Who holds the mortgage on a lesson option!?
Hello my fellow BP members...
I was approached by a representative of an investor group pushing the idea of lease options. The wording of their spill made it sound as if you can make more money on a lease options than with flips and rentals. They also mentioned that this approach was one with less risk and no need to sign up for a loan/mortgage. If I don’t hold the mortgage, who does? I’m a little confused.
Help!
—Jayde
Joe Villeneuve
#4 All Forums Contributor
Pro Member
#4 All Forums Contributor
- Plymouth, MI
They're 100% correct. The seller holds the mortgage until the option agreement is executed. The Lease/option is actually 2 separate agreements...the lease and the option. The option agreement isn't a contract to buy, it's a contract that gives the holder the right to buy. Until that occurs, the seller holds the title.