Why would anyone accept a lease option, rent to own deal? Why would you, as a seller/investor look to find rent to own tenants? How can you use this technique to LOCK IN profits that are much greater than would be found in a straight sale?

Basically, the advantages depend on which of two end results occur: either the rent to own tenant completes on the property, or they don’t. You make money either way!

There are MANY people who have less than sterling credit, might not have a long time on the job, or not have a ton of money for down payment, closing, etc. Many people WANT to buy a house - and they expect their credit, job conditions, down payment amount to improve over time. They LOVE the idea of being able to buy NOW, on a rent to own basis. You can help these people out, and be paid handsomely for your efforts.

I’ll assume a $100,000 property, and you would offer $5-10,000 down, but be willing to take even less, even possibly take monthly payments for the down payment. Because of providing “easy credit”, you can increase the price by an amount of between 5 and 20%, depending on how long the rent to own period is, your local market, individual’s credit situation, etc.

Lets say you buy a property for $90,000 that is worth $100,000 in the open market, and is advertised at $110,000, with 5-10,000 down, and monthly payments of $750 over a 3 year period. Note that ALL of these numbers are variable - whatever works for YOU and your rent to own customer. You have LOCKED IN a profit of $20,000 in 3 years time, less mortgage pay down, with $750 a month to make any mortgage payments in the meantime. Use a mortgage table (it depends on the interest rate charged) but it wouldn’t be any more than $100 a month that the mortgage is reduced by. Total profit would be $20,000 less $3600 mortgage paid down, with $750 a month to offset any carrying costs, mortgage, etc - not a bad deal!

Should the tenant be unable to complete on the purchase at the end of the term, you can agree to renew the agreement for another period, with a higher purchase price.

That sounds like a very good set up for the vendor, but what if the rent to own tenant bails out on the agreement? The majority of rent to own agreements fail to complete, so this is a fairly likely occurence, but can be reduced by picking your tenants well.

In this case, you are left with the down payment of $5-10,000, payments that covered the mortgage and carrying costs for however long the tenant stayed for, and they probably took MUCH better care of the property than a normal tenant, as it was THEIR property!

You can simply advertise for another rent to own tenant, and collect another deposit, continue collecting rental amounts, and continue carrying the property at no cost to you.

You can carry a portfolio of properties with this method - there are virtually no maintenance requirements - its THEIR property, so THEY have to fix it, mow it, weed it, paint it, etc - and you can carry as many properties as you can get financing for, or even “buy” under a rent to own, lease option type of agreement and then rent out to other tenants at a higher purchase price!

The options are endless - and it doesn’t take a lot of ads to find a TON of willing rent to own tenants! You can set up the deals however you wish, and you can “give them a good deal” by reducing the deposit requirements, or extending the term - you win either way!

Andrew Larder Creative Real Estate

To receive free info on no or low money down real estate investing, send a blank email to: monopolyinvestments@getresponse.com

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There is no bad real estate market, only people with problems who happen to own real estate!

To build your own real estate investment company, to become a real estate entrepreneur, you need a system that combines the tools and knowledge to provide solutions to these people’s problems. These are human problems, not real estate problems. People die, they lose their jobs, they get into financial troubles, they get divorced, etc.

These “Trigger” events, combined with the lack of cash savings and little equity most homeowners have in their homes today can lead to extreme financial, emotional and even physical distress; as homeowners struggle to keep up their payments and/or are frustrated by their inability to sell their properties.

Think about it. If the payments on your house were killing you because you were stuck making two mortgage payments; the sale of your old house fell through after you closed on the new one.

Wouldn’t you be lying awake at night, worried sick about running out of money and having to face the embarrassment of foreclosure?

What if you did not have much equity and the costs of a sale, which could be 20% or more of the value of the property, would eat up a good chunk of your remaining savings? Wouldn’t you be praying for someone to come along and solve your problem?

You might even get so desperate that you would actually Give the property away to anyone who would take it, just to be rid of all the stress!

We have just taken a good look at one side of the profit equation, the seller’s side. There is also a buyer’s side.

There exists a Shadow or Phantom market of buyers for real estate. Most are self employed people or small business owners. Others have had recent bankruptcies or foreclosures.

Still others are foreign nationals. They can afford to buy real estate but for various reasons cannot or do not want to qualify for a bank mortgage.

You can solve their problem by selling them the homes you pick up from the desperate homeowners! You sell them with seller financing. The Phantoms will reward your “kindness” by paying you premium prices for your properties!

You can get started as a part time investor with a basic real estate investing system:

Tags: bank, entrepreneur, foreclosure, home, investments, money, mortgage, own business, Real Estatebank, entrepreneur, foreclosure, home, investments, money, mortgage, own business, Real Estate

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Are you on a small budget, but you want to purchase a home? If you are on a small budget, and you want to get a home, to start living as a family in an area that you love, look towards homes that have recently been foreclosed. A foreclosure is one that someone else has lost. The homeowner may not have been able to keep up on their mortgage payments, and the bank has taken over the property. Banks and financial companies don’t like to hold onto these properties for long, because of the interest, the payments and the money that is being lost over all.

To find a home that has been through foreclosure you can begin your search online or offline. Many links to foreclosure companies and banks are going to offer listings of where foreclosure homes have been located. A foreclosure company is going to offer great rates, and will offer great prices on homes that they want to sell.

While nothing can be done for those who have been through the foreclosure process, and for those who have lost their homes, you can take advantage of the situation. You can purchase home, at a reasonable cost, and create a home for your family.

To purchase a home that has been through foreclosure, the process is going to be very similar to that of any other mortgage. You will have to apply for a mortgage, you will have to pass the background check, and you will be subject to interest costs, and closing costs of the mortgage. A foreclosure home may require some additional legal background work, so you will need to hire an attorney to look out for your best interests.

A foreclosure home is one that has been abandoned because the previous owners could no longer pay for the home. You will find that many types, sizes, and styles of homes are often included on the foreclosure listings by banks. You will find one bedroom homes, two bedrooms homes, rental units, retail and commercial buildings and you will find luxury homes, vacation homes, even mansions included on foreclosure listings.

The home of your dreams could be very affordable if you take the time to look at the foreclosure listings. The foreclosure listings will give you an idea of the city and the state where the home is located, and from there you are often required to contact the bank, the financial company or perhaps a real estate agent as listed, to find out more about the property. The only limitations you will have in purchasing foreclosure homes is going to be your credit limit and where you want to live. Homes from across the nation, from Vegas, California, to Virginia, Florida and in Washington are available for purchase.

Copyright 2006 - Ivar Rudi. For more information and resources about this subject check out: http://www.stop-foreclosure-guide.biz/

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