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[Note: This is Jim's second success story. See Jim's first success story: Over $11,000 Profit on My First Lease Option.]
This is a deal that many of you here on Creative Real Estate Online helped me with, so I wanted to post it as a success story. This deal actually took about two weeks to put together. It started when I called an ad for a house for rent in our local paper.
I left a message on the answering machine that said:
"I am calling about the house you have for rent. I would be interested in leasing your house on a long-term basis with an option to buy it. If this is something you would be interested in please call me at xxx-xxxx."
I got this idea from Joe Kaiser. It works great!
It turned out that this was a new home that a builder had in the paper for rent because it had been sitting for a while and would not sell. He called me and said my message really got his attention and said he had several homes he would like to talk to me about doing lease options. I met with him the next day and he showed me all the homes he had.
He liked my idea because he said when he has a house just sitting the interest payments eat all his profits. The lease option I proposed to him solved two problems for him that his Realtor® could not. He gets his payments covered on these homes until they are sold, and they get sold without having to pay a commission.
I ended up signing up on six of the homes with a commitment from him to do other homes in the future. When he builds a home, and it sits for a few months, he will call me and say, "Okay Jim, Here's another one for ya."
The nice thing about these deals is I do not start paying him rent on these homes until I have put a tenant/buyer in them, so I have nothing to lose. All these are being done with NO MONEY out of my pocket!
I am just completing this deal as of this writing so I don't have any profit figures to post yet, but here are the terms on each house. I am basically just renting these homes for his interest payment, so the rents are really reasonable.
| Price | Appraisal | My rent | Will rent for |
#1 | $307,000 | $322,000 | $2000 | $2500-$2800 |
#2 | $164,000 | $175,000 | $1,100 | $1400-$1600 |
#3 | $132,000 | $147,000 | $ 800 | $1000-$1200* |
#4 | $132,000 | $147,000 | $ 800 | $1000-$1200* |
#5 | $127,000 | $142,000 | $ 750 | $1000-$1200 |
#6 | $116,000 | $129,000 | $ 700 | $ 900-$1200 |
#7 | $115,000 | $128,000 | $ 700 | $ 900-$1,200 |
| | | | | |
Totals: | $1,093,000 | $1,190,000 | $6,850 | $8,700- $10,400 |
* two of the houses are identical (cookie-cutter houses)
I have no idea what kind of total profit I will end up making on this deal, but I am figuring somewhere between $100,000 to $150,000 with NO MONEY DOWN! I have only been investing in real estate for six weeks. It has changed my life, and I have learned that you really can buy houses with no money down.
This web site has been a godsend for me because when I started I couldn't afford to order a course, so I had to learn everything here. Thanks for everyone's help! I will keep everyone posted as I sell these homes.
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