Selling Your Lease Purchase as an Investment Property

By
Real Estate Agent with J. Roberts & Company

I recently ran accross some interesting investment opportunities for some clients. As I have said before, I am a fan of lease purchasing properties for a few different reasons.

1.   Landlord Tenant laws do not apply.

2.   The tenant signs a two year lease purchase contract rather than a typical one year lease for a renter.

3.   MOST IMPORTANTLY - A large non-refundable earnest deposit.

Here is the best part of this deal.

Because of the current mortgage market it is difficult for the average home buyer to qualify for a new loan. However, these same people may have the 10% - 20% earnest deposit required to put down on a home purchase.

Therefore, as an investment property owner, it is not uncommon to get a $10K - $20K NON-REFUNDABLE earnest deposit on a lease purchase. This allows me to offset any negative cash flow during the two year lease purchase.

Now, if I choose to sell one of my investment properties with the Tenant and Lease Purchase already in place, the new owner/investor would recieve the $10K - $20K non-refundable earnest deposit at close of escrow.

I think this is a great way to buy and sell your investment properties in this market.

 

Mat Curtner, REALTOR

J. Roberts and Company

mcurtner@msn.com

480-570-4913

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Rainer
55,016
Nicole Kraus
Signature Realty Associates - Dover, FL
Great Info Mat!  I am going to copy this for my FYI file.  Thanks!
Oct 03, 2007 11:31 AM #1
Anonymous
Mirela Monte
Thank you!  We use lease purchases more and more lately.  Great strategy re-selling the property & passing the lease to the new owner. 
Oct 03, 2007 12:09 PM #2
Rainmaker
719,177
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Mat, I wish it was this easy in California. Maybe this is a reason to come to AZ.

Bill Roberts

Oct 04, 2007 02:43 AM #3
Rainer
2,373
Mathew Curtner
J. Roberts & Company - Maricopa, AZ

Bill,

I would love to know what the difference is between AZ andCA.

Thanks,

Mat Curtner

Oct 04, 2007 03:04 AM #4
Rainmaker
719,177
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Mat, I don't know your laws, but you say that Tenant-Landlord laws do not apply. That is NOT the case in California. Many scammers have used Lease-purchase agreements to "live free" while the property owner tries to evict them for non-payment and dishonest "sellers" have kept "deposits" and evicted the tenants or made it otherwise impossible to exercise the option. All "Lease-purchase" agreements are "suspect" when it ends up in court. Not a happy situation.

I personally like the concept and wish it were easier to implement here in California.

Bill Roberts

Oct 05, 2007 02:29 AM #5
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