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:

Fox News

Suspect arrested in connection with disappearance of Arkansas real estate agent
Fox News
Authorities have arrested a man wanted in connection with the disappearance of an Arkansas real estate agent, who was last seen Thursday after going to show a home. The Pulaski County Sheriff's Office said Little Rock police arrested 33-year-old Aaron ...
Body of Arkansas Real Estate Agent Beverly Carter FoundABC News
Real Estate Agent Beverly Carter's Body Found in Shallow GraveNBCNews.com
Suspect in custody in real estate agent's disappearanceKHOU
YourErie -KARK
all 412 news articles »


ABC News

Real Estate Agents Fear for Safety After Colleague 'Abducted'
ABC News
Rhoads, who is good friends with Carter and worked with her for nine years, told ABC News that she arranged for a police detective to come and speak to her colleagues at Crye Leike Real Estate Services today to try and calm their fears even though ...



The Bizarre Rise Of Miami's Real Estate Market
CBS Local
Developers had overbuilt, the economy was tanking and more than 20,000 condos sat unsold. Today many of the condos still sit empty, but they are being sold at top dollar. The bizarre ups and downs of downtown real estate market are odd to say the least.

and more »


Madison.com

Morrissey has unique model for online real estate business
Madison.com
For a decade, she bought and sold investment properties, but she had the desire to return to real estate brokering. She planned to start her own brokerage in 2008. Because of the downturn in the economy, she decided to wait until the economy improved.

and more »


New York Times

Charges Filed Against Former Hypo Real Estate Managers
New York Times
FRANKFURT β€” German prosecutors said Monday that they had filed criminal charges against the former chief executive and the former management board of Hypo Real Estate, accusing them of misleading investors in 2008 during what proved to be the ...
German Prosecutors Charge Ex-Hypo Real Estate CEO Georg FunkeWall Street Journal

all 5 news articles »


Fox Business

Real Estate Titan Doug Shorenstein on the SF Market: Everything is Cyclical
Fox Business
The real estate market in San Francisco has never been hotter … but real-estate heavyweight Doug Shorenstein says it won't last forever. β€œIn our business, everything is cyclical,” said Shorenstein in an interview with FBN's Deirdre Bolton. Shorenstein ...

and more »


ETF Trends

New emerging market real estate ETF brings exposure to China, South Africa
Reuters
The Guggenheim Emerging Markets Real Estate ETF, launched by Guggenheim Investments, is the first to track securities specifically tied to real estate in emerging markets, via the AlphaShares Emerging Markets Real Estate Index. The fund and its index ...
Guggenheim Investments to Launch First Emerging Markets Real Estate ETFInsurance News Net
First ETF to track emerging-markets real estate is launchedInvestmentNews
Guggenheim Debuts First EM Real Estate ETFETF Trends
ETF.com
all 10 news articles »


Wichita State real estate forecast calls for 7 percent increase in 2015 home sales
Wichita Business Journal
The Wichita State University Center for Real Estate estimates a 7 percent increase in home sales in 2015, up to 9,810 units. That projection is part of WSU's 2015 Wichita Housing Market Forecast, released Tuesday. If that projection holds true, it ...

and more »


NBCNews.com

Suspect Captured in Arkansas Real Estate Agent Beverly Carter's Kidnapping
NBCNews.com
The man suspected of kidnapping Arkansas real estate agent Beverly Carter was captured Monday, a day after police issued an arrest warrant for him. Arron Lewis, 33, was captured by the Little Rock Police Department and was transferred to the Pulaski ...



Forbes

Where To Invest In Real Estate In 2015
Forbes
The map of global real estate investment has changed. After years in which they privileged capital preservation over returns, investors have regained their taste for adventure and are branching out into alternative markets in search of good opportunities.

and more »

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 | Invalid Request - Error A109
© 2006