Lease Purchase
Ask the Expert ?How can LEASE PURCHASE AGREEMENTS benefit all the parties in a Real Estate Deal?
By Buyincomeproperties..com
Sep 22, 2005, 14:58

Ask the Expert ?Questions are answered weekly by Real Estate expert Donald W. Gomez Jr. of Tropical Paradise Realty in Miami, Florida (786-202-0203) Better known as Donny. He specializes in Real Estate Investment Properties. He has been writing for companies like DWGMEDIA CREATIONS for over 25 years.


READER Why do many Real Estate Investment Brokers bother with lease-purchase agreements?

DONNY Many real estate agent’s mlm leads have increased there clients and there profits by using lease-purchase agreements to help ready their potential buyers. Lease-purchase agreements are also called rent-to-owns. They ease both the seller, who may not be quite ready to sell; and the buyer, who may not be quite ready to qualify for a home mortgage.

READER So how do successful lease-purchase agreements work to add real estate leads and future mortgage leads?

DONNY The renter signs an agreement to buy property that they are now living in at a projected market price set for a future date, for instance, in two years. In addition, each month part of the monthly rent payment is escrowed toward the down payment. After two years, the buying mlm lead uses the escrowed money. Thus, the Broker’s client now becomes a leads to loan client.

An observant Realtor works their rent-to-own mlm leads wisely giving equal benefit to both the landlord/seller and their renter/buyer. For example, they must make sure that the Landlord receives fair market share for the rent now and fair future market pricing for the future sale to the renter. The money that goes to the escrow for a future mortgage loan should be about $200 or more charged monthly over and beyond that fair market rent price. For instance, if the fair market rent is $1,200 per month for a 3/2 house; then $1,400 should be collected.

READER What prudence should a Landlord and a Renter take to assure that neither incurs an accidental damage of ones property followed by a non-reimbursement of those damages?

DONNY One final caution goes out when lease-purchase agreements are being used. Being a landlord/seller/present homeowner dictates protecting your assets by verifying both home insurance and adequate property insurance. The renter/buyer, on the other hand, may find it necessary to cover their assets by obtaining renter's insurance.

READER Explain that to me one more time. How does the Investment Real Estate Broker’s increased mlm leads work? How can they be sure that the Renter will honor the agreement with a future purchase of the property and what money does the Realtor receive right away after the renter begins renting?

DONNY Immediately, the leads generation pays off, because the renter pays first, last and security to rent the house. With the average rent being $1,500 per month, that puts $1,500 instantly in the Investment Real Estate Broker’s pocket. In addition, the Broker may charge a small fee for collecting the rent/escrow payment and dividing the monies into their appropriate accounts.

DONNY Nonetheless, the Investment Real Estate Broker’s tactful and helpful services performed throughout the rental contract should incite both buyer and seller to honor their agreement. The Broker may then receive origination fees for the future mortgage loan. At any rate, they will receive a substantial commission for being the transaction broker in the final sale of the real estate4 property.



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