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Lease Purchase Benefits
Faster Equity Growth
Equity can accumulate much faster than with conventional financing
Rent Money is Working Towards the Purchase of the Home
Each month that a tenant buyer pays rent, a portion of that payment
will be credited towards their down payment or off of the sales
price, once they are able to purchase the home.
Option Consideration Is Credited Towards the Purchase of the Home
When a tenant buyer signs a lease purchase contract, they must pay
the owner an option deposit (down payment) prior to moving in. This
money is the tenant buyer's vested interest in the home and will
be fully credited (100%) to either their down payment or off the
sales price.
Minimum Cash Out of Pocket
When a buyer purchases a home conventionally, they must pay closing
costs, prepaids and a down payment. With a lease purchase contract,
the tenant buyer pays only the first month's rent and an option
deposit (down payment) . This will save you between 25% and 85%.
Frequently No Down Payment at Closing
Since the tenant buyer has given the owner an option deposit, and
they have been receiving monthly rent credits, there will frequently
be very little additional money needed to come up with for a down
payment at closing.
Closing Costs Are Delayed
Tenant buyer closing costs will be delayed (not avoided) until they
actually close on the home, giving time to raise any additional
funds.
Sales Price Is Locked In
The sales price will be pre-determined and stated in the lease purchase
agreement.
Profits from Appreciation
Since the sales price is locked in before closing, any increase
in property value will mean that your equity is increasing in the
home.
Possible Assignment of Contract for Profit
If the owner allows the assignment of the tenant buyer's interest
in the home, they may assign it to someone for a price.
Credit Problems Will Not Hold You Back
Qualification restrictions are not as strict as conventional financing.
Tenant buyers will be assigned to an investment advisor who will
assist in the credit repair process.
Control of the Home
You will be put in legal control of the home for a specified period
without having to actually own it.
No Taxes, Less Liability
Will not have to pay property taxes so that the liability exposure
will be drastically reduced.
Maximum Leverage
A tenant buyer is spending very little money to control a very expensive
and potentially very profitable investment.
Time
Before a tenant buyer actually purchases the home, they will have
time to repair their credit, find the best financing available,
investigate the home and research the neighborhood.
Quick Move In Time
Move in time is typically less than a month compared to conventional
move in times of one to three months from the time the offer was
made.
No Lengthy Escrows or Mortgage Approvals
The decision to lease purchase will be made based on the tenant
buyer's current situation and the ability to correct the issues
at hand within 12-36 months rather than by a lender to render a
decision.
Minimal Maintenance
All homes purchased will be inspected and a home warranty purchased
to minimize potential costs to the tenant buyer.
Peace of Mind
As long as the tenant buyer lives up to their end of the bargain,
they will have full control of the home and can maintain it or improve
it as they wish (major improvements will require the permission
of the owner).
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