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Updated over 8 years ago on . Most recent reply
Lease Options
Hello BP Community,
I have been on BP for a little while now, listening to the podcasts, reading the posts on the forum and taking the advice that everyone else has been giving and this is my first discussion post so here it goes...
I have been working with my family on looking for our first property to invest in for several months and we finally were able to get our hands on a good deal. It is a short sale that we were able to sweep up because the previous buyer was not able to get their financing in order (lucky us!). We have vetted several contractors and we are very pleased to find one and we are happy with him and his team's work. We are under our budget from what we projected the costs of the renovations would costs now comes the part where we will be working with our broker to determine the listing price for the property.
My question for the BP Community is this, because we have been able to acquire the property at such a good price should we flip the property or find a tenant with a lease with the option to buy? The property is in Westchester County, NY and obviously we don't have much experience and we are also keeping an eye on the market for the next deal.
Most Popular Reply
why not start with a lease with option, That way you can test the waters with having a tenant, while selling the house at the same time. You can negotiate a great deal on your end with the tenant, and cash out. If you add 5% appreciation, and 5-10% premium, and make it for 18 months, with say $10k down, Youll make way more in the long run, doing that will get you at least $25k more for house(if its over$100k) within an 18 month agreement. If they decide after 18 months they dont want to flex their option to buy, its even better for you because you keep every penny they spent on the house, and then you can start over and collect another fat payment up front with another 18 month lease option. If that happens, you made over $50k more on that house in 3 years (or more depending on appreciation %) Everyone wins