fee, you “flip” your purchase option agreement (you paid $100) to the tenant-buyer. At this point, you step out of the deal. It becomes the responsibility of the seller and the buyer to close the deal at some future date before the option period expires.
What’s great about creative investing is that there are variations to fit every situation.
The cooperative lease option is only one tool in your toolbox:
1. Advanced strategies for Buying and Selling with Lease Options.
2. Your Wealth Building Arsenal.
3. Investing In Real Estate with Lease Options.
4. Add Personalized Coaching.
5. Cooperative Lease Options.
6. Expand to Get the Deed “Subject To.”
7. Round it all out by Working with Realtors.
To your success,
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.
