As a real estate investing woman, you understand the unique challenges of staying relevant and using creative investing strategies to grow your real estate investing business. One current and growing trend in real estate investing is the wholesale lease options. This option offers a great way to combine effective real estate investing strategies to realize growth and profitability for your business.
Grow your business by continuing to invest in your knowledge. Learn more about topics, like wholesale lease options, to expand your real estate investing tool belt. An overall strategy of creative investment and industry knowledge growth leads to a pathway of success.
What is a Wholesale Lease Option?
Wholesaling lease options combine two effective investing strategies: wholesaling and lease option to buy. This trend in real estate investing is used as a way to close a deal without having to secure financing. These two strategies, when combined, offer an excellent solution for profitability with real estate investing without the frustration of locating financing.
Wholesale real estate investing is a strategy where the investor enters a contract with a seller to purchase a property. However, the investor doesn’t take possession of the property. Instead, the investor works to locate a buyer for the property that then takes over the contract. The process is negotiated with the seller ahead of time and a percentage of the purchase price is allocated as profit for the investor.
Lease option to buy real estate investing is a way to lease or rent a property with the option to purchase the property within a specific time period for a set price. This is a great way to invest in a property without having to immediately secure the financing required to buy the property. With a lease to buy option, the investor can make money by either using the property while they lease it or by subleasing the property and charging more than the agreed to monthly lease payment with the seller.
Wholesale lease option deals are usually an easier way to find a buyer than with a standard wholesale deal. This is because financing is not required and the risk is lower for the buyer and the investor. Also, unlike the standard lease option to buy deal, the investor isn’t responsible to managing the lease on the property. The investor merely works as a “go between” to find the buyer or renter and connect them to the seller.
With the wholesale lease option, the investor never takes possession of the property and makes money by taking a predetermined percentage of the down payment or deposit from the renter or buyer. This is a quick and easy way to make money as a real estate investor without taking on a lot of risks. A wholesale lease option is a smart strategy to add to your real estate investing business plan.
Benefits of Wholesale Lease Option Deals
Wholesale lease options are popular because they are a quick and easy way to make a profit without requiring financing from the investor. This type of real estate investing strategy offers many benefits.
- Find a buyer without having to secure financing to allow for a quicker turnaround of the deal.
- Make a profit quickly through creative investing.
- Deepen your real estate investing portfolio.
- Expand both your buyer and seller lists.
- Stay relevant and up-to-date on industry trends by employing popular investing strategies.
- Works in both hot and cold real estate markets. Regardless of market trends, this strategy is effective.
Don’t be intimidated or scared to try new real estate investing strategies. With wholesale lease options, new real estate investors can build your portfolio without a huge risk. These are also great deals to partner with another real estate investor where one person locates the buyer and the other locates the seller and then splits the profit.
How to Effectively Use the Wholesale Lease Option
As with any real estate investing strategy, the key to success is to understand the details of the process. Always work with a real estate attorney to create a solid contract for each type of real estate investing deal. You want to ensure that your interests are protected and each element of the deal is defined in the contract. With wholesaling and wholesaling lease options it is especially important to define the percentage you, as the investor, will receive for finding the buyer or renter.
With a wholesale lease option deal, start by locating a seller that is open to leasing the property with the possibility to sell. This means that you want a seller that will be satisfied whether or not the renter actually purchases the property. Keep in mind that you want to build a solid reputation and quality relationships that benefit your long-term business goals.
Once you find a seller and a property, create a contract with a lease to buy option that includes a defined time frame and purchase price for the buy option. Once you have the contract in place, work to locate a buyer that wants a lease to buy option. Do your due diligence to find a buyer that has the potential to purchase the property within at most two years.
After the buyer is located and qualified, assign the seller’s contract to the new buyer. After your fee is paid from the buyer’s deposit or down payment, the deal is completed.
Stay On-Trend with Your Investment Strategies
The best way to stay relevant with your real estate investing business is with continued education to understand the market trends and creative investing strategies. Make it part of your business plan to invest in your industry knowledge by attending workshops, investing seminars and networking events. Take the time to learn from blog articles, eBooks, webinars and videos.