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