Got a Seller Interested in Lease Option

6 Replies

I think I have a local seller interested in me putting together a lease option /rent to own deal  where I get fee out of 1st option consideration for putting the deal together [wholesale lease option]

He wants to walk away with 200K .I told him I coud probably get him 210 to 215K at the end of a 24 month lease period.Here what stumped me 

He says " Yeah thats fine if the market appreciates ,the buyer will love it,,but what if theres another crash ? What if it drops to a value of 180K  even 150K  even if my buyer gets financing ,,I'm out 50K .I could have got my 200K if i was patient ,found a good agent and listed it for 6 to 8 months.My tenat buyer is making out like a bandit

How do I address that kind of that objection from a seller in a logical manner that will keep him talking to me and wont kill the deal.

2nd issue

Im getting a lot of "pushback" from some sellers who say ,,,,"Yeah you sound like a nice guy but my sister did a lease option 2 years ago and let a tenant buyer in there and they trashed the place and never bought it after all,,,so Im not crazy about lease option,,,,,how do I make lemomnade out of a bucket of lemons like that?

Hey guys I know Im not going to get every poor soul I talk to ready to jump on a lease option ,,I just want to respond in the most logical intelligent manner when I get these 2 common objections,,,,

Any help appreciated

Dave Doyle

Los Angeles

Just bring a cash buyer to the table and cash him out, and you make the wholesale fee.

Joe Gore

As far as the first issue, the buyer will be under contract for a set purchase price so if the property depreciates the seller still should get his. On the second issue, I haven't run across a situation where the option tenant trashed the property after putting up a substantial option fee. They would usually take care of it, but in that case I would do as @Joe Gore stated

Thank you Thomas and Joe


@David Doyle   Hey a shout out to a fellow So Cali investor.

Don't you just hate people who find a million ways that something won't work? Your seller apparently can wait for his $200k, but seriously why would he want to? I've got to agree with @Joe Gore why mess with SLO? I suspect you're using this technique to wholesale retail property to folks with crappy credit.

It's not a bad idea if you can make it work. It sounds like you're running into the level of skepticism that I'd expect. Let's see, hmm, how to overcome these objections.

First, I didn't notice anything about how you structure the SLO. How much of a option consideration are you getting for your seller?

Next, how carefully are you screening your buyers? If they are really just bad tenants, don't sell to them. No good can come of that. On the other hand, if your buyers are serious about buying a home and want to have that "pride of ownership", you may have a winner.

If your sellers are depending on the tenant exercising their option, you may want to educate them. Very often buyer tenants let their options expire or move out. That's just the way of the world. The cool part is your seller can pocket the option fee and sell the house again whilst collecting above market rents and leaving operating expenses to the buyer. It takes special kind of seller for this sort of deal.

Are you providing your seller with the over market rental income and making sure that buyer pays operating expenses for the option period? Without that there is a lot less incentive for the seller to play ball. Remember the you're looking for a higher risk buyer, so make sure it's worth it to your seller.

Please tell us a bit more about how you're structuring the deals.

All the best.



Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here