Really, if you think about it, buying a property and renting it out is nothing new in the world of real estate investing. The practice has been going around much longer than any of the real estate gurus that created these "get rich" real estate courses!
So why is everyone making such a big hoopla about doing lease options?
No Money Down Deals
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One of the many reasons that lease options are so popular, is the possibility of creating a No, or Low Down payment to purchase the home. This is done by working directly with the seller of the house, and hammering out a deal between you and the seller.
That means, no banks, no credit checks and no qualifying! Of course, not every seller is going to be open to the idea of flexible terms for you, so it would be a good idea to work with motivated sellers.
Working With Motivated Sellers
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Although these deals are more difficult to find, they are out there and they exist. You just have to know where to find these deals. Many of these deals can result in no down deals if you offer the seller something that they desire. One such item is the sales price. Offer to pay maximum dollar before repairs to entice the seller to offer you good terms for buying the property.
While other investors come by and offer them low-ball insulting offers, you might get the nod for coming out and offering a better deal.
Remember, these people are in distress some how, and if you put together a fair offer for both parties, you may get the property at a really good price.
Giving To Get What You Want
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Nobody likes to be sold. Don't make your seller feel like they've been ripped off! Creative negotiating is the key to securing a great deal. There's no need to strip the seller of their dignity by insulting them with a totally one-sided offer. Make the seller feel like they are getting something out of the deal and you'll close more profitable deals faster with less problems.
While you are negotiating with the seller, find out just what they need to get rid of the property and go from there. Most sellers in distress don't have a lot of time or options and may offer you a very good deal.
Also take in consideration the condition of their property. You cannot pay full price if the house is in need of repairs. A good suggestion would be to only look at houses that are cosmetically damaged, and not structurally damaged.
Needing a new roof or new plumbing installed is different than just cleaning up the yard and putting a fresh coat of paint on. Actually, the more cosmetically unpleasing the property is, the better your negotiating leverage is. You'd be surprise the amount of discount you can get from an unpleasant looking property!
To ensure the property has no major problems, bring along a handyman and have them hand you estimate for getting everything done. Once he does, simply hand that to the seller and show them how much it's going to cost to get this property back into a livable place. If the seller can't or won't fix the problem areas, ask them to add the cost into the final sales price to make it fair for both parties.
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