OfflineHello Family,
My wife and I are currently looking for a new place. Our goal is to learn the best stategy possible to get the most house for the least money, save up a sizeable down payment, depending on what's needed and buy it. While on our search for a new place to rent, I contacted an investor who asked what my income was. When I told him he said, "why don't you buy a house" and I said "we're saving for a down payment", and his reply was all I needed was a security deposit. Now I knew immediately thanks to Dean, that he was talking about a lease option. Question: Is this a good way to go? We just paid off all of our debt and are rebuilding our credit. Any tips are greatly appreciated. God bless.
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Hey guys i guess this one slipped past the crowd. Any advice on this subject would be extremely helpful. Thanks everyone.
.....if you structure it properly.
A lease option is only as good as it's negotiated. As the buyer, you'll want the following:
-As low a price as possible
-As long a term as possible
-Lowest upfront option consideration possible
-Highest monthly rent credit possible (keep in mind that to count as part of your down payment, a lender will only accept rent credit above what market rent for the property would be, but any additional can be used to reduce the price of the house or cover your closing costs)
-Have seller cover any repairs over a certain dollar amount (say $500)
A few other hints:
Make sure you put an assignability clause into the option. That way, if you decide not to purchase the house down the line, you can assign your option to another buyer and make a profit even though you don't end up buying the house.
Record a Memorandum of Option with the county so your interest in the home is protected
Make sure you know how much the seller owes on the house and what his monthly payment is. Put a clause in the contract that allows you to pay his lender directly if he ever falls behind in payments.
That's the basics. Let me know if I can help you out in any other way. I've done tons of lease options and if it's set up properly, you'll be just fine.
Mike Sumsky
http://www.myleaseoptionhomes.com