Lease option, lease option bring me a treat. Today's top 10 tips, we are
continuing our series and it is to share with you how to succeed in real estate
by crushing the entire awesome lease option system. I think you're going to
find this information today especially helpful.
Alright, these next 10 tips, 21 through 30 are dedicated towards lease option.
Why? Because in 40 success strategies, 10 of them get to be on, hands down, our
absolute favorite form of real estate. Why? Because it's something that is
accessible to 16 year old's, it's something that's accessible to 90 year
old's, it's not contingent on whether you got money or credit and so we're going to
take these, this video we're going to talk about these next 10. - Awesome. So 21..
What is a lease option? Now you've probably heard the term lease option before. Maybe
you've heard it in a little bit of a different way, you've probably heard of
rent to own or even seller financing, sometimes it's all built into
that same type of thing and genre but a lease option is literally a lease with
the option to purchase. Now there's some real reasons why we love this strategy
and one of the biggest things that we love is that you get to maximize your
return, I mean, really we talked about profits already but a lease option is
one of those ways where you can off, you know, you can off table a lot of things
that you don't like about real estate and really start collecting some juicy
returns. - Alright, number 22, we're going to be talking
about down payments versus deposits. Okay, normally when you just rent out a
property you're playing landlord, guess what? You are collecting a deposit and a
deposit means what? Some day give back. Instead we like to collect a down
payment. Now on our lease option course we definitely call it something
different because we don't want to actually create some legal issues but
down payment is the best way to understand that when someone comes into
your property, instead of first and last month's rent at best with a small
deposit, you're actually collecting off in three thousand, five thousand, seven
thousand, or ten thousand dollars non-refundable and that's a high degree
of commitment which means you've got more than just a tenant in the home and
by the way, you can take that money to the bank, imagine doing a real estate
deal right now we're in the next 30 or 60 days, you're collecting five or ten
thousand dollars for a lot of us that are just starting out, that's actually
exciting now money. - That's pretty awesome. Okay, tip number 23. Now we're talking
about repairs this is one of the things that we love about lease options so much
is the repairs are on them, so typically as a landlord, this is one of
the things that people hate about landlording is you get those calls at 2 AM,
3AM, saying, "Hey my toilets broken." or "Hey, there's
water leaking." or "Hey.." whatever right? This isn't the case with a lease option, the
repairs are actually on the tenant or potential buyer. So you don't get those
calls in the middle of the night, they actually are maintaining and taking care
of the home for you. Wow I love that part about it. - Well and then let's go to
number 24 which is no realtor fees. For just a moment, you're eventually going to
sell your property and when you do, you're going to have to fork out likely
around 6%. Now by the way, 6% on the average median home in America can
be ten thousand, it can be fifteen thousand dollars, so think about that for
just a moment, you were about to make $45,000 but you're
paying out a fifteen thousand dollar realtor commission and forty five turns
into what? Thirty thousand. You just lost, after all that time of you carrying the
risk and doing the deal and all of that, you're sacrificing a third of that
profit. Now don't get me wrong, I love realtors but I don't need them when I'm
selling a lease option and all day long, I'm going to save that ten to fifteen
thousand dollars because if I'm doing a lease with an option to purchase, guess
what? When that person goes to buy that house or if it's the next person that
comes into the house that goes to buy it, guess what? I don't actually have to pay
that realtor fee anymore.- Absolutely. Tip number 25. We're talking right now about
higher cash flow. Now I think everybody wants better cash flows right?
Lease option is one of those things that can provide it for you. - You can double it.
- Yeah and there's a reason why. The reason why is that these individuals are getting
into a home that they otherwise would never be able to get into. They can't go
to a bank right now and say, "Hey will you loan me on the home?" Cause the bank is
going to say no and so you're getting into a home and they want to make this home
theirs so they're willing to pay a little bit above average market rents in order
to get that opportunity to purchase this property from you. - Well and that concern
a two hundred dollar cash flow into like three or $400 or $500, they often come
$200 to $300 more which can double a cash flow percentage and by
the way over, a five year period of time, guess that what that can do to your
overall profitability and safety margin. That's a huge increase.
Now number 26, minimum management. Now this is one of the best
parts about lease option is because heck, if you're going to own real estate, do you
really want to get regular phone calls on management, when you're a landlord
that's what you have to do or you have to pay a property manager to
do that and property manager will often cost you $100 a month up to $200 a month
plus repairs but guess what here's going down, these people are saying, this is my
house, here's my down payment, here's my contract, this is my home, I haven't
technically bought it yet but I bought it on paper and have the option to
purchase in the future which means that all repairs fall on them and that also
is going to reflect in the management. You're not getting phone calls about a
broken smoking alarm that, clock smoking alarm clock, what is it called, the alarm?
- It's called an alarm.. fire alarm. -Smoke alarm.
We're in real estate.
So smoke alarm, it's beeping, you need to come and fix it, it's like, really? Well
you don't have to take those phone calls anymore because they're going to jump in,
they're going to do that management so my favorite part about lease options is I
can go literally months at a time or sometimes years without hearing from the
person because they know this is my house, I'm responsible for it.
Alright, tip number 27. Okay 27, this is minimum purchase price. Now what most people
don't know in real estate is that you can actually set a minimum purchase
price. See, so many people go in thinking, I want to set this great huge purchase
price down the road if I'm going buy this Lease Option or this lease
with an option to purchase then I'll set that purchase price down the road at
this amazing number that just looks right to me. - And no one's got a crystal ball.
- We have no idea and so what what you want to do is actually do something that's
beneficial to them as well as beneficial to us - By the way, we brought this to the
marketplace, we innovated this and this is amazing. - Absolutely. So we want to
make sure that us as the investors, that were protected but we also want to make
sure that they're going to have a great win as well on their side. So what we do is,
we set a minimum purchase price. In other words, it has to be purchased at at least
this minimum level, that way, if the market tanks or does something weird,
we're going to be okay as the investor. If the market goes up like crazy, they're
still going to be getting their equity and things that they built in the
property but we're also gonna win. That's setting the minimum purchase price as a
wingman every time. - Okay, number 28 is going to be two contracts. In lease
option, most people do a single contract, you need two contracts, one is for the
lease and then the second one is an addendum to the contract that actually
says, this is the contract that is going to enable the purchase. A lot of the
other systems out there actually have everything group into one
and what people don't understand is that, if there was ever a legal issue, someone
could take it to a judge and a judge is going to argue that that person actually
has entitlement to the property, that their down payment should credit towards
something and so we've created a to contract system that we've been using
for over a decade that has been rockstar that we haven't changed even one time
that as many times as we've used it over and over again, we've run out of things
to improve on it and so look for two contracts, one is for the lease and then
separate out the purchase option so that it's taking place in two contracts.
- Awesome. Number 29. Kris, I'm going to do a little pantomime here, okay, you tell me
what this is. You ready? - Okay. Baseball. - No. - Babe Ruth. - No. - Swing for the
fence. - Nope, alright, you're getting there. - Foul ball. - Nope. - You're not very good at
this. - Almost, we're getting close. - You're really swinging
slow if you think about it. - Come on. - Homerun. - You got this.
- Awesome, it's home run. - It's a 40k swing! - Oh, of course, it's a
it's a $40,000. - So ca we tell them about that? - Okay so this is my favorite part,
if you're going to do a lease option versus a rental, there's on average a forty
thousand dollar gain difference so people are often completely surprised
that if you are a landlord and you rent a property,
yeah, there's cash flow, yeah, you can hold it for a while, yeah, you can make some
money on it but when you do the lease option, boom, there's a forty thousand
dollar difference part of that is the down payment they give you, the increased
cash flow, part of that is the lack of realtor fees and all of that adds up to,
this is just a whole lot better than renting. - Absolutely. Okay we're here at
our last one for this video number 30. Okay, number 30 and this is all about the
sandwich lease. Now I love the sandwich lease,
I like the Dagwood sandwich lease so we're going to do a sandwich lease, make it
a Dagwood, you know, it's a big one right? But from blondie the old cartoon.
I'm dating myself that's okay. The Dagwood sandwich is huge right?
Everything in between and that's what you're trying to do with this sandwich
lease.. You want to get into real estate that allows you to do it with no money
of your own and potentially also no credit of your own and the sandwich
lease is a perfect way to do that and what you're doing is, you're earning
money between the bread here, you''re earning money in this spread area right? So if
you set the low purchase price, we're able to negotiate an even lower
purchase price than between that set purchase price and your lower purchase
price you got spread, that's where you start to build this sandwich for
yourself right? - And it also means that you can go in and buy a property with no
money and no credit. There are homes out there right now where someone is saying,
Hey take this home off of my hands and you negotiate terms where you know what
purchase price you're buying it for, you know what a monthly obligation you're
going to have on the rent and then you turn around and actually take that same house
that you now control and give it to somebody else where they give you a
$3,000, $5,000, $7,000 or $10,000 down payment, a higher cash flow and that's what
Steven is talking about. Your sandwich in that in between and what you're doing
here is, you're controlling the asset. Sandwich leases is probably one of the
most important creative realistic techniques that you can possibly learn
that will get you out there doing real estate long before anyone says that you
should. Now this really wraps up these ten segments, we've got one more video
coming your way but I got a pause. We have so many people asking us about
lease options and how to do it. Steven and I, this is where our
experience began from the very beginning, when I hired Stephen to come across the
country from Florida and come and work with me, it was to have him come and help
me set up my real estate shop and take it to the next level. I had 25 homes at
the time and wanted to turn it into hundreds of homes, Steven, that was when
he made his market becoming an expert in this and we really formed a powerful
business partnership and this is why it's important for you.. If you are
sitting there and watching this video thinking, "Wow, some of that went over
my head." or "Oh my gosh, that sounds really amazing. Like how do I feast on that and
get in?" Here's what we're offering, you can actually do real estate with the
lease option with no money and no credit and start buying homes today. I don't
care if you're 17 years old, I don't care if you're 25 years old, I don't care if
you're 90 years old, your money and your credit situation do not have a bearing.
I want to invite you to click the link up here at the top of the video or search out
the link in the description of this video and what we're going to be doing
is, we're going to share with you a custom game plan of how will not only
teach you how to do the lease option, will not actually walk, not just walk you
through every step of it because it is going to be about 10 days of training,
about 30 minutes a day but after that, we're going to put you into our community
with all of our other big-time investors where you can get all the hands-on help,
ask questions, grow with our community, get weekly life calls with us and get what
you need to actually enact the lease option super successfully. - I'm going to tell
you one more thing, we're actually giving you a huge bonus as well which is part
of this. You're also going to get access to our entire tool kit and this tool kit is
tremendous. Not only are you going to get the training and the access to Kris and
I, we'll answer questions but you also get things like contracts and
flyers and applications and all the paperwork that you need that we've spent
tens of thousands of dollars for, we're giving that to you as well. - And some of
you Canadians are gonna be like, "Oh my gosh can you do this in Canada or can
you do this in other parts of the world?" And I'm just going to save you time from
that question right now, yes, this exists all over the world and some of the
things do need to be adapted but it's a hands up and absolute yes.