Lease Purchasing is truly a Win /Win Strategy in the field of creative real estate. The reason is
because it is not adversarial. There are plenty of advantages and profits for everyone. Consider how
many transactions you can profitably produce when price is not an issue. Compare the following lists
to any other methods in real estate and you will discover, just as I did, that there is no substitute
for the niche called Lease Purchasing.
Seller/Landlord Advantages - The Seller/Landlord is essentially the owner. Imagine being able to
make offers on properties listed in the rental and for sale section of your newspaper. Further, once
you understand the many strategies of Lease Purchasing you can do deals with the motivated seller,
AKA: Henny Youngman deals “Take my home, PLEASE!” the unmotivated seller, “I want full price and I
won’t take a cent less” and everyone in between. You will literally make the most profitable, hands
off and fun deals of your realestate investor career. All you need is the specialized knowledge of
the strategies, the correct contracts and of course an understanding of the advantages.
- Less Haggling Over Top Sales Price
- Larger Available Market Of Buyers To Choose From At All Times
- Better Quality Tenants (Nothing is better than a motivated Tenant/Buyer with a large cash
- Higher Rent Than Usual For Market
- Non-Refundable Up-Front Option Consideration
- Over market rents (Just give excellent value).
- Maintenance Can Be Delegated (Yea! No more squirrels nesting in the heating vent calls).
- No Management Headaches (The rent is paid on the first, late on the 2nd of the month).
- Seller Remains On Deed (No risky wrap-around deals).
- Seller Retains Tax Shelter (Naturally)
- No Long Vacancies (Just give generous rent credit and the phone rings off the hook).
- Positive Cash Flow (My daughter’s first 3 words).
- No Realtor Commissions To Pay (6-7% Savings) (Hang up the gold jacket).
- No Closing Costs (Tenant/Buyer pays for these in conventional financing).
- Safer Than Conventional Rentals (Very few ‘tenant from hell’ stories here).
- It Works!
Tenant/Buyer Advantages - Imagine negotiating and moving into the home of your dreams today and buying
it several years from now! Consider the market need for helping others who can’t get past the bank
by helping them to get started in home ownership. Yep, the advantages for the Tenant/Buyer are such
that they will beat a path to your door.
- Very Low Down Payment (1-2% vs. 10-30%)
- No Loan Qualification Necessary Up-front
- Rent Money Is Working For You (AKA: Rent Credit)
- Option Consideration Is often Credited 100%
- Price Is Usually Locked In Up-front
- Profits From Any Appreciation
- Time To Check Out The Home ( Make sure the roof really doesn’t leak)!
- Time to Check Out the Neighborhood and Neighbors (I would hate to discover that my neighbor
runs a combination pit bull training and Karate school in his garage)! Check out the movie The
Suburbs if you doubt me !!!
- Time To Obtain the Best Financing (No pressure, no rush, no bank financing up-front).
- No Taxes To Pay (Libertarians love Lease Purchasing)!
- Buys Time To Repair Credit or Develop Needed Down Payment (The luxury of time).
- Quick Move In Time (Back up the truck to the garage).
- No Lengthy Escrows or Mortgage Approvals.
- Rents are Negotiable (Heck everything is negotiable)!
- You can live in the home of your Dreams today which you can Buy Tomorrow (Good idea)!
An Investor’s Viewpoint - The Lease Purchase has everything an investor needs to make a prudent
and profitable investment in Creative Real Estate. Utilizing very small down payments of 1 - 2 %,
an investor can control several properties that normally require 20 - 30 % in down payment. For
example, on an investment property valued at $200,000.00 an investor can expect to put between
$40,000.00 to $60,000.00 down for the purchase. Through a LeasePurchase, the investor can control
as many as 10 or more properties with the same amount of money! This is Maximum Leverage at its
best! LeasePurchasing is a field where there is little competition. Let everyone else do the
foreclosures and fixer uppers. Let’s works smart and develop multiplestreams of cash flow with a
profitable concept. Best of all, everyone can win!
- Maximum Leverage - Minimum Cash Outlay (What’s better than controlling properties with a
- Profits. Almost too numerous to list here!! (Option Consideration, Positive monthly cash flow,
Cash at close or a note, Assignment fees, Property sale, Consulting fees and more).
- Very Little competition (Ask Donald Trump, he loves options).
- No Maintenance (Hang up your plunger)!
- Price Protection (You can make money if the real estate market goes up and can give the
property back to the owner if it goes down. Mucho safer than traditional investing).
- No Landlording (See the movie Pacific Heights).
- Control Without Overhead (A great home business, a 30 second commute)!
- Positive Cash Flow (There’s that word again)!
- Minimum Risk - Little money in the deal, no bank qualifying necessary.
- Peace Of Mind (I have been to the mountain top of real estate success).
- Minimal Liability (You can Wheel & Deal on properties without the usual risk).
- Appreciation (The price is locked in so you can profit in upswings).
- Assignment (Be the middleman and wholesale the deal to another. You’reout of the loop).
- Paper - Create high quality notes through your own Lease Purchase Transactions.
- Profits (Yes, its worth saying twice)!
In summary, Lease Purchasing is the best way for the beginner as well as the seasoned investor
to be involved in creative real estate. Lease Purchasing can generate high profits with minimal
risk. It is a Win/Win concept for all the principle parties concerned.
Of course if you don’t believe, me you can always buy a plunger and go back to fixers, tenants and
I wish you real estate success.
Diamond Consulting Group
Success, One Person at a Time !
Claude W. Diamond J.D.