Real Estate Articles

Why Lease Options? | By: Jim Aydelotte

Why Lease Options?
The Lease Option Coach
Jim Aydelotte – © Copywrite 2017

 

Sometimes I would love to go back in time, just to get a chance to do a few things differently than what I actually did…or didn’t do - of course, hind sight is 20/20 right?

 The reason for the question “Why Lease Options”, is one that I try to stress to everyone who wants to start making money in real estate. Please understand that this is not a suggestion based on selfish motives, it is based purely on experience.

 Here’s the hard truth – most everyone who looks to start investing in real estate doesn’t know where to begin, and does not typically have the funds or resources to start ‘investing’, and many do not know what to do in order to get started (other than what one of their friends did who bought a property, fixed it up, and rented it).

 Now, don’t get me wrong, I’m not knocking anybody that is doing that, or the many who have done it and have been successful in that endeavor. But the majority of the people I talk to and get to know, are not in a position with their time or with their funds, to accomplish that.

 And the reason why I believe, and am convicted of the fact, that lease option strategies are the absolute best strategies in all of real estate investing for every beginning and seasoned investor to get involved with, is because it takes no capital, very little time, and minimal training, to start getting paid quickly in real estate investing.

If you were to purchase an average rental property, in a typical neighborhood (leaving out the sky high prices and rents in major metropolitan areas, let’s say for example a 3 bed, 1.5 bath home rents for $1,200, with a cost of $80,000 including holding costs, and the time it takes for you to get it in order until you can rent it out, again, just for example only.

Assuming you did not use a private lender (most beginning real estate students do not have those by the way) the monthly payment with a bank using your own credit on a typical commercial loan will cost you about $575/month, not counting taxes and insurance. Let’s add $200/month for that, requiring a total payout of $775/month.

Now, that payment has to begin whether you have a tenant lined up or not! But for sake of our example, let’s just say that everything goes as perfectly as possible, and you have a tenant lined up right away. What’s your cash flow in this example?

Rent at $1,200/mo - $800/mo in expenses = $400/month profit (again, nothing breaks or requires repairs at all in this example).

That is an annual profit of $4,800 the first 12 months you have a tenant.

Ok, you get the picture - $4,800 in the first 12 months in profit in our example.

Let me give you another example. Let’s learn how to locate, talk to, and put a property under contract to control a property.

Now, finding a seller who is motivated is one thing, but finding a seller who is motivated and getting them full retail price for their property is another! This is the strategy we employ called a ‘Cooperative Lease Option’.

 Putting a property under contract for full asking price, with no additional fees to the seller, while placing a tenant/buyer in the property will yield a typical payday of $5,000-$10,000 in a very short period of time.

 I have a student who had no background in sales, marketing, or real-estate for that matter, and when he followed the steps I gave him, was paid $6,000 from the day he found and talked to the seller, and 20 days later when the tenant/buyer was placed in the property – and this was starting from scratch with no experience – 20 days for a $6k payday!

 But let’s say you need more time to learn these strategies, and to find a property with a seller who is willing to sell their property on contract…and it took you 90 days.

 That’s still more profit, in a quarter of the time as the previous example, on a home you didn’t take title to, or use any money or credit to purchase it, and did not have to take time to do any rehab on it.

 This is a strategy that anyone can employ, and the profits can be so much better, with such little risk, and far less time than the type of real estate deal that most people are familiar with.

 Now you can see exactly why I believe lease options are the absolute best model that anyone can utilize, especially those who do not have the resources necessary to do a ‘traditional’ type of real estate model.

 I look forward to helping you get started and succeed!

 All the Best!
Jim Aydelotte

The Lease Option Coach

Contact Us

Heartland REIA
  • (314) 485-9676
  • 1826 Port Ln
  • Worden, IL 62097

An Independent REIA Powered by:

Newsletter

Stay updated with Heartland REIA


Privacy and Security Policies

Your email will never be shared or sold to other members, vendors or any other third party without your consent.
Privacy Policy   -   Security Policy

Disclaimer

www.LifeonaireReiaStl.com  (Heartland REIA) does not give legal, tax, economic, or investment advice. Heartland REIA disclaims all liability for the action or inaction taken or not taken as a result of communications from or to its members, officers, directors, employees and contractors. Each person should consult their own counsel, accountant and other advisors as to legal, tax, economic, investment, and related matters concerning Real Estate and other investments.   

Copyright 2019 © Heartland REIA  All rights reserved.

This REIA Website is powered by: Real Estate Promo.