Lease to own..$ or ?

**boatboy** · 11-05-2007, 05:37 PM

I have sufficient funds to put down on an investment property but by potentially finding a lease to own property, it looks a bit more lucrative. I figure I could leverage the lease to own property by buying one that is beat up and negotiate the apparaised price at the time of the agreement and with enough sweat equity, fix it up, exercise my option, than sell.

Any thoughts on this way to buy or what to do inmy case since I do have the money?

**Old Dog** · 11-05-2007, 05:58 PM

Lease options are a good way to buy a property without using a lot of your own cash. It is always best to keep as much in reserve as possible and not spend it if at all possible. This makes for a much better ROI (return on investtment).

I would suggest that perhaps you cam find a property that you can purchase subject to the underlying mortgage and have it deeded to you while keeping the existing mortgage in the sellers name. This gives you better control of the property because it is actually transfered to you by a deed. In a lease option you may do all the work and then have the seller refuse to transfer the property to you. Sure you can sue for specific performance but who needs the expense and aggrivation and you could potentiall loose.

**boatboy** · 11-06-2007, 10:26 AM

thanks old dog, are you refering to an assumable loan with a "subject to" clause or am I off the mark?

**Old Dog** · 11-06-2007, 03:26 PM

No I mean even if there is a due on sale clause in the mortgage banks almost never call the note as long as they are being paid. You don't need an assumable loan to take a property subject to the underlying mortgage. In face almost everything I buy is subject to.

**boatboy** · 11-06-2007, 03:35 PM

thanks old dog,

**FastFreeOffer.com** · 11-06-2007, 10:11 PM

I do lease options on pretty houses exclusively and recommend you stick to nice properties if you're going to do lease options. If you're going to do work on the property it would be best to get the deed as Old Dog said.

Your broader question was whether it's a good idea to do some sort of "creative" financing as opposed to buying outright. If you can get the house for approximately the same price and comparable terms then subject to, seller financing, or lease options are almost always preferrable to bank financing.

Reasions:
1. Little or no down payment.
2. No mortgage insurance fees.
3. No loan origination fees.
4. Little or no legal fees.
5. No real estate commissions.
6. Lower and/or deferred taxes.
7. No credit required.
8. Privacy.

For the above reasons and due to the fact that there are more and more sellers willing to provide the financing, I wouldn't buy an investment property any other way!

**boatboy** · 11-07-2007, 07:41 AM

thanks! to get the deed ikeold dog said what would i ask for or how would i do this on a house that has a mortgage? this would be the first time, o any details would be great.

thanks : )!