All Forum Posts by: Shiloh Lundahl

@James Wise It seems like there may be some confirmation bias going on. I thought you were wiser than that.  

So you are stating there there is no situation in which a lease option would be a good option? 

There have been a lot of negative opinions about lease options on BiggerPockets by people that have done a lot of different types of real estate. That's confusing to me since the lease option strategy has worked out well for us and several of our tenants. It got me thinking about why somebody would choose to do a lease option. I can come up with 10 reasons why somebody would choose to do a lease option. Here they are in no particular order. Please feel free To ask any questions about these scenarios.

1. Wanting to buy now but you need to sell your house first
2. Wanting to buy now but you need to save up for a down payment
3. Willing to do work to increase the value of the house but you can still buy it for the contracted price.
4. You think the value will go up and you want to control the house with only a a little bit money.
5. Your credit is too low to qualify for a loan right now.
6. Your credit is low and you can qualify for a loan right now but you want to improve your credit score first in order to get a better interest rate.
7. You have good credit but the interest rates are still too high right now and you want to wait until the rates come down before you get a long term mortgage.
8. You just started your own company and you don’t have 2 years of tax returns so you are not very bankable right now. 
9. You want to pay off the house with big installments and you don’t want to get a loan.
10. You are not sure you want to buy but you do want the option to buy the house in case you decide that you want the house.

Hey Robin, I own three properties in Costa Rica. The properties that I own, our vacation rentals that can host large groups. Which Types of properties are you interested in?

@James Wise What can I do or say to help you see that this is a perfectly legitimate way of investing in real estate and that it can be beneficial to both the buyer and the seller?

@Patrick Roberts some states don't like lease options and so the owners have a harder time in court. In Arizona and several other states they do just fine as long as they are done correctly. We have separate lease and option contracts. They both spell out all of the specifics of the agreements. We also can connect our tenant buyers with lenders to help them get ready to buy the properties. Out of about more than 100 that we have done over 7 years, we have had 2 evictions I believe. We didn't have any issues with it in court. One was in Arizona and the other was in North Carolina. 

@James Wise a fool makes judgement without enough context. 

Over the past few weeks I have posted about the lease option strategy that I use and some people have been critical of it (which is fine) especially when compared to turnkey investments. I am open to criticism. Here is my last lease option property that I purchased and an explanation of the deal. 

I advertised it on Facebook Marketplace with the following paragraph: 

Hey everybody. I have an opportunity thet might fit someone. I bought a house that is in bad shape. It needs a lot of work done to it. It’s a 4 bedroom, 2 bathroom manufacture home. It's going to need new floors, new paint, some new doors and some drywall and doorframe repair among other things. If you are handy, and want to take on this project as a rent to own home, then I’ll sell it to you for $165,000 and as you fix it up and if it appraises for higher than that, then you can still buy it for $165,000 even if it appraises for $20,000 or $30,000 more than that. The rent to own program goes for three years during which time you can work on getting your credit where it needs to be in order to buy the house. There is a $2900 option fee to get into the rent to own program and the rent for the house is $1345 a month.Let me know if you are interested.

I got several inquiries and within a week I already had a tenant buyer put down money for the option fee.  They will move in in about 2 weeks. He used to own his own contracting business.  

Purchase price 125k

Closing costs 7k with hard money lender

Cleaning $300

Closing costs 5k with long term loan

rent $1345

My PITI 1095

Monthly Cash Flow $250

Second position lender to cash me out of my 18k left into the deal will get $180 of the cash flow.

Zero left into the deal, $70 a month in cash flow

Sell for $165,000 in 1-3 years

Estimated profit over a 3 year period of time $30,000 - $35,000

Total amount of work 4 hours including writing this post. 

Hey@Steve K. i'm sure we've had this conversation before on BIggerPockets, but remind me, where is your property in Costa Rica? We have three properties out there. One just south of Tamarindo, one near La Fortuna, and one between San Ramon and Esparza up in the mountains.

Hey Pedro, if you want to build equity quicker, then you'll wanna buy properties well in the market value that likely will need to have some work done to them to get them fixed up. I would encourage you to Google "wholesalers in ___________" and then put whatever city you are interested in investing. Connect with other investors in the area that have between 5 and 10 units and see if they might be able to connect you with some wholesalers in the area. You'll also need to find some handyman or contractors that can help you get the work done. You may want to buy some properties that don't need a whole lot of work done. Possibly just some carpet and paint type of properties at the beginning until you get to know more people out there. Doing this will likely help you build equity quick quicker.

Hey Everybody, 

I am hosting an investor Mastermind Retreat for high level investors who have done 50 or more deals or that have a portfolio of 50 properties or more and have built a net worth of 1 million or more through real estate investing.  This retreat will be held out of my properties in Costa Rica from April 27, 2025 to May 3, 2025.  

So if you are a high level investor such as a real estate coach that provides coaching or looked up to at as a real estate mentor, or maybe you just kill it as a real estate investor, and you want to network with other seasoned and experienced investors then this would be a great event for you.  

If you are awesome at short term rentals and you want to see how to run a vacation rentals in a foreign country then you should come join us.  If you are a flipper and you want to get feedback to improve your systems then you should come. If you want to learn more about lease options and see if it would be a good tool to add to your skill set then you should come.  If you are a money lender and you want to improve your systems in lending, then you should come. If you just want to build awesome relationships with experienced investors, then you should come join us. 

Here is a video to give you a sample of the retreat. 

For more details about the retreat, go to https://reiretreats.com/mastermind-retreats/ or let me know if you have any questions.