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Beginning With Lease Options... | By: Jim Aydelotte

Beginning with Lease Options…

 It's almost a distant memory, because I have been an active real estate investor for over 10 years now, and in those early weeks and months - it was such a confusing thing for me to get my mind around the idea that I could sign a couple of pieces of paper, and own or control a property with little or no money of my own, by not going to a bank to get a loan, or using my own credit.

 Now, as I teach, coach, and counsel new investors around the country considering a future in the real estate investment world, some of those same memories come back to me, because I see it in them.

 At the time I was first introduced to this business concept - the very first thing I thought was 'It's too good to be true…"

 Then, after hearing other people's testimonials, and talking with some that were involved in lease options, my second thought was "If half of what they're saying is true - this is still too good to be true."

 In fact, if half of what I was hearing was too good to be true, then I owed it to myself to dig into this investment strategy more and try to understand it, not just regarding the legitimacy of this business, but is this something that I can do?

 You see, growing up, I was surrounded by people in my family who were well versed in the building trades. I worked for my uncle at 15 years old as a tin knocker and general grunt in his HVAC business. My father, who was a deputy sheriff, did side jobs to make extra money, and I was often with him and helped him in many of those projects.

 Plus, being in the discipline of electrical, mechanical, and magnetics engineering, this allowed me to have a greater deal of experience in construction - as I could build a house from the ground up - but knew zilch about real estate in terms of investing, taking control of properties, nothing! That was ALL new to me.

 So as I began this endeavor - I had to learn a lot, and that took me time, because there was no one around where I lived who was doing it, teaching it, coaching others, or hosting meetings with other investors who were doing it. (In fact, after my initial introduction to this business, I located and attended an REI group about 45 minutes from my house, but it was filled with burned out landlords, and no one was willing to share anything with anyone else, except for you to buy their dump at full asking price).

 What Do I Do?

 Because of the lack of support around me - I did the only thing I thought I could do - I began to study. I listened to tapes & CD's, read books, and just spent as much time as I could be trying to figure the real estate investment business out, on my own.

 By this time, I had attended a rather expensive boot camp, and came away with one valuable piece of information - it was that this does work, and that I can do it!

 Not only that, but I would do whatever it takes to become successful in this endeavor - because I was sick and tired of being sick and tired! You see - I would climb the corporate ladder, only to find out that it was up against the wrong wall, time and time again. Failure was NOT an option for me!

 The stress of that, combined with the desire to be financially free from a J.O.B. - and to buy back my time, drove me into learning about this business strategy.

I was not opposed to trying new things, after all - I used to be in Amway…but this was different!

 For the first time in my life, I could see a light at the end of the tunnel, and it wasn't a train coming the other way!

 But there was a nagging question that kept coming up, over and over and over again…. WHAT EXACTLY MUST I DO FIRST?

 That's what I want to spend the next few minutes talking with you about. If you're reading this - you are already hungry for change in your life, and this is a business that can take you there faster than anything else you can imagine!

 First Things First…

 Of course - one of the things I realized that I must do, is to begin to understand the mechanics behind real estate transactions….and just as important as that - I needed to understand my local real estate market. My market is different than your market, and your market is different than mine, and in order to implement various aspects of lease options, this knowledge is a fundamental necessity.

 Of course, I had no idea how to talk to sellers, market and screen tenant/buyers, work with title companies and real-estate agents, etc., but I knew that there were people who learned that before me, and I could learn that as well.

 Based on some of the teachings and materials that I had absorbed, read, and listened to, I heard terms like 'subject-to', 'sandwich lease-option', 'short-sale', 'quit-claim deed', ‘wholesaling’, and many other terms I knew nothing about.

 In fact, my problem, like anybody who is beginning a real-estate investment business who is not familiar with real-estate, was that I was seeking and grasping for direction in a sea of investment strategies.

 This is one of the reasons why I did nothing with my beginning education in real-estate (for over 3 years I might add), and went back home stunned by the myriad of ways to invest, let alone, make offers that made sense based on a seller's particular situation.

 So, the bigger issue for me was not overcoming some fear of failure, fear of rejection, or fear of talking to people….no, mine was not knowing where to begin! (I kind of felt like a mosquito in a nudist colony - I knew what I wanted to do - I just didn't know where to start).

 As an engineer, I am usually highly analytical, causing a syndrome known as 'paralysis of analysis'…. also known to medical professionals as 'detail-itis'.

 Too many solutions, and not knowing enough about any of them, caused me to think that it was necessary for my business to be the total solution for all sellers and all situations.

 If you are reading this right now - please do not miss this extremely critical, and very possibly, life saving insight that you need right now - forget about everything else - and focus only on lease options.

 Why Lease Options?

 Lease options provide the ideal solution for a number of reasons…

First - it requires little or no money to get started. That's huge for many people, because if you were like me - I lived paycheck-to-paycheck. I did not have the funds needed to invest in properties.

 Second - it allows you to take control of a property without taking title to it, thus drastically reducing the risk involved normally associated with investing tens of thousands of dollars, or more.

 Third - it is the only strategy that I know of that can put several thousand dollars into your bank account in as little as 30 days!

 Here's an example of a typical sandwich lease option deal....

 A seller has a house worth $125,000, and owes $100,000 on a first mortgage they would like to sell. Their monthly principle, interest, taxes, insurance (PITI) payment is $930/mo.

 The seller agrees to lease the house to you for $105,000 on a lease option contract, cover their monthly payment of $930/mo, and you agree to give them $1,000 down.

 You lease the house to a tenant/buyer for $129,900, receive 5% or $6,500 down, and $1,150/mo.      Your seller gets $1,000 from the 5% down paid to you, leaving a 'front end' balance of $5,500          with a monthly spread of $220/mo.

 Let’s say that your tenant/buyer gets qualified for a loan in 18 months, you will have made $5,500 on the          'front end', $220/mo x 18 months = $3,960, PLUS the 'back end' difference between your balance to the seller of $104,000 (you paid $1,000 down) and the balance the tenant/buyer owes of $19,400 ($129,900 - $6,500 = $123,400, less the $104,000 you owe the seller).

 Your total profit would be $5,500 + $3,960 + $19,400 = $28,860 – all for doing nothing but signing two sets contracts on a property you neither owned, took title to, nor had to get a loan or use your credit for.

 With these positive aspects, and all of the potential for financial reward, lease options are the absolute best strategy for making a significant amount of income as quickly as possible.

 What Next?

 Because of the tremendous opportunities that are available, the very best thing that you can do next is eliminate all of the distracting forces and varying aspects to real estate investing, and focus on just one thing, lease options.

 In order to do that - you must have the information necessary for you to take in, digest, and get started.

 I will help you do that, and I look forward seeing you achieve success…

 All the Best!

 Jim Aydelotte

The Lease Option Coach

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