Lease Option Information

I hope this helps. I copied and pasted this from another thread from (thishousebuyer).These are some sample contracts that I would use, but I would suggest running these by your real estate attorney to see what they say before you use them.

__________________

File Attachments

Contract_Wholesale_Buying_simple_legal.doc (28.5 KB)
Contract_Wholesale_Buying_simple_letter.doc (27 KB)
Sample Purchase Agreement.doc (19 KB)
Contract_Pro-Seller_Cash_Easy_For Wholesales.doc (26.5 KB)
Contract_Purchase_and_Sale_Agrmt_Pro-Buyer.doc (31 KB)
Option_to_Purchase.doc (16 KB)
Option_to_Purchase_FLEX_OPTION.doc (39.5 KB)
assign_cash.pdf (4.46 KB)
Contract_Assignment.doc (26 KB)
contract_termination.pdf

Hello every one

I'm in Tampa,Fl I would like to start using lease options. How can I use transac. funding to buy a house to sell to some one that will be leaseing the house. The family has good jobs but bad credit. How much money should they be putting down.

Thanks you

Sorry, I have been out of town and did not see this earlier.

I am exhausted right now and have to be at my J.O.B. in the morning but will send you contracts tomorrow night if that isn't too late.

PM me with your personal email. Be sure to spell out the "at" and "dot" or it erases part of the address.

Same to you. PM me your personal email.

Hi!! Kareng Let me ask you regarding a L/O sandwitch do I need to close with title company when I do a L/O sandwitch so I can get the Guaranted deed or can I do it my self with out a attorney or title company and how much do title company charges to hold tilte to get released?

Thanks
Ernesto G.

You can do all the paperwork w/o an attorney or a title company for the initial L/O. (Just make sure you have initially had an atty check out your contracts that you use to make sure they are legal in your state)

When the T/B decides to 'pull the trigger' and purchase the house you WILL have to do so with an atty or title company.

As far as what a title company charges, call one and ask them for an accurate price.

What is a cooperative lease option? I just ran across this on this thread and i don't remember Greg Murphy mentioning that while i was reading chapter 4 in your town your realestate profits I would appreciate an explanation of this technique thank you so much.

Sorry it took me a while to get back to you on this.

A Cooperative Lease Option – is when you purchase the property from the owner on a lease with an option to buy. You then find a buyer who will pay you to step in your shoes. This is a wholesale deal. You sell your contract to a buyer.

It is called a Cooperative Lease Option (aka Wholesale Lease Option) because both the buyer and the seller are “cooperating” with you and know exactly what is going on. They know you are selling the contract (deal) to a buyer – it is usually for the option fee.

How much? Usually around 3%-5% of the purchase price can be negotiated. Example: The price of the home is $100,000 – you would get approximately $3,000-$5,000.

This is quick and clean. You set the deal up between the Seller and the Buyer, collect your fee and you are finished.

Karen

"They know you are selling the contract (deal) to a buyer – it is usually for the option fee."

So if you are out of the picture with the option money, how does this affect the T/B when they go to purchase the house? As strict as lenders have become, do they look at the option money the buyer paid as payment for the option, an assignment fee, or will they still consider it a down payment? Seems to me that the T/B could get the stinky end of the stick on this one.

This works very well.

Say I get the house for $100K. When I find my buyer, I make a new contract between seller and buyer with price of house @ $105K (I charge 5% option fee) showing $5K down payment.

If you have a mortgage broker (which I have) that understands how to work w L/Os it is not a problem as long as house appraises correctly.

Karen

Lots of good information here. I had always thought about doing lease options but I live in a small town in SE Iowa a little over 25,500 population. It seems people here don't have a lot of knowledge about RE techniques so will try a larger populated area. I hope everyone is successful and I will definitely start reading the threads on this site to learn more about this. Good luck to everyone.

Karen
"They know you are selling the contract (deal) to a buyer – it is usually for the option fee."
"Say I get the house for $100K. When I find my buyer, I make a new contract between seller and buyer with price of house @ $105K (I charge 5% option fee) showing $5K down payment."

...so in essence you are not assigning a contract, you are creating a new one, between the seller of the home and the tenant/buyer, correct? Doesn't this make you more of an agent rather than a principal in the transaction? What protects your interests in the deal? Not trying to be difficult, just trying to understand the concept and the flow. On the surface, it appears to me that the T/B would have trouble getting credit for the down payment in this scenario, but then again, I'm not giving any seminars either. Just my opinion and I may be wrong.

Glad you like it!

Sorry, it took me a while to get back to you.

I am assigning the contract.

Karen

I bought my first investment property with a lease option, what a great tool for a first time investor to get their feet wet. The one caveat is that when your in a lease option contract you should really think twice about doing upgrades to someone else's property. If your going to give up the property in the future this might take away from you calculated profit.

the L/O Queen

Thanks Karen

Remember to BOOKMARK this

Thank you! ;;)