How to Structure Creative Finance Deals | Lease Options!
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- Опубликовано: 8 июл 2024
- What is a lease option and how does it help in real estate transactions?
In the sixth part of this conventional turned creative deal, Pace Morby dives into what lease options are and why they are better options for the seller in a deal. He breaks down the typical structure of a lease option in relation to a traditional real estate transaction. Then, he lists the benefits to sellers and buyers that agreeing to lease options would provide. What is a sandwich lease option? Pace goes over what this uncommon strategy is too!
Then, Pace transitions into how he is structuring a lease option for the ongoing real estate transaction featured in this series. He explains why he is choosing to do a lease option in the scenario and what he, as the investor, is doing once the option part of the agreement goes into effect. Lease options are a great way to overcome the debt-to-income (DTI) ratio and a safe way to structure creative finance into a deal if your underwriter is giving you a hard time.
See this entire series here:
• Deal Rescue
Due On Sale Clause playlist:
• Due On Sale
What Is Subject To In Real Estate | Explained
• What Is Subject To In ...
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Chapters:
0:00 - Intro
0:19 - Lease Options
1:29 - Benefits For Sellers
3:20 - Where Is a Lease Option Beneficial?
4:39 - Sandwich Lease Options
6:51 - Why Do an Option?
8:15 - Lease Options Overcome DTI Ratio
15:27 - Outro
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❎ I am not a CPA, attorney, insurance, contractor, lender, or financial advisor. The content in these videos shall not be construed as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other and may be outdated or inaccurate; it is your responsibility to verify all information yourself. This is a RUclips video for entertainment purposes ONLY ❎
Great information! Very helpful! Thank you, Pace!
My pleasure!
love it
Hey Pace what does a seller usually require from you when you pitch him lease option to do a sandwich lease and he is inclined to do it? Im wondering if because you are offering this sort of contract, the seller doesn't check your credit , income, background check and all the other things like when doing a regular rental lease.
@ minute 13:40. Could you do a pre-sign Warranty Deed that is held in escrow until the option is exercised? This could possibly facilitated a smooth closing if something happens to the seller.
How could you pitch the lease option ? With the sub to clause
Pace Morby don't I need good credit for a lease option? I've seen lease option owners ask for good credit.
Is it the same as calling it rent to own?
Yup, same thing.
Does a lease option have better pros (for a seller) than a seller financing with the right terms? Ex:leasee maintains property and assumes liabilities
I should do a video on this!
I need a deal like this so I can have a better place to live. I’m in 900 sq ft and can’t afford to buy a house with my sole income
What market are you in? Squad up with students local to you in the free FB group paceapproves.com/freefb-ytc
I have a question. If I buy a property with sub2, what happens with the taxes of the property next year?
Same thing when you buy a house conventionally. The house is yours, and you’re responsible for payments, so you reap all the same benefits.
@@mrjuannorris_ what I meant is what happens with homestead exemption in case the seller has one on it. Once the deed is updated the homestead disappear?
Correct. Property taxes will be updated to non-homestead rates.
@@WalnutAveInvestments thanks. So next year taxes will increase significantly
Yep. Not sure what state you’re in, but in Michigan we have a property tax calculator online that lets you figure out non-homestead by county/city/school district.
A servicer being involved has NO bearing on underwriting guidelines, at all. All guidelines require that the prior owner is no longer responsible for the debt. Sub2 does not accomplish this.