Lease option fee %?

General Real Estate Investing
1

Hey All,

I was wondering, what percentage of the purchase price do you typically get for a lease option upfront?

Mike

2

I shoot for 3-5%. 2% with a short term promissory note, maybe. It takes 3.5% for an FHA mortgage, that’s my thought’s anyway. Herbster

3

Hey Herbster,

This might seem like a silly question. But if they can afford to pay 3.5% down why would they “rent to own” when they could qualify for the FHA loan? :huh

4

It takes much more than a downpayment to qualify for a loan. Credit score, time on the job etc. Seek out a Mortgage Broker for the requirements. Somewhere I have a link about FHA’s, I think I got it here. Run a search it was only a few months ago. Herbster

5

Also, you have to be able to prove your income these days. If someone is a contracted employee or self employed then they need to have 2 years of tax returns to prove their income. This is another reason someone may want to do a lease option. There is also the issue of credit repair, which a lease option gives the TB time to do.