Lease Options in Real Estate - Masterclass Video 7 w/ Pace Morby

Best, best, and the best. Changing thousands of lives. Wish All the best for flipping geniuses

These guys are fuckin snakes. Be careful with realtors.

This info is GOLD!! Thank you Pace and Jerry!!

- A lease option is a contract that gives the tenant the right, but not the obligation, to buy the property at a predetermined price and time frame. The tenant pays a non-refundable option fee upfront, which is usually a percentage of the purchase price. The tenant also pays a monthly rent, which may include a rent credit that goes towards the purchase price if the tenant decides to buy the property. The landlord agrees to sell the property to the tenant at the agreed price and terms, and cannot sell it to anyone else during the option period.
- The benefits of a lease option for the tenant are:
- They can lock in a purchase price and terms in advance, which can protect them from market fluctuations and inflation.
- They can control the property without owning it, which means they can make improvements, sublease it, or assign the option to someone else.
- They can buy the property with little or no money down, since the option fee and the rent credit can reduce the amount of cash needed at closing.
- They can improve their credit and income during the option period, which can help them qualify for a mortgage loan when they exercise the option.
- They can walk away from the deal without any legal consequences if they change their mind or cannot afford to buy the property, since they are not obligated to buy it.
- The benefits of a lease option for the landlord are:
- They can generate passive income from the rent and the option fee, which can cover their mortgage payments and expenses.
- They can defer capital gains taxes until they sell the property, which can save them money in the long run.
- They can avoid the hassle and cost of selling the property through a realtor, which can take time and involve commissions and fees.
- They can sell the property at a higher price than the market value, since the tenant is willing to pay a premium for the option.
- They can reduce the risk of vacancy, damage, and maintenance, since the tenant has an incentive to take care of the property and pay on time.
- The risks of a lease option for the tenant are:
- They can lose the option fee and the rent credit if they do not exercise the option, which can be a significant amount of money.
- They can be evicted or sued by the landlord if they breach the contract, such as by not paying the rent or violating the terms of the lease.
- They can be affected by changes in the property's condition, value, or ownership, such as by liens, foreclosures, or lawsuits, which can jeopardize their option.
- They can be unable to buy the property if they cannot secure financing, qualify for a loan, or afford the closing costs when the option expires.
- The risks of a lease option for the landlord are:
- They can lose the opportunity to sell the property at a higher price if the market appreciates during the option period, which can reduce their profit margin.
- They can be liable for repairs and maintenance if the tenant does not perform them, which can increase their expenses and reduce their cash flow.
- They can be sued by the tenant if they breach the contract, such as by not honoring the option or selling the property to someone else.
- They can be stuck with the property if the tenant does not exercise the option, which can limit their liquidity and flexibility.
- The steps to find motivated sellers who are willing to do a lease option are:
- Identify the target market, such as homeowners who are facing foreclosure, divorce, relocation, or financial hardship, or who have low equity, high debt, or negative cash flow.
- Generate leads, such as by using direct mail, online ads, bandit signs, referrals, or networking.
- Qualify the leads, such as by asking questions about their situation, motivation, timeline, and expectations.
- Build rapport and trust, such as by listening to their needs, showing empathy, and offering solutions.
- Present the lease option as a win-win scenario, such as by highlighting the benefits, addressing the objections, and overcoming the challenges.
- The steps to structure the deal and exit the deal are:
- Negotiate the purchase price and terms, such as by using comparable sales, market trends, and creative financing techniques.
- Draft and sign the contracts, such as the lease agreement, the option agreement, and the disclosure statement, and make sure they are legally binding and enforceable.
- Pay the option fee and the first month's rent, and move into the property or find a subtenant or an assignee.
- Exercise the option and buy the property, or sell the option and assign the contract, or walk away from the deal, before the option expires.

I hope this breakdown helps you understand how to buy a house with lease options and also the benefits of a seller selling in a lease option.

Question: what happens if youre the buyer who committed to a 5 yr lease option and decide to execute to purchase the property on year 5, but the seller is not willing to seller finance/sub2? as the buyer, did they just commit 5 years just to hear that the seller only wants cash only? To protect yourself, would you negotiate creative financing for the execution date prior to signing the lease option agreement? bc the point of this is to buy the property with good terms. I wouldn't want to end up going thru a hard money lender or bank after committing 5 year lease option

Dos flippin geniuses!

Love it guys! I've been learning so much about creative financing with Greg Pinneo and it's good to hear other people explain it too. I've been working on simple ways to explain to sellers. Love all the input thanks!

AMAZING GRACIAS GENTLEMAN

Thanks, you both are great teachers!

A flipping flipping genius. Lol

Love this series 💪

You guys are awesome thank you for all you do💪

Both of you, flipping geniuses, the most generous of men. Thank you for sharing your knowledge. You are changing and affecting thousands of lives. 👏👏👏👏

I do lease options all day. But we take care the buyers also helping them structure financing

Great video, have you ever combined a master lease and an option agreement? I feel like I could cash flow and double close at a later time?

Lease Option ...advertise that you have Rent to Own and you have line of buyers mile long...
I replay each video by Pace and Jerry...least 3 times..
And I will always find new material..
Love story Porto Rico Hotel...woow what creative finance...
Need white board or two!!
Dale

You know what...I am finally FED UP and 100% done with these property coaches...the biggest problem is these coaches expects you "AS A SIMPLE BROKER" between the owner who wants to have an exit....who most time think " why the hell am I dealing with a wholesaler who claims to assign a contract...YET treats the owner with a myriad of questions SAME AS A ESTATE AGENT"

These coaches are NOT clearly understanding that we who CAN FIND property owners who GENUINELY want to sell to a private investors

Why can't a broker albeit a single parent who can find owners happy to TALK TO A PRIVATE INVESTOR...

Why can't we be happy to SELL THAT CONTRACT to the private investor for a happy £2,000 instead of acting as a estate agent and sell the contract for £5,000+£10,000+

None of you property coaches understand that the BIGGEST thing that puts off people is saying that you are not an estate agent YET expect us to do the after repair value AS IF YOU'RE AN ESTATE AGENT???

I'm focusing on AI and marketing and building a digital centered business...not ONE so called property coach can ever answer that question, it's a horrible business to think about doing 🤷🏽‍♂️🙄😒

As a matter of fact I'd challenge these so called coaches that i follow their instructions, I'd sign a non disclosure agreement not to share the coaching, get two a lease options agreement and pay the coach ALL THE MONEY *in exchange for their extra coaching"
..why?

Because LEASE OPTIONS is NOT an accessible business for people who just want to lead opportunities to a private investor and not act as if I'm an estate agent working through an after repair value and WE have to determine if it's a HMO, SA, etc... IT'S LUDICROUS

Nice that you said I don't want to set people up to fail. People that are just wanting the option fee and NEXT are like house repo people.

Is it 6% times 5? Isn’t the 6% compounded annually?

Question: How do you structure your assignment fee? I believe you mentioned that it can be collected in the "option-fee", but how do you separate the funds being demanded of the property owner & your desired assignment price?

I love this, guys. You guys are flipping genius. 😊 👏🏾

so i can assign a lease option today and make $5000. But if I have to pay the seller an option fee, which could be as much as $7500, where is the benefit there? (is the option fee mandatory, or only if the seller asks for $) And when you say i can assign it, I assume you mean I can find a tenant/buyer for the house, correct? someone to actually live in the property and hold the option to buy at a price I have already negotiated for them.

❤❤❤❤❤

Love you both! So much fantastic info!!

Thank you. Ya’ll are awesome

It’s starting to click like I woke up and took the red pill, I could shed some tears 🥲 appreciate you guys

Again, so easily digestible, clear and concise ! Thank you! 🙏🏽

I'm very confused in the example that you gave you said that your friend just pocketed the option fee and passed the lease option over to a buy and hold investor to take on a cash flowing property. If he pocketed it how does the seller get their option fee??

Where do you find tenants who wants to do these lease options?

You can put yourself in the chain of title with an Affidavit or a memorandum and force the seller to sell.

That's your protection. Controlling property is the name of the game.

Also, seller who holds title pays Prop ta es and insurance!

Lease Option w Air B&B Combo would be Lethal. Sheeeeez

🤠🤠

Thanks guys!!!!

Pace my guy, 200 lease options in 2 years…..no way.

What is everybody’s preferred way to build their lists?

I wholesaled a lease option two weeks ago, got paid 15k

I started learned about this stuff 2 days ago and I'm already trying to get an agent to sit and negotiate a three-unit multi-family deal. I was in the process of using a VA loan but if I can use create a finance instead it's going to save a lot of headache and a lot of money and open up a lot of doors. The amount of value and how easy the stuff is to apply is just crazy.

This one was probably the most confusing of the bunch.

You both have created so much valuable information with these videos!! I'm so Greatful!!🙏🫶💕

How about contracts/documents for all of these strategies?

Awesome content !!!

Very interesting lease option tactics, thank you

This whole series content is price less, you both are the bomb 💣💯

OMG I have learned so much, thank you!

💪🏽💪🏽💪🏽💪🏽💪🏽

great series

Everybody subscribe and like, this is such incredible content

Your a flipping genius but if you try to sell with a lease option and land contract and your the buyer on those it’s a nightmare if the end buyer has a lender real magic has to happen In order for me to get them approved the transaction

Thank you for sharing!

These videos are making feel like I can do this, so much so I’m calling realtors and trying out the techniques. This maybe dangerous for me. I may stumble onto a deal without fully knowing what I’m doing. 😅