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Over $11,000 Profit on My First Lease Option

by Jim Mullins   

I promised JP Vaughan I would share my first deal, so here it is. I started visiting this website about three weeks ago and learned everything about doing this deal from the people on this site. I didn't have any money to buy a course, so I just lived on this site and learned all that I could.

I want to especially thank EddyFL, SandyFL, and Phil Fernandez for all their help. I would have never done this deal without them, and also every one else who answered my questions. I do intend to invest some of my profits in some real estate investing courses now.

I did this deal in exactly ten days with no money whatsoever out of my pocket (because I didn't have any). I found this house in the classifieds listed as a FSBO. From the ad, the people sounded motivated so I called them. Turns out he was transferred and needed out from under his payment, so I pitched a lease option to him.

He asked me to fax some info to him and he would call me back if interested. Last Thursday, he called and said everything looked great and asked me to come over to sign the papers.

My "rent-to-own" ad started last Sunday, and I had a lot of response but nothing concrete the first few days. To be honest, I was starting to get a little discouraged. Then, last night I received a call from some people who had been looking in this neighborhood for some time.

I showed them the house this morning, and they signed up and wrote me a check right on the seller's kitchen table. They have good credit and should be able to get their mortgage soon. They want to save some more down payment before they apply. Here is deal:

I paid $132,000. My rent: $1,000

I sold for $139,900. Rented it for $1,300 with $2,500 option consideration for twelve months. That's $300/month positive cash flow for twelve months = $3,600.

Total profit: $11,500 when all is said and done.

I know I should have held out for more down, but I needed the cash and the people have good credit. I just wanted to get my first creative real estate deal under my belt.

 
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