Thinking about doing a Lease-Options deal

 This why I don't do it. These type deals never work out....

I have met a lot of investors who swear by using this strategy to get deals done, I personally don't like this strategy. Because in my personal experience, these deals never work out the way that you envisioned them.

If you are unaware about what a lease option is:

A lease-option is an agreement between an owner of a property and a tenant. A tenant signs an agreement with a property owner to rent a property from the owner  for "x" amount of years ( typically 2-5 years) and once "x" amount of years has passed the tenant becomes an owner occupant by purchasing the home from the owner.At the expiration of the deal, the tenant has the option to buy the property from the owner for a previously negotiated price.

The way it works:

First, the tenant puts down something similar to a deposit which is called an "option fee." This option fee is a non refundable fee which acts as a down payment for when the tenant evolves from being a tenant into becoming an owner occupant. Next the landlord and tenant sign an contract that says that the tenant will buy the property after "x" amount of years. Typically the tenant has to  pay a rent premium for this type of agreement with part of the rent going towards the purchase of the home.

Lease-Option In

A lease option in occurs when you negotiate to rent a property from a seller and sublet the property to another tenant for a price higher than  what you are paying for rent . You can collect the margins and at the expiration of the contract you purchase the property.

Pros for investor:

This is a creative way to build some capital to invest into more properties.

Cons for an investor:

The major pitfall of using this type of strategy is that you d