Lease Options with Realtors? How can you do them?
Question:

First, I'd like to thank you for doing the coaching webinar series, they have been very helpful so far. I got a call from a seller who has very little (if any) equity, so I was planning to do a cooperative option with them. Then I found out that the property has been listed with a Realtor for three months. The seller is interested in doing the cooperative lease option, but I'm not sure how to handle the Realtor in this situation. How have you approached this situation before or do you even attempt cooperative lease options with sellers that are already listed with a Realtor?

Answer:

I normally don't work with Realtors for cooperative lease options but I do with sandwich lease options.  It is not that you can't.  If the seller wants to work with you, then the Realtor would still get paid and so would you. It is a bit more complex so lets chat on the phone with your coaching if you want to discuss the exact details. Is there enough room in it for the commission and your profit?  If so, as long as the Realtor is cool then you can certainly do it.   I should say it is not up to the Realtor really, but they are key to getting it through the seller.
Make sense?  Feel free to comment.

Are condos good for lease options and particularly this deal from one of my students:

Question:
Hi Wendy:

I have been looking at a small studio condo (410 sq ft) in a complex right on the beach in Redondo Beach.

It is one I've been looking at for myself, temporarily as my permanent residence... then as a weekend personal hotel spot when I start making real money with your cooperative options course.

Anyway, I'm not sure how to structure a lease option, in this particular case, and I wanted your opinion if it was too far of a reach.

This little condo is way over priced, even now, in my opinion.. and that is why it is sitting on the MLS for 112 days at this price... $275,000, prince falling down from 336,500. I looked at the history and it was purchased in 2007 for 379,000 and gifted to this owner it looks like for $1000 on 6-25-09.

There is another one, model match, that just went pending... 269,000 listed after many reductions, but it was sitting for a long time as well and maybe I'll just have to see if it actually gets sold and for what... or watch it go back on market.

I wanted to find a way to structure an offer that I could pay 900 or 1000 a month on a lease option, maybe for 5-7 years (or 10 or more), with nothing much down. I don't think this owner has any debt since he bought it for 1,000... unless they refinanced to buy toys. Just a guess.

Then there is the HOA issue, that I wouldn't want to pay extra for... $225... unless I paid maybe 675 rent and 225 HOA.

Anyway, I am paying $900 RENT right now for a place about the same size up the beach, and I'd rather have an interest in a property than just pay rent.

Also, I'd like to offer much less than 275,000... because I don't think it's worth that... looking at the few comps that there are. In 2003, it was 225,000. There aren't many of these 410 square foot units, most in this stretch of Condos on the beach are larger, and much more expensive for just a few more feet, so there aren't many comps.

Maybe this is a waste of my time, but I was hoping you could advise me.

Answer:
If condos are popular there then it could be an ok deal. What is the prediction of property values in the next year in that area?
Also I like the idea of you having an interest for your own future home but without having to buy it now. Consider getting the rent of $900-1000 applied each month towards the purchase price and get a long time period. For example: after 60 months you could have $60,000 built up off of the price (therefore you might be able to give them closer to their price) Definitely follow the lease option course on Buying on Lease Options; it will have the step by step guide for you to follow.

Comments? suggestions other ideas?