Investing with Rent To Own...
No rehab
projects and much fewer rental headaches! But, still good profits!
We've done rehab "flips" and we've done buy to hold rentals. What we like
most, though, is purchasing homes to sell on lease option.
Some people can't buy a house yet (or don't want to). Provide a service for
people to get into houses, who might not otherwise be able to yet, AND make a
little money for your time, effort, and risk.
Learn to buy houses profitably, doubling your
portfolio of houses every year or two. Like the penny that doubles into a
zillion dollars over time, one house turns to 2 and turns to 4 to 8 to 16 to 32.
If your portfolio is only 10 houses valued at $100,000 each, and you were to get
5% appreciation per year, what would be your appreciation in dollars? $50,000
a year in appreciation alone.
I will only be able to work with the most serious and most creditworthy new investors
this year. For those who qualify, this only takes 5-10 hours per week and
I charge nothing for advice, yet. If you're interested in applying, email
me at Owner2b@yahoo.com. Specifically mention that you would like to be considered
for lease option investments.
HISTORICAL RETURNS in REAL ESTATE
I just found this article by Fidelity Research Institute, it is a great starting
place for learning real estate invements. I saw it here.
As you can see, the average annual return since 1963 has been 5.9%. Since
there is really no way to predict price gains from year to year, you can use this
as general estimate.
Combine that 5.9% with the leverage of a borrowing money to buy a house, and your
returns (and variance) can go up dramatically. If you put $10,000 down to
buy a $100,000 house and it appreciates by 5.9% or $5,900. What is your return?
$5,900/$10,000 = 59% !
Of course, if the house depreciates in a year or you have to sell at a price less
than you expected, the percentage loss would be more too. If you have to sell
at a 5.9% depreciation, you rate of return would be -$5,900/$10,000.
Read the research, though and you'll see that over the long haul, you'll most likely
get the expected average appreciation.
SANDWICH LEASE OPTIONS
This is a great way to make money, but it's a little more complicated,
and you take on quite a few more risks. We don't use this method, but some
investors do.
The idea is to ask a seller to lease you their house and give you the option to
buy the house at a good price. Then you find a sub-lessee to whom you sell
the sub-option at a higher price.
For example, I ask a seller to give me the option to buy a house at $100,000 for
a year. I find a tenant/buyer who is willing to do the same from me with the
option to buy the house at $110,000. When and if the buyer closes within a
year, you simultaneously close and pocket the $10,000 difference.
In reality it is more complicated. Further, you have to make a lot of phone
calls (or other marketing) to find sellers willing to let you sublease their house
to another stranger.
The extra risks involved here are from questions like: What if the seller
decided to sell to someone else, even though they signed with you? Now you
have a double lawsuit because your tenant/buyer is likely going to sue you.
Again, we're not attorneys so get professional advice on this.
If you are truly interested in doing this type of investing email us for a list
of sandwich lease option investor trainers and websites (we don't do sandwiches,
but we've had good experiences with trainers).
Lease Option Assignments
To be continued...
Learn more
> Email us at owner2b@yahoo.com
Or, Start Searching
> for a rent to own!