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Updated about 9 years ago,

User Stats

22
Posts
6
Votes
Brian Sinclair
  • Deal Generator
  • Glen Burnie, MD
6
Votes |
22
Posts

Lease Option Program - Buy & Hold Investors - Opinion

Brian Sinclair
  • Deal Generator
  • Glen Burnie, MD
Posted

We are putting together a program that will allow Buy & Hold Investors to find properties they want to make rental income with and controlling interest in them without having to having to get a bank loan to purchase them. 

What do you think of this program?

Let's say we purchase a property and Lease Option it back to you for 3 years. The option price is set today, so you gain the appreciation for the next 3 years. There are NO rent credits.

Requirements:

Location = Any, it doesn't matter to us.

Annual Cap Rate = 10% or higher

Annual Cash-on-Cash Return = 15% or higher

LTV = 65% or Less

Proof of Funds = 10% Option Fee, Repair Cost & 6 months of Lease Payments

**ONLY NON-Owner Occupied Properties**

Fees:

$2k - Loan origination Fee (included in Loan)

$2k - Processing Fee (included in Loan)

10% - Option fee (Paid at signing of Lease Option)

5% - Increase in Option Sales Price from the Original Purchase Price

2 Months Rent - Security Deposit (Paid at signing of Lease Option)

What we need to evaluate a deal:

  • Property Address
  • Minimum of 5 exterior photos & 5 interior photos
  • Purchase Price
  • Market Rental Rate
  • CMA from the MLS and from a Licensed Realtor. CMA is to include the Retail Comps and Rental Comps
  • Proof of the repairs which needs to be in writing from a licensed and insured contractor. Must include cost of materials and labor, plus the about of time to do the work.
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