Questions About Lease Options

[Adrienne Bryson]

So I get the general concept of wholesaling lease options.  It's basically the same as "regular" wholesaling except you're dealing with rent to own rather than outright purchase, and your end buyer is going to be a retail buyer rather than an investor.

But I have some questions about the mechanics of the deal...

1) When you put the house under contract, are you actually entering into the lease?  Will you be expected to make lease payments, pay a security deposit, etc?

2) When you assign the contract, does the end buyer have to make a down payment, or a security deposit?  If so, does that basically mean the end buyer will need a fairly large amount of cash in hand at signing?

3) My understanding is that there is no closing (at least not that the wholesaler is involved in), only lease signing.  If this is the case when does the wholesaler get paid?  At the time of assignment?

4) After the contract is assigned, is that the end of it?

[Adrienne Bryson]

@Bill Gulley I read through 5 pages of forum topics with the search criterion of "wholesale lease options" before even posting this question.  I am no stranger to doing my own research.  However, having searched through the forums, blogs, and outside of BP, I have been so far unable to find a full explanation of exactly how it works.  LOTS of articles just covering the basics, LOTS of websites that give an outline of how it works then direct to a page to pay $100+ for personal tutoring, LOTS of topics saying "what can I do" and the response being "lease with options" and the conversation ends there.  LOTS of other people asking questions about lease options and nobody even responding.  I've even read a couple topics where each sort of answered a couple questions, but the answers were contradictory so I'm right back to square one of not actually knowing what's what.

I am still researching, but I foresee the possibility of using a lease option with one of the leads I'm working on now so I was really hoping to have this tool in my metaphorical toolbox before I meet with the seller and make an offer.  I would hate to walk away from a motivated seller just because I can't find a clear answer.

Hopefully one of the more experienced investors will give a newbie a helping hand.