starting out Lease option

[Natasha Hylton]

i am having trouble finding an investor friendly attorney in so cal thats familiar with lease options. also, if you work with an attorney and want a third party to take payments escrow , can you do it through the attorney or is it best with an escrow company?

[Bill Gulley]

Natasha Hylton, lease-options, of any kind have thier place. They, like any other arrangement other than a straight pruchase, are not a solution in all cases.

If you build a business around lease-options in RE, you would be much like an ice cream store selling only strawberry, nothing else. Those sellers that are really motivated to walk away or take very little down are much like those who only buy strawberry ice cream. The owner of that ice cream store probaly won't be in business very long.

Taking advice from any forum should be done with great caution, with an understanding of who has a vested interest in promoting strawberry ice cream. If a wholesaler of strawberry ice cream tells you to call them, you can bet that, while you may get general marketing advice in some niche market, all you're going to get is different flavors of strawberry.

As to you comment about an "investor friendly attorney".... all attorneys I know are "investor friendly" what makes them seem unfriendly is when an investor gets involved in wierd, unconventional, dangerous, unethical or illegal activities. So, it seems when you ask that you may well be asking an attorney to get involved in something they don't want any part of and for good reason. If you have not paid them thet are under no obligation to explain anything to you and they may just say they don't know about that. I also don't know of a decent RE attorney who doesn't know more about lease-options than anyone on this site as they are used in residential deals in thier area.

After understanding the first rule of RE, location, location, location, the second rule is that all RE is local. No one in Tim-buck-to is going to be able to guide you in doing things in your farm area like a local RE attorney.....get one and use one!

A cooperative lease or L/O is seen in many areas as practicing RE without a license, period! If that is the case, no attorney wants to get involved in such transactions, your saying they are not investor friendly is then like saying I can't get an attorney to help devise my plan to rob a liquor store, then saying that attorney is not like liquor! Some don't drink, but many do, responsibly.

If you are serious about getting into RE then consider that every RE deal ever done takes money at some point. If you and those you work with have money, fine, but you're also back to the strawberry ice cream store, only dealing with those with money. Otherwise, you will need to understand RE financing. If you don't understand financing and you do a successful L/O, you got lucky.

You begin doing L/Os by looking at the end of the deal, obtaining financing and then work backwards to meet the financing requirements basically. I can teach a monkey to sell a lease-option to some schmuck with no or little money and bad credit, that is not where you start, you begin with those buyers who can perform. If you don't have a good grasp of financing, the end goal, you can't work toward that goal.

Before you start I suggest you learn RE basics, then start adding tools to the box, learning just L/Os is like a plumber going to work with one wrench. Look to Sub-to, wraps, seller financing, different financing arrangements, leases and options, understand what a first right of refusal is and how to use it. Three weeks of good study can put you in a totally different frame of mind and an understanding of RE that will answer your questions as they all are due to the fact that you are targeting one thing, asking how cold to keep the strawberry icecream. I do understand that is appears complicated.

The guru types might say all you need to know is this and that, because that is what they are selling! BTW, what they sell or mentor may be of value, but if they are not willing to spill the strawberries and show what they advocate so that you can clear it with your local attorney, I suggest you not get involved with them. Some are good about explaing what they do, some hide the nitty-gritty, so if anything is hidden, you can bet there is a reason and there isn't anything that is a secret in RE, there is nothing new, different or exciting.

Best of luck! :)