Updated about 18 years ago on . Most recent reply
The power of a $1.00 investment ($7,000 profit in an LP)
[b]The power of a $1.00 investment ($7,000 profit)
By: Diana Fontanez – Lease Purchase Specialist and Consultant[/b]
What can you do with a $1.00? Buy a Snicker Bar™? Maybe. But I am smarter than that because with $1.00 I could do wonders with the unique Lease Purchase Alternative.
Allow me to explain how a $1.00 created $7,000 in just 6 hours.
I received a call from one of my powerful Lease Purchase Seller Ads. A motivated seller wanted to lease purchase his home for a 2 year term, $1,300 monthly rent, and a $195k purchase price. It sounded good so I went to work to check the area. It was a commercial area with lots of developments going on. I found out a Home Depot™ was going to be built soon too. The rents in the area were going for $2k a month and based on comps the property was worth around $225k. My light bulb went on!
I had 2 alternatives here:
Rent the property for 2 years, at $1,300 with a purchase price of $195k and sublet the property for 1 year, purchase price of $225k and a $2,000 monthly rent. This will allow me to create a positive cash flow, get non refundable option consideration and a backend profit or…
Use the magic of $1.00 to create an assignment and collect a fee.
The home was free and clear and I asked him if I offered all cash what price will he give me. He said $175k ($50k discount). I told him I will work with him on a pure option deal. I will look for a buyer and flip the contract for an assignment fee.
I contacted my pips from my database and the first investor recently purchased a gas station so he said no. The second one liked the idea because he was looking for something like that and the third one just invested in a building. Went over the property with the second investor and he loved it. I used my assignment contract and he gave me a check for $7,000. I went home singing my Madonna’s song and gleaming with happiness!
The power of a dollar! I think I’ll buy a Snicker Bar™ now!
To your success,
Diana Fontanez
Lease Purchase Specialist and Consultant