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Lease Option

By Andrea Weule - 2/10/2019 6:39:00 PM

Lease Options

Lease Options, also commonly known as Rent to Own, have become more popular over the last few years. Slow and strict lending restrictions have complicated the home buying process. Also, people have struggled with credit scores, lease options allow these people to get into homes in today’s market. The best part is you can make money working these systems.

Lease options are a wonderful strategy for no money and no credit deals. These are different than wholesale deals because they have a few more moving parts. The great thing about lease options is the beauty of making money up front, making positive cash flow each month, and then making money again at the end when the option to buy is exercised.

Here are the basics of how it works:

  • Up front: Take the non-refundable option price that you negotiated with the buyer and subtract the option price you negotiated with the seller. This will be your up-front profit.
  • The Middle: Take the monthly payment your tenant buyer will pay you and subtract the monthly payment you will make to the seller. This will be your profit each month.
  • The end: Take the purchase price that you negotiated with the buyer for the future closing (less the cost of the option) and subtract the purchase price you negotiated with the seller (less the cost of the option). This will be your profit at the end of the deal.

For more information on our lease option strategies, fill out the request information page and we’ll get back to you as soon as possible.

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