LEASE OPTION REAL ESTATE INVESTING
Have you heard about lease option real estate investing? Maybe you’ve heard it called rent-to-own. So, how do lease options work with tax-defaulted auctions, and why should you be using this strategy? Let me show you how you can make a lot of money from this.
I’m Ted Thomas, and I’ve been investing in real estate since 1970 in single family homes, condominiums, small office buildings, and large apartment projects with 100 units, 250 units and bigger.
For the last 25 years, I’ve specialized in tax lien certificates and tax defaulted property. I’ve learned that with tax defaulted property you can purchase for very low prices and then sell for under-market prices and still make generous profits.
Is lease with option to buy a good idea? Lease options turn real estate deals into spectacular money makers. I’m going to show you how to legally and ethically take advantage of this, helping yourself and other fortunate buyers.
Want to learn how to make massive profits from real estate? Would you like to buy mortgage-free homes for pennies on the dollar? Or earn double-digit interest rates? Get started today with this FREE mini class.
LEASE OPTION REAL ESTATE INVESTING WITH TAX DEFALTED PROPERTY
How does lease option work? I have many students who have learned this process. They are and their customer are creating value, and a lot of people benefit as you are about to see.
It’s not unusual for these students to collect monthly income continuously for 5 or even 10 years or more. This is going to be all about working once and then collecting checks for years.
The financial element, which is installment sales, will generate as much money, maybe even more than the massive margins which are generated with tax defaulted real estate.
THE FIRST RULE OF LEASE OPTION REAL ESTATE INVESTING
Today I’m talking about lease option real estate investing. Start by following the rules.
The process of lease options is simple. It’s easy, and it’s profitable.
However, if you plan to make any agreement with a buyer that involves real estate, it must be in written form. That’s rule number one.
Your objective is to make money and create an environment that will encourage buyers to do business with you. I’ll show you how.
LEASE OPTION REAL ESTATE INVESTING AND PROFIT MARGIN
If you intend to make money in real estate, you need to purchase that real estate at bargain prices that will allow you to add margin for profit.
Tax defaulted auctions regularly sell real estate mortgage-free with discounts of 60%, 70% and 80%. That’s perfect for you.
LEASE OPTION REAL ESTATE INVESTING – 2 INCENTIVES FOR BUYERS
Next, you must think about incentives that would appeal to buyers.
For example, retail stores are challenged in our new economy. However, customers flock in droves.
The parking lots are filled at Costco, Target and Walmart because these retailers have figured out how to buy low, add a small markup, and sell low.
Chase Bank, Wells Fargo Bank, and Bank of America have all figured out that America buys everything on payments. Installment sales are important to you.
How about that? So, we have learned that installment sales are important, and the buy low, sell low concept is important. Why? Because we want to sell and go to the bank with profits.
TAX LIENS, TAX DEEDS AND LEASE OPTION REAL ESTATE INVESTING
Now let’s talk about lease option real estate investing and how lease options work with tax defaulted property auctions. At this point, I’m just giving you foundational material.
Tax lien certificates and tax deeds are properties sold to the public for bargain prices at local auctions, both online and offline. When you know how this works, it’s a gold mine that’s available across the United States.
TAX LIEN AND TAX DEED PROPERTY AUCTIONS
There are over 5,000 auctions annually. These auctions are mandated by law in all 3000+ counties.
The state legislature has mandated that county treasurers levy and collect property taxes to raise revenue to pay county expenses and employees like police and firefighters.
If they cannot collect the property tax, they will seize the property, evict the owner, then resell the property at a public auction.
BARGAIN REAL ESTATE
These are the bargains you want. In fact, savvy educated auction buyers purchase at better than bargain prices. This is your source of new profits and products.
At these auctions, real estate is sold for 60%, 70%, and 80% of its tax assessed value.
I have a free gift for you, a 1-hour, streaming-video Master Course that will teach you the secrets of one of the safest high yielding investments available and how to generate massive cash flow and residual income streams from bargain real estate. Be sure to take advantage of it!
LEASE OPTION REAL ESTATE INVESTING – SELLING PROPERTY
Once you purchase a property at auction, there is no restriction on how you sell it. It could be sold immediately to a fixer upper person or a retail buyer.
Many entrepreneurs do not want to sell. They understand the concept of lease option real estate investing and turn the property into a cash cow.
This is much the same as purchasing at an auction, renting the property then later selling the property. Installment sales are cash cows.
LEASE OPTION REAL ESTATE INVESTING – INSTALLMENT SALE
But Ted, what about auctions? Okay, let’s review. You, the buyer, purchase for a small amount of money at a tax defaulted auction. You’re allowed to sell to anyone on any terms if the parties agree.
What is a lease option in real estate investing? It’s an installment sale that can now be called a lease much like a rental agreement, with a right to purchase, which is the option to buy.
Sophisticated buyers who worry about the future, request an option to buy, so they can lock in a purchase price at a certain date, 36 months or 60 months in the future. Financially, this is an advantage to both parties.
The property seller, that’s you, could charge a fee to purchase the option. Options generally cost the buyer more money.
LEASE OPTION REAL ESTATE INVESTING – RENT TO OWN
How does rent-to-own work? Let’s over simplify. Think about property rentals. When an outsider rents your property, you are accepting installments.
Dozens of my students learn in our training to simplify and make installment sales.
We find it easier to use a lease option contract titled, “Contract for Deed.” In other words, the buyer will receive a deed showing 100% ownership when all the payments are made.
LEASE OPTION REAL ESTATE INVESTING – CREDIT-CHALLENGED BUYERS
Here’s the biggest benefit. Ask yourself who buys these properties. I’ll give you the answer. The answer is credit-challenged clients.
Credit bureaus report that 20% to 30% of all buyers have poor credit scores. Banks and other lenders won’t touch these distressed buyers. However, and it may surprise you, many have plenty of money to pay you.
For sure, they’ll pay monthly. They need a place to live.
LEASE OPTION REAL ESTATE INVESTING – PROPERTY CONDITION
In your mind, review where you purchased the property, at a tax defaulted auction.
You are not purchasing country club properties. You are purchasing C and D properties, and every once in a while, a B property.
Many houses are livable with some just needing paint and clean up. These buyers will do that work.
LEASE OPTION REAL ESTATE INVESTING – EXAMPLE 1
Here’s an example. Ralph buys a tax defaulted property, and he immediately begins a search for a new owner.
He uses Craigslist, eBay, and an ugly sign outside the property that says, “Contract for Deed – Seller Financing”. To the world that means installment sales.
Ralph thinks about Walmart and how well buying low and selling low works for them. Wells Fargo suggests installments. The process is simple.
LEASE OPTION REAL ESTATE INVESTING – EXAMPLE 2
How do you structure a lease option deal? Here’s another example. I have dozens, so I’ll be brief.
At a tax defaulted auction, there’s a property rated as a C. It’s a 3-bed, 1-bath home with no bidders, and it’s been abandoned. It isn’t damaged; it just doesn’t look pretty. The trees are overgrown, and the grass hasn’t been cut.
Ralph purchases for an absolute bargain of $3000. However, it’s valued at $50,000 by the tax collector.
Arriving at the house, he finds it fully furnished, not damaged, with a 2-car garage, and one space has a drivable car, the other a motor boat. A handyman cuts the grass and cleans up the paint.
LEASE OPTION REAL ESTATE INVESTING – PROFIT
A local person drives by, has no money but has a good job, sees the sign, and asks for financing.
Ralph thinks to himself – lease option. Instead, he uses a Contract for Deed.
The purchase price was $3,000, and the fix up was another $7,000. So Ralph invested $10,000.
The installment is buyer willing to pay $1,000/month for 7 years or $84,000. That’s a $74,000 profit!
CONCLUSION
We hope you enjoyed Ted’s lesson, “Lease Option Real Estate Investing”
Combining the massive profit margins of tax defaulted property investing with the allurement of installment sales is a recipe for huge profits with mitigated risk.
At a tax defaulted auction, you can purchase real estate for pennies on the dollar.
At these auctions, the bidding begins around the amount of the delinquent property taxes owed, making it possible to purchase real estate for 10, 20, or 30 cents of the dollar, and you get the property without a mortgage.
Now you’ve got a mortgage-free property that you purchased at a deep discount, and the huge profit margin makes it much easier for you to sell it quickly.
How do you sell it fast? You could offer it at well below the market price. If you bought it for 20 cents on the dollar and sold it for 60 cents on the dollar, you’d still make a sizeable profit and make a quick sale.
But what if you want to make a bigger profit? You could offer a lease agreement with option to purchase.
People love installment sales, and there are a lot of buyers out there who make enough money to purchase a home but don’t have a high enough credit score to get a bank loan.
With a lease option agreement, you could profit from both the sales price and the financing, then enjoy the years of residual income streaming in!
If you’d like to learn more about tax delinquent real estate investing, there’s no one more qualified to teach you than Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property investing.
Ted Thomas is the only one who provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops & web classes, and personal one-on-one coaching.
Get started today at no cost with Ted’s FREE Master Class, that reveals the incredible opportunities available in tax defaulted real estate. The class is only about 1 hour of streaming video and contains life-changing information! You can’t afford to miss it!
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