Hi, curious if anyone here has opinions on lease options. I am focusing on doing them as my first deals. I am new to REI and wondered what people thought of using them to start out in the biz.
I just felt there were so many creative REI paths to take, narrowing down to one to start off with would help me focus.
cs1977 I am not impressed with the lease option personally there are safer ways to obtain property… Also there are laws coming into effect that will stop people from doing them! If you wan’t to do them
A. Get a good attorney to do the contracts
B. If you are going to look into lease options also look into Sub-2’s
C. Look at This site http://www.cashnowusa.com/ John $Cash$ Locke is a very smart guy that knows a ton more then I do on this subject!
And as we all know there is risk associated with any activity whether it be REI or walking across the street. The key is to select activities that will minimize that risk!
So here is the question you need to answer for yourself if you were to buy into a lease options and paid on it for two three even four years then the owner wanted there house back how hard is it for them to get it?
Pretty simple if you really think about it! All they need to do is say that you did not make a payment.
Now take that same house if you found an investor to purchase the property and/or you bought the house yourself and three years later they wanted the house back it is Impossible for them to get that property. Unless they wanted to buy it back from you.
So lets look at the big picture here Lease options are ALMOST illegal in Texas, Colorado, and many other States So if you are going to do them Hire an attorney to overlook each and every contract as I would hate to see you buy 10-20-300 houses and have none of the contracts get held up in court it would be years of work down the :flush:
Colorado’s problem with lease options is simply that you are putting time restraints on how long the people have to purchase the property!
I guess this was a two part question and I only answered one!!
So here was two!
Personally for you, what type of REI has been the most successful?
I have been dealing with short sales now for years and have had great luck with either buying them myself and or whole selling them to other investors. Currently I am keeping the best and selling the rest! See I have a short sale team that is all they do, So on any given work day they are on the phones with banks I even enjoy negotiating and love doing short sales.
I am closing on one today here are some numbers of what I expect on a short sale…
Appriased value $430,000.00
First mortgage$296,471.00
Second mortgage $111,432.88<— (before short sale)
I am closing on that property today for $307,903.88 so really close to 70% LTV. Most investors would look at this deal and run. I look and laugh and think yeah I will buy it!