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?