Lease Option (Rent-2-Own)

10 Replies

Great what do you want to know?  Are you looking to buy on option, sell on option, do a sandwich lease option or wholesale options?   Lots of areas to explore.

@Wendy Patton

I was wondering if it was possible if I buy a 100k home and put a down payment 5%-20% and do a rent-2-own

Have the tenet pay for a none refundable down payment. I don’t know if that would be a sandwich lease

@Scott Harper   When you buy on an option you are doing a lease with the right to purchase directly with the owner of the property.  When you sell on an option you are doing a lease with the right to purchase directly with a buyer or what we call a tenant buyer.   They are both the same type of transaction but the paperwork is pro-buyer for one and pro-seller for the other.    And when you talk about buying a home for 100k above and putting down 5-20% I am unclear if you mean YOU putting that down or your tenant buyer paying that much to you down?  Either way the goal when you buy is to put nothing or very little down and when you sell to get as much as you can down.  With that said though most of the buyers who want to buy on an option will only put down 3-5%.  If you get more that is great, but it is pretty rare.  Think also about it from their perspective...if they can't get a mortgage they usually have some credit issues that need time to clean up and they likely don't have a lot of cash.   I hope this helps a little bit for you.  

@Scott Harper a Sandwich lease option is when you lease option from a seller and then lease option the same home to a tenant buyer.   You are in the middle but there are 2 deals:  one with the buyer and one with the seller. 

Finding the seller to any real estate deal is the key.  There are lots of motivated sellers out there - think about the kinds who would want a lease option -  those who don't need their cash out for some time.

I am pretty direct.   Ask something like this  "Would you consider renting me your property before i buy it?" or "Would you consider me paying your mortgage payments for X payments and then buying your home?"     - there are lots of creative ways to ask but it will also depend on their situation and why they need to sell in the first place.  The key is that they don't need to get their cash out immediately.  Typically they have already moved into their new home or they already have a home (inherited, rental, etc) - If they need their cash to buy their next home they are the not seller for a lease option.