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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.
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