Lets talk about a Lease Purchase!

[Josephine S.]

BP community,

Hello to all I wanted to start a discussion on Lease Purchase, I want to know how to decide when an investor should consider this solution to a seller. If anyone could please give examples, or scenarios of previous lease purchase agreements structured.  I would greatly appreciate any help and advice on this topic. Thank you for your time and reading this post. 

Kind Regards, 

Josephine

[Steve Vaughan]

Hi @Josephine S..  The situation that has worked best for me in the past has been low equity, decent houses with homeowners with a sudden, time-sensitive problem.

For instance, I had someone call that suddenly faced a job transfer.  The job was too good to pass up and he was about to fall behind in payments.  He bought only a couple years before and didn't have the time or equity to list with an agent.  He wasn't buying again right away.  I did a 30-month lease option with 1% consideration for his mortgage payment with the right to assign.  I put in a TB for 24 months and 4% consideration, giving me a few months to do something else if the TB didn't exercise. 

I believe he called from my targeted craigslist ad.  Not a generic I buy houses ad.  More like- 'Sudden Seller?  I am looking for a house or plex in (specific area)....and can close quickly. Not an agent....'

Houses that need a bunch of work are not a good fit, as you will not be the owner.

Good luck!