mochilero
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Cash: $ 2.60
Posts: 11
Joined: 22 Aug 2005
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I understand the principle of a lease-option deal, but just finished a book that suggested using a lease-option on both sides of the transaction. In other words, lease a home (no money down) with an option to buy, then find a tenant to lease it with an option to buy (at a higher rent and price), who gives you a big option fee up front. Have any of you had experience with these, and with what results?
The authors use examples where they put no money down, then collect $8,000 to 15,000 as a non-refundable option fee (applied towards the purchase price, of course). It seems it would be difficult to find sellers that will lease to you for years while letting you sub-let it, and really tough to find buyers with money for large option fees that wouldn't just go out and buy a home. Any success stories here using this method?
Steve
http://www.HousesUnderFiftyThousand.com
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Tue Oct 04, 2005 1:45 am |
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sayyes
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Joined: 02 Jul 2005
Location: Newport, RI
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It would seem to me that if you were able to lease a house with $X, than why would someone turn around and pay more than $X to lease the same house? They can find similar housing for $X so they aren't going to spend more (or much more).
It seems this would only work under two circumstances:
1. The housing market is exploding, so something you buy is worth exceptionally more than what you paid for it shortly thereafter.
2. Buying prime real estate. In other words, buy real estate in a great market (beach front) where there aren't alot of sellers and buyers can't find comparable houses.
I don't think we're in a situation where 1 applies anymore. If you find 2, there is still an exceptional risk that may not be worth the reward.
Just my opinion.
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Tue Oct 04, 2005 2:58 am |
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