Hi, I am a brand newbie, with warm milk around my mouth, to the real estate investing game. My intention is to focus on either lease optioning or wholesaling for my first year, but I’m having a frustrating time trying to figure out which will be more effective.
Can anyone share some of their personal experiences between the two methods? Also, can anyone suggest a good template to follow for a business plan for real estate investing? Thank you.
SemperFi76
When you’re selling property via a lease-option, you are really just a landlord. Most lease-option buyers do not end up buying the property.
Wholesaling is just a form of flipping.
These are two completely different businesses. So, I’d say that you need to determine what you want to do and what your market will support.
Good Luck,
Mike
I agree with Mike as both are good but very different.
Lease Options are good for someone new to real estate as long as you educate yourself on how to do it. In my experience if done right about 70% of your tenant buyers will actually buy the property.
I like L/O a little better than renting since the folks seem to take a little better care of the property, IF they truly feel that they are working towards owning it some day.
Wholesaling is good to if you have a pretty large buyers list, and or are an expert at marketing your properties. I have friend of mine, Mark Evans, who makes a ton of money each month Wholesaling, but he has been doing it and building his “Buyers list” for almost 10 years.
It is like Mike said it depends on your background and your goals.
Thank you for your comments. Much oblige…
Being that I’m just getting start with learning the process, its difficult for me to stay which of the two (lease-optioning or wholesaling) methods my market will support more favorably. At face value, it looks as though it will support both because the high & low markets are selling well (wholesale) while the middle market is being over flowed with foreclosures (L/O).
Either way, its obvious that I need to continue with building my buyer’s database, and getting my name out there. My goals for this year are to primarily flip (wholesale) approx. 8 homes, and buy & hold (rentals) at least 2 homes for 5-7 yrs.
As I’m sure you seasoned investors already know, and what I’m finding out is that…there are markets within markets so I’m going to have to be flexible in that I may only be able to flip 2 homes and L/O 8 homes and buy none.
Thanks again.
Whoa there! When you are referring to lease optioning, are you on the landlord side or tenant side? Little vague from your posts.
Very bad idea to be on the tenant side of L/O from an investor perspective, in any market situation, but especially at this time and depending on your state and the laws concerning such.
Raj
And maybe wallace has a much better L/O program, but figuring 70% of L/Os closing is pie in the sky thinking, IMO. The average L/O rate is approx 25% actually go to closing in the timeframe specified. I already have financing lined up, have credit repair in place for the tenants and still only have about a 45% close rate on L/O. Now, if you count those that NEVER went into an L/O, but were able to close the property upfront because of the financing I already had available, then, yes I’d agree with the 70% number.
Raj