Is Wholesaling Lease options worth it?

14 Replies

Hey everyone,

I recently listened to Joe McCall speak about Wholesaling Lease Options at a local REI meetup here in St. Louis. The whole process seems very interesting to me. The process seems pretty straight forward and simple. I can see some of the negatives that weren't addressed and wanted to see what peoples experience is doing this.

Negatives: 

-Finding tenants

-Having a tenant that destroys the house(would I be liable?)

These are the 2 main concerns I have. Joe does sell his course for $1500 or so that walks you through everything. I want to be as diverse as possible and this seems like a good way to branch out. Let me know your thoughts!

@Justin Dossey I just recently did a deal that I intended to wholesale but I ended up buying it and doing a lease option with the end buyer. His intentions are to buy it by Jan 5th, he didn't have the cash up front to purchase at the time so I had him put a chunk of money down up front and make payments with a balloon payment of the remaining balance due in January. I got all of his info like I was landlord. It shouldn't be to hard to find a good tenant I would just make sure you get a big chunk of money up front so they have a reason to take care of the property. I also would trust your gut when you meet the tenant and find out why they are in the situation they are in. Hope this helps.

Originally posted by @Jay Hinrichs :

Excuse my faux slip  Fraught  not Fraud..

I think in some cases (not most by any means) the leasor intends for the leasee to default with an unrealistic sales price or by leasing to someone who has no means buying. Usually lease options just don't work despite the leasor's best efforts. Not always though. And in those cases, I think sadly you were probably more right the first time.

Lease options are awesome... IF you do them right and set them up to win from the beginning. 

1) Only do Lease Options on nice homes in nice areas (median price range) - where people want to own homes.

2) Only put tenant buyers in homes who put at least 3% down and have a realistic chance of getting a mortgage in 6-12 months. Make sure they’re working with a local mortgage broker. 

If you do those two things, you will have good success with your lease options. 

:)

Oh... and also make sure you’re not being stupid and setting the option price ridiculously high. It should be set at today’s fair market value. 

By the way, Justin, I sold my course for A LOT less than $1,500 at that REIA meeting. I sold it for $497. (I give special treatment to fellow StL Cardinal fans.)

@Joe McCall thanks for the info. I only said $1500 since I was not able to purchase it at the REI meetup. I honestly liked the info but I always like to get outside sources info and see if anyone else has any experience with it too.

Still strongly considering the course as well!

Originally posted by @Ian Walsh :

I have had a limited experience of this and it was more hassle than it was worth.  I am sure others have made it work but I found it cumbersome.

What was cumbersome about it? How far did you get in the process?

I mingled in lease option wholesaling and it is a hassle to me. I enjoy just wholesaling houses.

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