Lease Options

Lease Options
There are quite a few ways to use them to make cash in real estate investing and many people specialize in them as a primary long range investing tool. It makes sense to include them in your real estate 'tool bag' and to incorporate a certain amount in your portfolio.

Lease options can generate short term cash quickly and enable you to use leverage effectively.

When properly constructed they provide low risk, stable real estate transactions that create a product that is easy to market.

The other aspect of this type of investing is that it creates a short term paycheck and a subsequent payday when the tenant buyer exercises the option and brings new financing to the table. Lease options also provide ongoing positive monthly cash flow and passive income streams.

There can be inherent pitfalls in the documentation when you buy property 'subject to' and then lease the house to a tenant buyer.

There are significantly fewer potential problems when you sell a property that you own - with your name (or your entity's name) on the title - than one you buy subject to the underlying financing with the seller's name remaining on the title.

The link below connects you to different discussions including avoiding pitfalls, precautions to take and how to properly structure your deals.

Lou Brown told me on his 12 day Hawaiian cruise in 2003, that he had discovered the vast majority of people who owned his Whole Enchilada (a complete real estate investing paperwork system), had very little idea how to use the paperwork effectively.

He said when he found this out he created an intensive seminar dedicated to teaching how to use the powerful documentation tools created through his 25+ years of hands on investing experience. His paperwork includes almost all of the documentation that we use personally. We have, however, modified a number of them to accomodate local statutes and recording formats.

Lou's documentation system is a complete one for the real estate investor and has comprehensive built in tools to create lease options correctly.

We use his paperwork as well in our business. Lou has done a lot of lease options himself over the years.

Greg Pinneo prefers to use them to sell property quickly when market prices drop unexpectedly.

Click on this link and read more about lease options.