LEASE OPTIONS: LITTLE OR NO MONEY DOWN TECHNIQUES WENDY PATTON
Wendy’s Rule about Buying on Lease Option:
It is very important you only work with buyers that
have an opportunity to purchase your home. I
If it isn’t a Win/Win/Win for the Seller, the Investor
and Tenant/Buyer then walk away from the deal.
There are plenty of the deals out there where
everyone can win.
only accept applications from tenant/buyers I think
could qualify later for a mortgage. I can’t
determine for sure if they will, but a good
mortgage lender can give me that advice. I
recommend you work with a good mortgage
The above illustration depicts a “sandwich lease
company to make that determination.
option.” In a sandwich the meat is in the middle.
The best part of a sandwich is the meat, and you
Wendy’s Ethics Rule
(the investor) are in the middle of the transaction.
Your reward is the meat -- the difference between
Don’t commit to a lease option with potential
what you paid for the home and then what you sold
buyers who have no way of ever being able to
it for. For example: Seller Bob lease options his
qualify for a mortgage. That is being greedy and
home to Investor Wendy for $150,000 at $850 a
taking advantage of someone. It is not fair to the
month for 3 years. Investor Wendy then would
buyer. If the buyer messes up – shame on them!
lease option the home to tenant buyer Sally for
If you mess them up – shame on you!
$180,000 and $1000 a month and only give Sally 1
year to purchase the home. In this example,
Investor Wendy would have $150 a month cash
flow and $30,000 in profit on the difference in the
price of the home (what you paid and what you sold
it for). This is a simple example in lease options,
because there are so many more things that can be
When doing any lease option
deal it is one of my mottos that
everyone must win or don’t do
the deal
negotiated in a deal.
At this time my average profit is right around
$40,000 per lease option transaction. Lease
options typically turn over every 18-24 months.
Depending on what part of the country you reside
in the profit range should vary from $25,000 –
$150,000 (Midwest to Northern California). You
decide how much you need to make, and then you
will know how many homes you need to lease
option to achieve your goal. Not only can lease
options set you up to live today but they can set
you up for Future Financial Freedom (FX3) and