Thread: Real Estate Investing

That is why the lease With Option contract is so great.
You lock inyour profits for two years.
You buy at a slight 5-10% below the market value (easy to do with FSBOs).
You lock in a rental for 24 months that gives you about an 8% Cash On Cash Yield.
You sell at about 5-7% over the market valaue WHEN YOU BOUGHT THE HOUSE.
Let's look at a $100,000 house.
You buy it at 8% below market and sell at 8% above.
Buy at $92,000 and sell at $108,000.
That's a 17.4% spread ($16,000 over $92,000 purchase price)
or 8.7% per year.
8.7% per year on the sale plus 8% CAsh on Cash per year = 16.7%
Total return.
That 8% Cash on Cash = $613 Net per month for rent. Add another $300 for taxes and insurance and your Gross Rent would be about $900 per month.
What could be simpler?
Nobody is going to get filthy rich but what's wrong with 17% Yielkd per year.
If you are a Realtor and not doing a few Lease With Options, you are leaving money on the table!
It's all explained on the web page
Good luck!

The lease with option contract is usually 24 months and has an Option Price built in when the lease starts. There is no speculation.
The 24 months allows the Tenant to get their stuff toigether and qualify for an FHA mortgage (the most lenient and forgiving).
This is why you can only work the Lease With option deal in very few markets in the country.
You have to be in the lowest foreclosure area and the highest appreciation area.
Here in upstate New York, we work in the Albany County market.
Prices here are down about 5% over the last two years.
BUT the county is made up of 3 cities and about 7 suburbs.
Prices in the cities are down 10% or more (because of crime and the schools) while in the suburbs (where we ONLY work) prices are UP 2-3%.
When you BLEND in all that data, the county is DOWN 5%, But those leaseing with oiption in the suburbs (good school district and low crime) are making money.
Forget the mantra "Loactaion, Location, Location". Start saying "School District", "School District", School District".
There is NO speculation with a Lease With Option.

Originally Posted by ClassifiedsByZip.com

I would think it's a great time to invest if you have money in reserve where you can buy low and wait out this recession.

You never have to buy low and sell high to make money in real estate. You can buy high and sell higher. You can buy at a price and sell at the same price and still make money if you know how to count and use a financial calculator. You can buy at any price if there is income to cover the carrying costs and then sell, hold paper (using a wrap around) and cash out at balloon time.
This is why we use the Lease With Option so much in our area. During the lease we are collecting rent to pay the carrying costs. We can lease the property or do a wrap arond.
Example:
Buy a property for $100,000. Owner give syou a 100% mortgage for 20 years at 6.5%. Payments are $745.57 and balloon is $85,589. Let say you sell FOR THE SAME PRICE ($100,000). But you give the Buyer a 30 yer mortgage at 10% with payments of $877.57. You are making $130 per month profit on just the mortgage. And the balloon is $96,574 or $11,000 more than the $85,589 you owe the original seller.
Buy at one price, sell at the same price 5 years later and still make about $17,000.
This is just an example and the numbers and situations will differ. We just wanted to show you that you do not have to buy low. You just need an EXIT STRATEGY always no matter the economic condition.

I refuse to participate in a recession if you do you will suffer if you don't you can make money from it.