FAQ:

What would a typical deal look like?

I often structure deals as lease purchases as they are typically the best option for Sellers. If a Seller is willing to receive cash flow and/or mortgage payment relief for a year or so, they can often walk away with much more money from the sale of their property.

What is a lease purchase?

A lease purchase is an agreement between the seller, (the homeowner), and the buyer, (the tenant/buyer). All terms are negotiated and agreed upon in advance. The homeowner receives nonrefundable money upfront; a top of the market rent; and a top of the market selling price. Your tenant/buyer can purchase the property at any time during the lease, which is usually 12 months. During that time the tenant/buyer is responsible for all maintenance and repairs. We’re not kidding when we say,
“Just say no to tenants and toilets!”

When the option to purchase is exercised the sale happens like a typical purchase and sale agreement, with two noteworthy exceptions: there is no Realtor involved, saving the homeowner a substantial amount of money, and most agreements make the purchaser responsible for the bulk of closing costs, further saving the seller money.

Why consider a lease purchase?

Some of the many benefits include:

1) No haggling over dimes and dollars. Top of the market selling price, even in a buyer’s market.

2) No Realtor’s commissions.

3) Rental income every month.

4) The majority of the closing costs are paid by the buyer.

5) Tenant/Buyers rather than tenants. They treat the property as if it’s theirs because one day it will be.

6) Large, available market of tenant/buyers at all times.

7) No Tenants and Toilets. The majority of repairs and maintenance are the responsibility of the tenant/buyer.

8) You retain title and tax benefits until title is transferred at closing.

Who pays for this?

I get paid by Tenant/Buyers.

Why not use a realtor? Wouldn't that be easier?

Easier? Certainly. But the cost of sitting on your hands while a Realtor lists your house is an expensive luxury. Review the comparison chart above.

I need to cover my mortgage payment ASAP? How long will it take to find my Tenant/Buyer?

That’s a function of marketing and pricing. Price your house correctly, get the word out effectively, and the tenant/buyers will contact you.

How long is the lease?

You decide. Typically, it’s a 12 month lease. But the tenant/buyer can exercise their option to purchase at any time during the lease. If it suits you, a longer time frame is possible and, in many deals, preferable.

What about repairs and maintenance?

Tenant/Buyers are responsible for repairs and maintenance... You are probably thinking "Yeah right, they aren't going to care." I recommend using economic incentives in the form of rent credits or seller concessions. By pricing the house above market and offering a percentage of the monthly rent as a rent credit that will reduce the purchase price when payments are on time and the property is cared for, the Tenant/Buyers have even more skin in the game. If you look at the numbers in the example above, you will see that sellers still come out way ahead even with this incentive.

If the Tenant/Buyer doesn't complete the purchase of the house, the rent credits are yours to keep - again another way the rent credits incentivize good Tenant/Buyer behavior. The rent credits only apply to the purchase price if the Tenant/Buyer completes the purchase.

What if the Tenant/Buyer doesn't buy?

That’s a possibility. Life happens. . .divorce, job loss, illness. . .your tenant/buyers can’t get financed. If this happens, you have choices, you’re in control. Do your tenant/buyers need some additional time to close the deal? Have they paid the rent on time and maintained the property? If so, extend them a few months. . .additional rental income!

If your tenant/buyers are unable or unwilling to purchase your property we’ll be happy to assist you set up another lease purchase with new tenant/buyers. Perhaps the rental market has tightened and you can increase the rent. Or your house has appreciated and you can increase the purchase price. Again, you have choices, you’re in control.

Do you work with people who have little/no equity? Do you work with people who have little/no debt?

You bet! We can work with sellers across the spectrum from no equity to no loan.

How Does the closing process work?

It is the same as if you were selling your house in a traditional manner. At your attorney’s office or a title company. They handle all the details.

Learn More...

Give me a call to learn more, my number is at the top of this site. I help buyers who are willing to consider alternatives to the traditional home sale process. If you want a cash offer, I will be able to provide a discounted cash offer much like other investors. If you are a little flexible and willing to consider alternatives, I offer a suite of possible solutions that will allow you to get more for your home.