OfflineWith the markets across the US heating up, wholesalers are having to get creative to make money in this market. One way I have seen students have success is to go after lease options rather that go after the fixers with equity that every other investor is going after, and specifically going after properties that have been on the market for over 100 days that match what they have lease option buyers with >$10K down already interested in purchasing. These are less popular that the flips, but they can actually get a wholesaler paid like a buy-fix&sell investor if there is any equity in the deal because the lease option purchasers are generally interested in terms and not equity.
Put out some ghost ads in your local craigslist and if you get a lease option buyer with $10k down go out and make an easy $5k finding a desperate seller with a property that matches. You might even get a bigger chunk on the back-end if there is any equity.
Good Luck,
Dave
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If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
This does seem to be the next target area. There is a large market for home buyers that will be eligible for loans within the next few years. Lease options get them into a home leaving the financing a little down the road.
The payment to the wholesaler often comes from the lease option fee. This is paid by the tenant/buyer to secure the lease option - like a small down payment on the house.
Lease options are just 1 way of making money investing. This is a great way to make some cash, and help someone who is looking. My only suggestion would be to test your market. There are a lot of deals out there still to be had. Pay attention to the changes in the market and adjust your strategy accordingly. It would be a shame to not look at all the options before making a decision. Do your homework and choose the strategy that will be the most advantageous.
Thanks for your comments. Just thought I would add that lease options are a good way to invest because:
1. For every cash buyer with >$100K in their bank account with a habit of investing there are at least a dozen people with crummy credit after the market downturn that had to declare Bankruptcy in the past 2-4 years that will be forced to rent or do lease options, and they are very easy to advertise for....just make sure they have at least $5k to put down on the front end so you get to make money up front.
2. Lease options will pay you three times, once up front, every month, and then usually a large chunk in the end since the end buyer isn't concerned about equity as much as not paying rent.
For every Seller that is willing to take a 30% haircut after rehab costs there are hundreds that have been listed on the market without enough equity to compete with the discounted properties possibly needing some rehab and the sellers have no money to fix it that will consider a lease option if they are educated on how they work!
If you are not a bloodthirsty ruthless investor that takes pleasure in beating up the bank and negotiating the heck out of sellers, you may consider lease options because this market is prime for them.
Cheers,
Dave
__________________
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125