Lease Purchase Solutions, Ltd.



11 Profitable 
Lease Purchase Strategies
By: Claude Diamond

1) The Sandwich: Hold the mayo? Not exactly! This is where you rent with one contract and then sublet to your tenant buyer with two new contracts at a higher sales price. You receive option consideration up front which can be 2 1/2% to 10% of the sales price, positive monthly cash flow, cash at the close from the remaining spread and possible renewal option consideration and notes.

2) The Full Price Assignment: You find it, negotiate it, embody it in a good lease purchase contract and then sell it to the lovely couple who want to live in it. You can make money without being adversarial, give the seller the full price they want and provide a positive solution for folks who want to buy, but who lack your specialized knowledge. Your potential profit, the assignment fee can be up to 10% depending on market demand and flexibility. 

Excellent notes and cash flow can be derived from this technique.

3) The Wholesale Lease Purchase Assignment: Similar to #2 above, but with one distinction; you sell the contract at a lower assignment fee to another investor. (Believe me, with all the seminars, bus rides and boot camps out there you will have no problem finding these folks). The profit is smaller, but the turnover is fast especially if you have a database of ready buyer/investors.

4) The Pure Option: This is the way to control a property without the need for a lease. Basically you lock in a price for a potential future purchase. You can hold on to it for appreciation or just sell the contract to another investor. Tip: For certain sellers you will have to incorporate a "first right of refusal" clause in your contract in order to make the deal happen. This passage gives the seller (optionor) a right to call in the option with a pre negotiated time notice. 

Example: You have 30 days to buy the property or give me back my option.

5) The Hybrid: Set up a Lease Purchase as in #1 and pocket the option consideration, sell the contract with your Tenant/Buyer to another investor who wishes to reap the profitable benefits.

6) The Sublet: Perhaps you want to keep the option open to buy a home for you and your family. The solution is to just rent it out and let someone else make the payments. Negotiate a long lease with a favorable monthly rent. Tip: Look for homes where the mortgage is paid down and the principle payments are lower.

7) The "Subject To" Option: How many times have you been faced with a good deal, but you were concerned about being stuck with the monthly payments? Well, just by incorporating the special "subject to" passages in your contract you can have assurance that you won't have to make a payment until you have found an assignee or tenant/buyer who can make the payments so you don't have to.

8) The Cooperative Assignment: This is a strategy that we developed for the reluctant seller who wants to have a say on who you assign or sublet the property to. The advantage of doing this kind of deal is that you have no obligation to make monthly payments to the owner. It is essential that both you and the seller have a clear understanding as to what kind of tenant/buyer/assignee you are looking for so no time is wasted.

9) The Products: (advanced strategy) In many cases the person you are trying to do business with will need more information and something tangible about renting-to-own; why not provide a solution and a profit for yourself? 

We sell the world's best selling cassette tape set on the subject of Lease Purchasing (and many other products) because the market demanded it; why aren't you? This provides a wonderful stream of income. All you have to do is develop your own product or you can save time and several hundred hours of work by using our quality line of products with my NEW Mentor Licensee Program and become an authorized distributor.

10) The Consultation: (advanced strategy) This is a unique strategy that the Diamond Consulting Group developed because the demand was there. We found that many folks who were selling, buying, etc. were in need of a positive solution, but did not necessarily want an outside unknown investor as a principle in the deal. What they did want were good contracts, knowledge and support. We also found that many investors needed a way to get paid for their time, knowledge and energy. 

The Creative Real Estate Consultant was born. Imagine getting paid for all those experiences you had both good and bad. We developed a complete business plan for this high profit and low overhead professional business opportunity. All you need is knowledge, a phone, the GUTS� Sales System and in 30 days you are rocking!

11) The Portfolio: (advanced strategy) This is a solid conservative long term strategy for wealth accumulation. Use all of the above strategies (1-10) to accumulate enough cash (usually 10-20% down payment) to purchase good homes and condos in upscale middle class neighborhoods. 

You need to have a pre-approved mortgage/line of credit so you can work fast to buy properties 20% or more under market. Take the home and Lease Purchase it with generous rent credit in one year contracts. If they buy, renew or move out you win.

 

Gar C. May, Real Estate Broker
1357 Hornblend Street
San Diego, Ca 92109
gmay@san.rr.com
858-272-5510

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