It’s time to reconsider this investing strategy with a fresh perspective
Finding an investing strategy that has the ability to meet all of your particular wants and needs can be difficult to find. Most investors spend a considerable amount of time looking for their niche.
Here’s a look at some traditional methods and subsequent concerns…
Some investors aren’t interested in the “buy and flip” model because if they don’t flip the property quickly and at the right price their ROI can decrease considerably. This makes the strategy difficult to control.
The “buy and hold” or owning income properties aren’t always the best option either. This investing strategy is time consuming and to be honest not everyone can be a great landlord. Let’s face it—dealing with tenant emergencies or late rent can be frustrating especially if you are reliant on the income.
So what happens if you take those two strategies and smoosh them together?
You get something like the “buy & lease option” model.
A properly implemented “buy & lease option” model takes the best of the “buy and flip” and “buy and hold” models. It also minimizes each model’s most glaring flaws.
Expert Investor Andy Heller is quick to point out the positives:
“First, most investors who use the lease/purchase model are able to “flip” some of their properties and sell others to their lease/purchase tenants. This allows the investor to generate the “cash windfalls” necessary for portfolio expansion, without the pressure of having to sell that is specific to the “buy and flip” model.”
“Second, on the landlording side, most lease/purchase agreements transfer the repairs and maintenance responsibility to the tenant, as the tenant is not a typical renter but rather a “future homeowner”. The typical lease/purchase agreement can also be signed for significantly longer terms. Both these factors save the landlord much of the time, headache, and cost associated with upkeep and turnover common with most rentals.”
Sounds like something worth considering.
But here’s where it gets a facelift, Colorado investors have great reputations with local and state governments and a strategy like this has the power to make ICOR investors even more important in our community.
People facing foreclosure want to stay in their homes and banks are willing to sell the note to investors. So imagine, if as investors, we were able to help people stay in their homes by purchasing them and then turning around and lease option-ing it back? It’s an interesting idea. One ICOR thinks is worth exploring.
The “buy & lease option” strategy helps protect the investor because it requires an upfront investment from the renter and has a payoff at the end of the ‘lease option’ terms with the final sale of the property.
Interested in learning more? Join expert Andy Heller at the May monthly meetings!
AND mark your calendar… Andy will help you hone your “buy & lease option” skills at his all-day seminar on Saturday, May 17th!
Tuesday, May 13th
Wednesday, May 14th
Denver Monthly Meeting - Lease Options, REOs, and Mineral Rights for Real Estate Investors
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Thursday, May 15th
*special date, just for May
Northern Colorado Monthly Meeting - Lease Options, REOs, and Mineral Rights for Real Estate Investors