:anon I just want to know how many lease options can a person do with 7 thousand dollars and what is the most you would give for an option/downpayment?
I’m guessing that you are the one purchasing a property using a lease option…
Well…technically…you could do 7,000 deals at $1 per deal…(As long as there is compensation to make a Real Estate contract legal.)
Every situation is different (different market prices, different motivation from sellers). Some people will take $500 option consideration, other people you may have to give more so that they may use it for moving expenses.
I’m also thinking that you need to look at your exit strategy to determine how much consideration you would be offering. (Are you keeping it as a personal residence, turning it into a Sandwich L/O, assigning it to another investor, etc.)
Best of Luck,
Yes, I am the one doing the purchase but wanting to use it for a sandwich lease. I want to make the best investments I can and eventually do the sandwich leases for a living. I just want to make sure I could negotiate the lowest payments possible so that I could make a decent profit per transaction possible.
In the classes/seminars i’ve attended, the different forums i’ve studied, and the deals i’m trying to do…I’ve found that it is suggested to get 3%-5% from your tenant/buyers. Depending on how motivated the seller is and the particular market…i would start at $500 for the seller and see what happens.
Obviously, each deal is different. It’s better to get in light, give yourself plenty of time, and find the sellers true motivation.
Two things to remember though…
- Make sure that YOU dictate the terms
- Pigs get fed…Hogs get slaughtered
Hope this helps,
Thanks for the information hiinvesting! I also have another question, do I tell them i am an investor and exactly how I am going to use the property? Most owners want to dictate the terms and I generally try to mouthpiece them to see exactly what they are looking to get for the property per month and as a tool to get what I want, I add a few dollars onto the asking price. Is this a good idea?
1st) Some people say they are investors, some say home specialists, home consultants, etc. I, myself, have to disclose, disclose, disclose, that i’m licensed in my state and that I buy and sell properties in the attempt to make a profit. Most good/successful investors never try to hide any attempts on what their ultimate goal is for the property. If you “slide” around any topics…it comes off like your trying to deceive someone or be shady. Honesty/Truthfulness will get you a lot farther. I’m held to a higher standard than most others because I have my real estate license.
2nd) If the homeowner is wanting to dictate the terms then they might not be motivated enough.
I’m attempting to take over all of the sellers PITI and possibly their POA fees. Then rent it out for slightly more than that number (my monthly cashflow), if the market allows for it.
As far as future selling price to the tenant/buyer…that is totally up to you. Some investors give a better cash-out price for those people who pay on time, have better credit, or give them a better cash-out price if they exercise early.