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 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:


How to Play the Real-Estate Market
Wall Street Journal
The slowdown is good news for home buyers, of course. And recent weakness in real-estate investments, including home builders, has created opportunities for bargain hunters, some analysts say. But if the Federal Reserve begins raising interest rates ...


For Investors, China Real Estate Remains Big Gamble
China's property market is closely watched by investors. However, China real estate is in a catch-22. When data shows the real estate bubble is deflating, investors note the importance of housing on the Chinese economy and immediately price in a ...

and more »

Campus schools offer real estate program for graduate students
Daily Californian
UC Berkeley's College of Environmental Design, the Haas School of Business and the UC Berkeley School of Law launched a real estate certificate program aimed at training graduate students to face the challenges of modern urban development.

Is this rock bottom for Virginia real estate? Office owners can only hope.
Washington Post
This may be the worst time in the past 25 years to own an office building in Northern Virginia. At least one with space to lease. After mostly uninhibited growth since the early 1980s — a run that produced some of America's wealthiest counties ...

Live music in New Orleans for Monday, Sept. 22, 2014: Real Estate's dream pop
The Times-Picayune -
New Jersey-born, Brooklyn-based indie rock band Real Estate alternates lo-fi, jangly guitar pop with dreamier psychedelic pop, all of it couched in hushed, gauzy vocals. Real Estate released its latest, third ablum, "Atlas," this year. The show is ...

Iowa's Top Workplaces: REMAX Real Estate Concepts
While it's not the largest real estate brokerage in central Iowa, Spearman said REMAX Real Estate Concepts punches above its weight class. He said agents in the Des Moines Area Association of Realtors sell an average of six homes a year, and agents in ...

7 trends about the Reno real estate market
Reno Gazette Journal
Seven years after the Reno-Sparks housing bubble popped, the area's real estate market finds itself in a much different situation. From affordability to new home construction, here are seven things you should know about the Northern Nevada real estate ...

and more »


Quora Question: Who Controls Real Estate on the Moon and Other Planets?
Fireworks streak past in front of the supermoon outside the town of Mosta, celebrating the feast of its patron saint, in central Malta, August 10, 2014. Darrin Zammit Lupi/Reuters. Tweet. AA. Filed Under: Tech & Science, moon, planets, Moon. Quora ...

Lima One Capital sees a niche in lending to real-estate flippers
When banks cut back on real estate lending in the wake of the crash, some discovered opportunity in stepping into the breach. John S. Warren, founder and CEO of Lima One Capital, is among them. His Greenville, S.C.-based finance company focuses on ...

Real estate notebook: Bucs' Glazer takes loss on Palm Beach home sale
Sun Sentinel
The event is designed to help people, particularly young professionals, break into real estate investing. The workshop will be Oct. 25-26 at Lakeside Terrace, 7880 Glades Road in Boca Raton. The cost is $139 in advance and $297 on site. Call 561-391 ...

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