Various Aspects Of The Lease Purchase Business

In a previous article, we wrote why we believe that Lease Purchasing is the perfect home-based business, here we want to briefly touch on some of the actual aspects of operating such a business, the pluses and minuses and why Lease Purchasing represents a win-win situation for the seller, the tenant/buyer and just as importantly, you, as the business owner.

One of your goals in operating a Lease Purchase business is to contract for property that you then move to the tenant/buyer. There are a number of unique strategies that can be employed to reach this end.

You can lease purchase the property and then sub-lease to a tenant/buyer. In this strategy, you are taking on the responsibility for all payments to the seller. However, it also affords you great profit potential. You can collect money up front as option consideration, you receive the positive cash flow and you can make additional money at the end if the option is exercised. For those of you not familiar with the term positive cash flow, this is the difference between what the tenant/buyer pays you and what you pay to the original seller. This is also known as a sandwich lease purchase.

Another unique strategy is called the co-operative assignment. Here, you contract for a property and assign or sell that contract to a tenant/buyer, with the approval of the seller. In other words, the owner/seller has final approval over who goes into the home.

Another way of doing business is the straight assignment. Here, you contract for a property and assign or sell that contract to a tenant/buyer. This method does not require a seller's approval.

You can also take a pure option on a property which allows you to purchase the home at a future date with set terms. This option can then be sold to another investor.

As you can see, there are a number of unique strategies that can be employed in this business. We have touched on just some of them to give you an idea of the type of income Lease Purchasing can generate for you.

After you've gained experience in the business, you can start consulting with sellers and tenant/buyers. There are many reasons you may want to consult with a seller rather than get directly involved in the deal. The property may be to distant to work conveniently, there may not be enough money in it for you to receive what you need, or the seller may prefer to do it him or herself.

When you consult with a seller, you are providing the proper contract, a marketing plan and supporting material. We also provide a period of time for follow-up questions.

You can also consult with tenant/buyers. You may want to do this with those individuals who have limited funds available to get into a rent to own home. There are also occasions where people just prefer to do their own house hunting.

We've really just touched on the various ways to generate income with a Lease Purchase business. Lease Purchasing allows you to develop multiple income streams. By utilizing all of the income generating strategies available to you, you can build a very solid financial base for yourself.

We've covered many of the pluses of Lease Purchasing as a business, but we'd be less than honest not to point out some of the minuses.

If you're the type of individual who has poor attention to detail, this may not be for you. You need to be able to keep good records of whom you spoke to and do business with.

Also, if you're an impatient type and don't like to do "hand holding", again this may not be for you. There are many deals where you will need to be able to walk the participants through and provide constant reinforcement to them.

Although the risk level in this business is minimal, there are some risks involved. You may contract for a property and not move it for example. If you're adverse to any risk, re-think Lease Purchasing as a business for you.

In our opinion, Lease Purchasing provides a truly win-win scenario for all parties. You get to help a seller who has a problem, you provide a nice home in a nice area for the tenant/buyer that they can get into today and buy tomorrow and finally, you are generating a wonderful income for yourself. This is a business that can be operated anywhere there are free property rights.

Believe us when we say that Lease Purchasing is the best business we will ever own. It's that good!

Copyright 2000, DeFiore Enterprises

Interested in having your own successful, home based creative real estate investing business? Chuck and Sue have been helping folks start successful home based businesses for over 19 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com for the latest FREE tips and tricks, educational products and coaching in creative real estate investing and home based businesses. No time to visit the site? Subscribe to our "how to" Home Business Solutions Digest, it's like having your own personal coach: mailto:subscribeHBS@homebusinesssolutions.com

In The News:

pen paper and inkwell


cat break through


No More Estate Agent Fees

Follow a few simple guidelines, and marketing your own home... Read More

Selling by Owner Escrow or Closing Checklist

Home sellers should keep on top of their pending sale;... Read More

Is Second Home Ownership In Your Future?

According to the National Association of REALTORS® (NAR), a record... Read More

The Echo Boomers - The Next Big Consumers

The Echo Boomers or Generation Y currently make up about... Read More

Loan Officer Training: Learn How To Shape Realtors Perceptions

In medicine, a placebo is a pill that you think... Read More

Purchasing Property With No Money Down: My Personal Experience

Have you ever seen those infomercials about buying houses with... Read More

How To Spot A Good Buy

Beauty is in the eye of the beholder, particularly when... Read More

Minneapolis Warehouse Loft

Downtown Minneapolis is rich with true metropolitan charm. With the... Read More

Avoiding A Bad Investment Is Easier Than You Might Think

Human nature being what it is, none of us can... Read More

Helpful Hints for First-Time Home Buyers

Buying a house can be a daunting task, even for... Read More

10 Easy but Essential Steps for Home Selling Success

They say that the whole process of selling up, buying... Read More

Find Bucks in Yucks! 20-Year-Old Woman Turns Doghouses into Dollars!

Do you dream of making money in real estate? Do... Read More

A Beginners Guide to Flipping Houses

If you're dreaming of making money in real estate, it's... Read More

Real Estate Investing - Free Vacations While Searching for Real Estate Acquisitions

Real estate investing professionals look for all possible tax deductions... Read More

Looking into Buying Mobile Homes?

To own a home is one of the dreams every... Read More

Why Canadian Real Estate is Such Good Value

Real estate agents, Canadian citizens and foreign investors interested in... Read More

Housing Bubbles and You

Are we in a housing bubble? To answer that question... Read More

Estate Planning

Estate planning can enable you to control your property while... Read More

Real Estate Investments

Real estate investments come through a variety of different options.... Read More

Take A Shotgun Approach

An effective real estate advertising strategy entails a 'shotgun' approach.... Read More

Home Inspections or Home Warranty?

Homebuyers are a curious lot. They routinely ask thought-provoking questions.... Read More

Selling Your Home - A FSBOs Guide to Keeping It Safe

Sellers need to keep their safety in mind when prospecting... Read More

Tenants in Common (TIC)

Tenants in Common is a way of sharing ownership of... Read More

Real Estate Inspection - Do Your Own

Why should you do your own real estate inspection? To... Read More

Is Housing and Real Estate Bubble Hype Irrational Exuberance?

Not so, says the author of this article and four... Read More

Thinking About Selling Your Home?

Owning a home is the original American dream. It's the... Read More

Buying A Home ? What Is That Noise!?!

You've found the perfect home, closed escrow and just finished... Read More

Seven Questions You Should Ask When Buying a Condo Hotel Unit

You may have heard all the buzz about the newest... Read More

Home Warranties: Are They Too Good To Be True?

What is a 'Home Warranty?'A home warranty is like an... Read More

Researching Property for Real Estate Investing

Much is being said lately about investments. There are many... Read More

Quality of Life in Sussex County Delaware. Facts, Statistics, Observations and even opinions!

We Sussex Countians are fortunate in many ways as we... Read More

Finding, Fixing, Financing, and Flipping - The Short Course

Most people get involved in Real Estate investing to make... Read More

Where is Florida Investment Property

Florida Investment Property ? Why Investing is a Wise Decision... Read More