Leasing with option or rent to own or rent with option to purchase all mean the same though each may be done a little different. They are still the best ways for buyers and sellers to get together in this tough real estate market. Lending guides lines are tightening even as I post on this subject. Fannie and Freddie are making it very difficult for lenders to lend unless you can show proof that what you’re borrowing you don’t really need.
This week I’m going to share with you how I structure my rent to own/lease option deals to make sure I get paid.
First off, remember that the beauty of the lease option is there are three
basic yet different ways to make money. You can make money from the “option money” a
tenant/buyer pays you when they move into the place. You can make money from
the cash flow on the monthly rent you collect. And of course, the big payday is when you
sell the house to the tenant/buyer.
Let’s begin with the big payday when you sell to a tenant/buyer. When I’m
deciding to do a lease option deal. I want to make sure there is at least a $30k spread on the back end for me. What this means is that if I get a house under option for $150k, I want to be able…
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