Is lease option a scam? My name is Kris Krohn, I've done thousands of real estate
deals and today I want to expose lease option for what it is. And I'm also going
to compare it to something I created called compassionate financing. In fact,
it's very similar to a lease option but it doesn't have the predatory nature
that lease option does.
Years ago, I wrote this book. It's called The Straight Path To Real Estate Wealth.
It's moved over 50,000 copies and has made many individuals millions of
dollars. And it's all about something I created called compassionate financing.
It's a version of Lease Option but unlike anyone I've seen before. To really
understand lease options whether this is a good or a bad thing.
Let me first help you understand what it is because some of you might not even
know. You're just trying to research and understand it. So, here's the quick of it.
A lease option is essentially when the owner of a property has a property and
instead of just renting it out, they're actually going to put a family in the home
that has an intention of buying it. So, technically, it's a form of what's called
seller financing. That is a broader umbrella that means I'm trying to find a
way to take this property and move it in less conventional means and
circumstances. So, I'm going to find a family and when they come into my home, I am
going to collect a down payment from them. I'm going to charge them higher rents.
And then they're going to have a period of time for them to actually buy this house.
Now, the benefit to the family that's actually leasing it is they're doing a
lease option in the first place because they probably can't qualify for with
a bank traditionally and they want to still have a place they can call home.
They don't want to rent. They want a home that can really be there as they can
settle in or they want a home that they can have as a home but if they need to
move because the job might take them somewhere in the military or whatever it
is. They need to have the flexibility that they could move. So, that is really
inherently what a lease option is. Let's talk about why it gets such a bad name.
I know people out there. When I started learning this, I was surprised that what
some people will do. Their goal is to collect the biggest downpayment they
possibly can on a person that probably will not qualify to buy the house. And
that's what you call predatory. That means they're intentionally not trying
to collect 3, 5, 7 thousand dollars. They're looking for 20,000,
50,000. I saw this one small home someone put $50,000 of hard
earned cash on it. And that was their down payment and they were given 12
months to be able to qualify. Well friend, I just want you to understand that some
people, they can't fix their credit that fast or there's a big risk if they don't
fix it in time. Because if they can't buy that house, they're going to get kicked
out. And guess what happens their 50 grand?
It's going to get forfeited. So you can do it. You can see why some people want to
expose lease option because there are some people that abuse it and they do
the wrong thing with it. Let me help you understand what compassion of financing
is. When I wrote this book. The Straight Path To Real Estate Wealth, it made an
argument for lease option but said it needs to be done different and it needs
to be changed. One of the first core things that it does is it says, instead
of collecting these wild big down payments, we're going to collect 3
thousand, 5 thousand, 7 thousand. And in some extreme cases, 10 thousand
dollars as a down payment. That's really what's more natural. That's really what's
more normal. You'll find there's more people that can come in on that scenario.
nd then we will bump the rates. But the more they put down, the lower the rates
going to be. Now, usually that's the first differences that we're going to give
them a more reasonable down payment. The second thing is contract length. As a
minimum, I give people 24 months on a contract. Now you need to understand some
people won't make their payments. You might need to get them out of a contract.
So, there's a review after even 12 months that if they haven't kept their nose
clean, that there's a way to pull them out of that contract. Sure, we're going to be
smart and protect the investor because they're providing a really valuable
service to this family. When a family goes to buy these homes, I got to tell
you. It's amazing. It's like the best feeling. So, we're going to give them a
longer base contract. We're going to ask for less of a down payment. And then the next
thing that we're going to do is that when they go to buy the home, the bank is
actually going to still require some type of down payment. We can get around that
if the investor is showing a credit. That they've actually been building a down
payment. So what I do is I say, "When you make your payments on time, we're going to
take a portion of that payment and we're gonna credit it to where it's what your
future down payment will be." And it's an incentive for them to make their
payments on time. I haven't make their payment by the 25th
because the bank says my payment's due on the first and late on the 15th. So now
everyone's in the mode of, "We're in it to win it. Here's my down payment. I'm making
my payments on time and I'm doing that because it's working towards my ability
to buy this house." The last thing is that when I'm communicating with this family,
I'm encouraging them to do whatever they need to with banks and credit to
actually be able to qualify, to be able to buy
home. That's the compassionate component. It's the one that says, "I want you to win.
I want you to buy this home." Now, predatorially, what people in lease
option will do versus compassionate financing is they want to kick a family
out and put a new family in. I actually don't, obviously. I actually want them to
buy the home because I'm going to unload a whole lot of free money that I can use
to what? Buy more. The goal isn't to hold the home forever anyway. And so I want
you to understand it is actually more profitable to treat people fairly. It is
sustainable to treat people fairly. What these... What these knuckleheads are doing
out there. They're preying upon people, that's just wrong. And you know what?
You can probably abuse anything on this planet with the wrong intention. Shift
that intention, move into something like compassion of financing and it's going to
change your entire strategy, your game and the way that you play. Now my friend,
if you do want access to the most lucrative way of doing compassionate
financing, all you have to do is actually click the link below. You're going to get a
chance to read some valuable information. See what people are experiencing and
then talk to a member of my crew. Let them break down for you exactly what it
looks like for me to be your mentor, work with you give you the contracts, give you
the training and really get you going. Last thing I want you understand is that
people have paid me a lot of money over the years to get that information. I'm at
a place in my life now where I want to help as many people as possible. You are
going to have to put some skin in the game but it's going to be this big. This is more
about empowering you to go out there and help families. Compassionate financing.
The more of you watching this that I can help get out there and supply this very
much needed option to families that are out there. I've seen it firsthand. I know
what they're looking for and I'm still doing a couple hundred deals every
single year. So I want you to know that I've set all those tools and resources
out there available to help you go out there and crush it and win. Hey, thank you
so much for watching today's video. If it was useful, give it a thumbs up. Make sure
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