01 January 2008
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You are a depositor who buys and sells rental homes for profit. There are many ways to bargain the purchase of a home. Of course, you can always make a obtain offer that includes your cash down payment coupled with a new mortgage loan.
Even with low down payments little investors have enough cash to do more than one or two deals.
No, it just not practical to tie up currency in every deal of you plan on buying 8 or 10 investment properties. These days many investors find an aggravated seller who will listen to a more creative offer. The investor explains why it is in the seller's best interest to lease the home to the investor with an opportunity to buy in some set period of time. Often the term of the purchase option will be from 1 to 5 years.
At some point the investor will desire to sell a property to get to the cash income. One of the ways to sell a home for top dollar is to sell it on a lease with option to purchase. Often the investor can offer a buyer with weak credit the opportunity to buy a home when no one else will.
Because the buyer has a low credit rating the investor is entitled to a little more profit for taking the risk. This enables the investor to price the home 10% or 15% above market value and get a monthly payment 10% or 15% above normal.