Lease Option Gone Bad...

[Sean Morrisey]

Investment Info:

Single-family residence buy & hold investment in Yorkville.

Purchase price: $286,000
Cash invested: $28,600

My achilles heel...bought this home at the height of the market structured as a "lease option" to the tenant-buyer. Tenant buyer moved in 2011 and I have continued to rent his home monthly since then.

What made you interested in investing in this type of deal?

Bought this home for a tenant-buyer interested in performing a lease-option with a $10,000 option fee and a credit of $175/month for closing cost credit. Purchase never consummated from tenant-buyer and I continue to rent this home through 2018.

How did you find this deal and how did you negotiate it?

MLS...negotiated by an agent.

How did you finance this deal?

10% downpayment with a 80% first mortgage and 10% second mortgage.

How did you add value to the deal?

Not much...it was fairly turnkey.

What was the outcome?

Rent the home to this day.

Lessons learned? Challenges?

Lease options are purely speculative.