Lease-Option

[clearyarchitect]

Recently Reading Robert Kiosaki`s "Real Book of Real-Estate", which i am listening to the audio version of from a website called audible.com (which is a wicked resource), I came across a chapter on the beauty of Lease-Option agreements. From what I understood lease optioning, is a process by which the buyer has the seller hold his mortgage note for an extened period of the time (say three years for example), while the buyer makes the payements and begins to build equity in the property, but requires little or no down payement. Once the potential, (and expecting) buyer builds up the adeaquate equity or down payement, he then obtains a traditional loan, and exercises his option to buy the property at a pre-determined value. There are likely areas of this type of transaction which i have not explained properly and do not yet fully understand...Lease-Optioning none the less seems like a very big opurtunity for investors. And while the book is american so I was not sure what our laws and common practices are here in Ontario redarding Lease-Option, I was inspired to read a case study in Canadian Real Estate Magazine over the weekend, which showed one couples sucessfull use of the Lease-Option method to secure multiple properties. With that I ask has anyone used this method with any sucess?

 

[markl]

There are a number of us using lease options on the boards to varying levels. I think if you did a quick search for the topic you would find a couple dozen discussions on various aspects of lease options in Canada. You might also want to search for rent to own and lease to own.

Regards,

 

[clearyarchitect]

Much thanks for the reply, goofy of me not to think to search back in the posts in the first place mow that I think of it,,,am a rookie on using the forums, will make sure I do though thank you!

 

[Luong98]

It`s a great strategy to generate more cash flow with a good payout at the beginning and the end of the option term. Word of caution, keep in mind who`s typically your target market and if you`re going to be comfortable dealing with them.