Real Estate Lease Option Danger


Why are real estate investors having so much success offering "rent to own" homes?

Lease-options offer home ownership opportunities to folks with little cash and not so hot credit.

Oh boy, there are plenty of those around.

Both parties in a lease-option deal are counting on the buyer being able to qualify for a home loan before the option expires.

The investor wants to collect his profit when the optionee buys. The optionee wants to own the home.

During the lease period the renter/optionee must be working to improve their credit score to the point where they can qualify for a loan and buy the home.

Even though there is plenty of subprime loan money floating around at the present time... the lease-option method of acquiring a home seems to appeal to many.

In our own investing program.... Before we accept someone for a lease-option deal we have them interviewed by our friendly loan broker. He gives us thumbs up or thumbs down on whether our prospective buyers has a chance to qualify for a mortgage loan loan during the next 12 to 24 months.

It would be unetical and dishonest to enter into a lease option deal with a couple whose credit could never be cured even with a miracle drug.

We are not aware that it has happened, but we fully expect to see a lawsuit filed against some careless investor who does a lease option deal with someone whose credit is beyond redemption.

That renter/optionee has been lead to believe he can buy the home and when he finds out he can't we are sure some hungry lawyer will rush to their rescue.

We can visit that investor in jail and bring him a copy of a "no money down" book with a file hidden inside.

About The Author - Mark Walters is a real estate investor and author. His published works can be found at his web site... http://www.CashFlowInstitute.com

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