Real Estate Information

Various Aspects Of The Lease Purchase Business


In a previous article, we wrote why we believe that Lease Purchasing is the perfect home-based business, here we want to briefly touch on some of the actual aspects of operating such a business, the pluses and minuses and why Lease Purchasing represents a win-win situation for the seller, the tenant/buyer and just as importantly, you, as the business owner.

One of your goals in operating a Lease Purchase business is to contract for property that you then move to the tenant/buyer. There are a number of unique strategies that can be employed to reach this end.

You can lease purchase the property and then sub-lease to a tenant/buyer. In this strategy, you are taking on the responsibility for all payments to the seller. However, it also affords you great profit potential. You can collect money up front as option consideration, you receive the positive cash flow and you can make additional money at the end if the option is exercised. For those of you not familiar with the term positive cash flow, this is the difference between what the tenant/buyer pays you and what you pay to the original seller. This is also known as a sandwich lease purchase.

Another unique strategy is called the co-operative assignment. Here, you contract for a property and assign or sell that contract to a tenant/buyer, with the approval of the seller. In other words, the owner/seller has final approval over who goes into the home.

Another way of doing business is the straight assignment. Here, you contract for a property and assign or sell that contract to a tenant/buyer. This method does not require a seller's approval.

You can also take a pure option on a property which allows you to purchase the home at a future date with set terms. This option can then be sold to another investor.

As you can see, there are a number of unique strategies that can be employed in this business. We have touched on just some of them to give you an idea of the type of income Lease Purchasing can generate for you.

After you've gained experience in the business, you can start consulting with sellers and tenant/buyers. There are many reasons you may want to consult with a seller rather than get directly involved in the deal. The property may be to distant to work conveniently, there may not be enough money in it for you to receive what you need, or the seller may prefer to do it him or herself.

When you consult with a seller, you are providing the proper contract, a marketing plan and supporting material. We also provide a period of time for follow-up questions.

You can also consult with tenant/buyers. You may want to do this with those individuals who have limited funds available to get into a rent to own home. There are also occasions where people just prefer to do their own house hunting.

We've really just touched on the various ways to generate income with a Lease Purchase business. Lease Purchasing allows you to develop multiple income streams. By utilizing all of the income generating strategies available to you, you can build a very solid financial base for yourself.

We've covered many of the pluses of Lease Purchasing as a business, but we'd be less than honest not to point out some of the minuses.

If you're the type of individual who has poor attention to detail, this may not be for you. You need to be able to keep good records of whom you spoke to and do business with.

Also, if you're an impatient type and don't like to do "hand holding", again this may not be for you. There are many deals where you will need to be able to walk the participants through and provide constant reinforcement to them.

Although the risk level in this business is minimal, there are some risks involved. You may contract for a property and not move it for example. If you're adverse to any risk, re-think Lease Purchasing as a business for you.

In our opinion, Lease Purchasing provides a truly win-win scenario for all parties. You get to help a seller who has a problem, you provide a nice home in a nice area for the tenant/buyer that they can get into today and buy tomorrow and finally, you are generating a wonderful income for yourself. This is a business that can be operated anywhere there are free property rights.

Believe us when we say that Lease Purchasing is the best business we will ever own. It's that good!

Copyright 2000, DeFiore Enterprises

Interested in having your own successful, home based creative real estate investing business? Chuck and Sue have been helping folks start successful home based businesses for over 19 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com for the latest FREE tips and tricks, educational products and coaching in creative real estate investing and home based businesses. No time to visit the site? Subscribe to our "how to" Home Business Solutions Digest, it's like having your own personal coach: mailto:subscribeHBS@homebusinesssolutions.com


MORE RESOURCES:

Huffington Post Canada

Cooling Real Estate Dents Canadian Consumer Confidence
Bloomberg
Canadians became less confident this month about housing and prospects for the economy amid the troubles of a Toronto mortgage lender, according to telephone polling. The Bloomberg Nanos Canadian Confidence Index fell to 58.5 in the week ending ...
Canadians' Faith In Real Estate Fizzles As Toronto Sales PlungeHuffington Post Canada

all 11 news articles »


Bloomberg

Three Chinese Real Estate Tycoons Gain $5.4 Billion In a Day
Bloomberg
A rally for Chinese property stocks added a combined $5.4 billion to the fortunes of three tycoons alone on Monday. None fared better than Hui Ka Yan, the richest of them all, whose China Evergrande Group has built him a net worth of nearly $21 billion.

and more »


Los Angeles Times

John Burns, real estate guru, joined the industry by 'accident'
Los Angeles Times
John Burns is chief executive of John Burns Real Estate Consulting, an Irvine company that provides research and business advice to home builders across the country. The firm has hundreds of clients nationwide. Burns describes his job as running around ...



Chicago Sun-Times

President Barack Obama library's real estate buzz
Chicago Sun-Times
Real estate brokers say the buzz about the library has grown exponentially since it was announced Jackson Park would host it. Sale prices have ticked up too, they say, from about $226,000 in July 2016 to $255,000 this month. Hasani Steele, whose Steele ...



Slate Magazine

How Does a Baltimore Real Estate Concierge Work?
Slate Magazine
In this episode of Working, which you can listen to via the player above, we spoke to Damon Walker, who describes himself as a “concierge” to real estate investors. As he puts it, “Whatever needs an investor has, I try to fit the bill,” whether they're ...



Los Angeles Times

Is the real estate market about to crash? No way, says this CEO — and here's why
Los Angeles Times
With corporate headquarters on Bunker Hill downtown, CBRE Group Inc. — the world's largest real estate services firm — is one of only a handful of Fortune 500 firms based in Los Angeles. And it's riding high after a long real estate boom. The company ...



Real estate: A national system that actually works
Herald-Mail Media
So I've become convinced that real-estate agents should be in charge of everything. Imagine if you called Microsoft and instead of some opaque, condescending techie, you got a Realtor: “OK, I want you to restart your laptop and then hit alt shift — oh ...

and more »


CNNMoney

Who's having a good 2017? One Chinese tycoon is $10B richer
CNNMoney
The net worth of Hui Ka Yan, chairman of real estate developer China Evergrande, has jumped roughly $10 billion since the start of the year to around $21.3 billion, according to a CNNMoney calculation based on data from Hurun Report, a Shanghai-based ...

and more »


Miami Herald

Israel-Miami real estate connection stronger than ever
Miami Herald
And as a veteran real estate broker, I have witnessed and experienced Israeli interest in Miami real estate — which has always been strong and consistent — increase dramatically in recent years. In this column, I will attempt to explain the reasons ...



NBC Bay Area

Bay Area Homeowners, Real Estate Agents React to Lawsuit Over Zillow Estimates
NBC Bay Area
The Zillow Inc. logo is displayed on an Apple Inc. iPhone 5s in front of the Trulia Inc. website in this arranged photograph in Washington, D.C., U.S., on Friday, July 25, 2014. Zillow, the largest U.S. real estate website, is seeking to buy No. 2 ...


Google News

home | site map | Blog |
Portland Oregon Real Estate Listings | real estate investing | real estate in greece | for sale by owner in atlanta | House for sale: Louisville KY
Exchange Links Here | Links page |
© 2006