Lease Option 225K

I am attracting alot of sellers on sub-2 deals with houses in the 200K + range. What kind of market is out there for homes like that when I turn to lease/option to a tenant/buyer? Anyone?

the same market that is there for the lower income folks. higher income folks have credit problems too. that’s the whole idea of this creative RE arena…creative financing. ;D


Do you have any tips for getting those higher income people? Should I just put out my L/O signs and run an add like I do with the others?


yup, same thing, just higher prices. best bet is a classified ad in the BIG paper of ur city

I have a house (My personal home) that I want to do some creative selling on, to maximize the profit on. How would one suggest going about this…

I how 140ish, comps are about 185 now, but maket is slowing so I’d be happy for 165ish. This is a “lower” priced home, but very nice. Most homes in the neighborhood are around 195-225

Would selling outright be good? FSBO, Realtor, LeaseOp, etc… If so, what is the best way to find a good LeaseOp canidate??



Clayton, where is you house located?

I used lease options for more than 20 years. I don’t use them anymore. Here is why: Here is a list of five things that may violate the law and cause the judge to classify the transaction as a “disguised sale”. This is not my list, but the list prepared by a Judge in Arizona who actually co-authored Arizona’s landlord/tenant laws:

  1. Collection of more than 1.5 times the monthly rent as Option Deposit.

  2. Collection of an Option Deposit or Rent Credit to be credited to a Purchase, or to discount the Purchase as in a Down Payment.

  3. Predetermining a Purchase Price, as in delaying or disguising a sale.

  4. The Lessee also holding an option on the same property they are leasing regardless if it is one document or two separate documents.

  5. The Lessee being responsible for maintaining the property.

If the lease is not recognized by the court as a lease, it doesn’t get the benefits that go along with a legally recognized lease. If the judge feels a sale has taken place instead of a lease, the rules governing foreclosures will apply. For this reason, possession of the property will be decided by a judge in position to decide matters of title and the process can be extremely expensive. Costs can run $10,000+, not including having to pay the back mortgage payments during the life of the suit.

Be careful out there.

Gee Gary, what can one do to get a deal like this done? ???


This was forwarded to me by an investor friend who ran into this problem. It was his transaction, he had lease optioned a property to a young married couple. The husband left her for another honey and she remained in the property, stopped making payments and hired an attorney. He was stunned because the judge ruled it a disguised sale and forced him to go through the foreclosure process. It cost him a bundle.

I know that legislatures are trying to clamp down on investors and creative financing methods, but this is simply how judges are taking a view of traditional lease options. The scary item is #4. This judge is saying that ANY sandwich lease (where an investor gets an option and re-options it out) is a “disguised sale”. Ouch!

Da Wiz

Located in SE Minnesota

Is that list now the law in Arizona?

Does anyone know if this is true also in California, regarding Lease/Otrions?

Lease options are legal in California and Arizona. However in Arizona and in an ever growing number of states, you had better be in compliance with the list above. It is not law, but it is how they are interpreting the law. In Texas, lease options are illegal unless you have title to the property, free and clear. As to the market, it is excellent in the price range you listed.

Da Wiz

Legal in Minnesota or Indiana??

anyone have any suggestions for my current place in MN. I want to move it “creativly” to help maximize it’s equity…

I wouldn’t mind holding it, and leasing it, if that’s a good fit for this type of situation.